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- Impossible choices, & markets
by chris in Stumbling and Mumbling, 2015-03-03 14:52:57 UTC
In the day job, I point out that it is impossible for young people to save optimally for their retirement. This isn't just because of the well-known problems of weakness of will or low incomes, but also because of unavoidable uncertainties about how future tastes and working conditions will change.
This, though, is not the only big but impossible decision we expect young people to make. It is also impossible for them to make the right career choices. This isn't just because their characters and preferences are not yet fixed and so they cannot know what jobs they are best suited for. It's also [...]
- Comment la consommation réagit-elle à la déflation ?
by Martin Anota in D'un champ l'autre, 2015-03-02 21:30:23 UTC
Le taux d’inflation a été négatif dans l’ensemble de la zone euro en janvier, l’éloignant ainsi davantage de la cible poursuivie par la BCE. La déflation n’est pas simplement le symptôme d’une faiblesse de l’activité, en l’occurrence le signal d’une demande insuffisante ; elle pourrait contribuer à affaiblir davantage l’activité . La déflation contribuerait à expliquer pourquoi la Grande Dépression des années trente a été si sévère ou pourquoi l’économie nippone n’a jamais vraiment renoué avec la croissance depuis l’éclatement de ses b [...]
- Living with uncertainty: What central banks do when they don't know the natural rate
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-03-02 13:57:27 UTC
“Unfortunately, we have as yet devised no method to estimate accurately and readily the natural rate of either interest or unemployment. And the ‘natural’ rate itself will change from time to time.” Milton Friedman, American Economic Association Presidential Address, 1968. What do you do if, on a dark and foggy night, you are forced to drive on a road with a sheer cliff on one side? Unless you know precisely where the road ends and the cliff begins, you will likely go slowly and keep your foot near the brakes. Driving like a tortoise is not the “first best” solution �– fog lights [...]
- Can inequality affect growth?
by nawmsayn in ZeeConomics, 2015-03-01 18:01:52 UTC
Both theoretical and empirical research have found conflicting evidence as to what the relationship between economic growth and inequality is. There is some evidence for monotonic, linear positive or negative relationships. And then there is the much more plausible-sounding nonlinear, hump-shaped relationship.
My understanding is that more recent (empirical) evidence supports the nonlinear view. But there are still open questions such as what kind of shape the relationship takes exactly, or where exactly the turning point is.
In general, the problem with estimating a linear or higher order po [...]
- Cheques formación a parados, una buena idea
by Javier J Navarro in Elblogsalmon, 2015-03-01 15:01:30 UTC
Los cheques de formación a desempleados son una medida en la que la responsabilidad sobre la formación del desempleado recae en el mismo y la administración tiene como principal tarea la financiación y el control del uso de los fondos usados en la misma. Los cheques de formación a parados son una política económica que ha salido al debate por su inclusión en el programa económico de Ciudadanos, personalmente creo que de las medidas presentadas es la mejor ofrecida en el programa. Pero esto no viene del programa de ciudadanos, por parte del PP se han anunciado medidas similares, sin q [...]
- Quels sont les effets macroéconomiques des mesures non conventionnelles de la Fed ?
by Martin Anota in D'un champ l'autre, 2015-02-28 20:26:17 UTC
Aprè s avoir ramené le taux des fonds fédéraux à sa borne zéro fin 2008, la Réserve fédérale aux Etats-Unis a adopté deux mesures non conventionnelles afin d’assouplir davantage la politique monétaire : l’assouplissement quantitatif ( quantitative easing ) et le forward guidance . A travers ses programmes d’assouplissement quantitatif, la Fed a réalisé des achats d’actifs à grande échelle , notamment des titres publics et des titres adossés sur des prêts hypothécaires. De son côté, le forward guidance consiste pour la banque centrale à révéler le plu [...]
- Teacher Labor Supply
by Adam Ozimek in Modeled Behavior, 2015-02-28 19:27:00 UTC
I spent this morning arguing with my internet friend Freddie DeBoer about education reform, and I thought it would be useful to elevate some parts of our disagreement to a blog post. His argument is: education reformers want to make teaching a worse job, soÂ then how are we going to get more teachers? He argues we already face teacher shortages, and also don’t we care at all about teacher quality? Let me start by giving Freddie some credit where I can. He’s right that the labor supply impacts of education reform aren’t thought about enough by many education reformers. This is something I’ve wr [...]
- What failure of macroeconomics?
by chris in Stumbling and Mumbling, 2015-02-28 13:04:20 UTC
I'm in two minds about Frances' critique of macroeconomics. A bit of me disagrees, but a bit thinks she might be understating the problem.
First, a disagreement. In one respect, the 2008 crisis actually strengthened economics. The investor who followed the sell in May rule , or who used foreign buying of US equities as a sell signal , would have been out of equities before the crash of 2008. In this sense, the financial crisis actually vindicated the claim that economists can fulfill the useful function of warning of trouble ahead.
Of course, these two guides told us nothing about the causes [...]
- Labor Market Reform and the Cost of Business Cycles
by Christian Zimmermann in NEP-DGE blog, 2015-02-28 00:48:26 UTC
By Tom Krebs and Martin Scheffel
This paper studies the effect of labor market reform on the welfare cost of business cycles. Motivated by the German labor market reforms of 2003-2005, the so-called Hartz reforms, the paper focuses on two labor market institutions: the unemployment insurance system determining search incentives and the system of job placement services affecting matching efficiency. The paper develops a tractable search model with idiosyncratic labor market risk and risk-averse workers, and derives a closed-form solution for [...]
- Handy Book of Economic Growth
by dvollrath in The Growth Economics Blog, 2015-02-27 21:13:14 UTC
I thought it would be nice to post some overview articles of significant research in economic growth.
Culture, Entrepreneurship, and Growth . Doepke and Zilibotti
Trust, Growth, and Well-Being , Algann and Cahuc
Long-term Barriers to Economic Development , Spolaore and Wacziarg
Family Ties , Alesina and Giuliano
The Industrial Revolution , Clark
Twentieth-Century Growth , Crafts and O’Rourke
Historical Development , Nunn
Institutions and Economic Growth in Historical Perspective , Ogilvie and Carus
What Do We Learn from Schumpeterian Growth Theory? Aghion, Akcigit, and Howitt
Technology Diff [...]
- Friday Growth Links
by dvollrath in The Growth Economics Blog, 2015-02-27 18:20:25 UTC
Things that I pretend I will have smart things to say about in the future:
Lemin Wu on whether we are thinking about Malthusianism correctly. A general point from this paper is that once you stop thinking of output as a single homogenous good, how you choose to weight different goods in your GDP/real wage/utility calculation matters a lot for your conclusions.
David Autor will take your job . Or something like that. I lost the thread of this article when I came upon this sentence: “Mr. Autorâwho always sports a single gecko-shaped silver earring, his trademark symbol also pasted on his iPho [...]
- The "cost" bias
by chris in Stumbling and Mumbling, 2015-02-27 14:04:22 UTC
Simon's claim that fiscal austerity has been a disaster reminds me of a big bias in the media - the misuse of the word "cost".
Very often, when the press use the word "cost" to describe a policy, what they really mean is a transfer. For example, the BBC says that "offering four weeks paid paternity leave will cost £150m a year". No, it won't. This is a benefit for working fathers but a cost to their employers. This is a transfer, not a cost. Similarly, the Guardian writes : "A cut in the cap on tuition fees would cost just under £2bn." It might cost universities that, but it'll benefit futur [...]
- Please review the ethics of human ethics review
by Eric Crampton in Offsetting Behaviour, 2015-02-26 21:51:00 UTC
Human ethics review panels are the worst. Designed to prevent atrocities like Tuskegee, they then metastasised: any time your research could possibly involve a human subject, there are a billion forms to fill in. So it's usually easiest just to avoid doing field research. U Queensland's Paul Frijters didn't avoid doing field research. He sent actors out onto Brisbane buses with not quite enough money on their fare cards to see whether drivers were more likely to give white passengers a pass. Adam Creighton and Julie Hare write in The Australian on what happened next . Following national media [...]
- Pourquoi les cours du pétrole ont-ils récemment chuté ?
by Martin Anota in D'un champ l'autre, 2015-02-26 15:19:04 UTC
Après avoir connu une période de stabilité (autour de 110 dollars), le cours du pétrole a récemment connu l’une des plus fortes chutes de son histoire. Après avoir été stable pendant plus de trois ans (en fluctuant autour de 110 dollars), le prix du baril de pétrole brut Brent a chuté de 49 dollars, soit de 44 %, entre juin et décembre 2014. Sa chute s’est poursuivie au mois de janvier, avant qu’il ne se stabilise à 50 dollars et ne remonte légèrement pour atteindre aujourd’hui aux alentours de 60 dollars.
GRAPHIQUE Cours du baril du pétrole brut Brent (en dollars)
- Why Miliband is right
by chris in Stumbling and Mumbling, 2015-02-26 13:43:17 UTC
Ed Miliband is right . MPs should be banned from having paid directorships and consultancies. However, I don't say this for the conventional reasons.
It's not because such jobs distract MPs from their duties to voters and the country. The way to stop an MP doing a lousy job isn't to stop him doing other jobs but to ensure that he gets either deselected or voted out. In this context, stronger powers of recall would be better than a ban on outside work.
Nor is it because such directorships will lead to MPs' votes being swayed by specific commercial interests. As Simon says , the solution to th [...]
- Can helicopter money be democratic?
by Mainly Macro in Mainly Macro, 2015-02-26 10:07:00 UTC
Helicopter money started as an abstract thought experiment: money would be created and just distributed to individuals by helicopter. If we think of a consolidated government which includes its central bank, then it is clear that in technical terms this is a combination of monetary policy (the creation of money) and fiscal policy (the government giving individuals money). Economists call such combinations a money financed fiscal stimulus. With the advent of Quantitative Easing (QE), it has also been called QE for the people. Some have tried to suggest that central banks could undertake helicop [...]
- Modeling Labor Markets in Macroeconomics: Search and Matching
by Christian Zimmermann in NEP-DGE blog, 2015-02-25 17:31:44 UTC
By Michael Krause and Thomas Lubik
We present and discuss the simple search and matching model of the labor market against the background of developments in modern macroeconomics. We derive a simple representation of the model in a general equilibrium context and how the model can be used to analyze various policy issues in labor markets and monetary policy.
A very nice introduction to the topic, good for anyone who wants to learn about the topic, read up one some of its major developments, or assign it to students. [...]
- The relative income problem
by chris in Stumbling and Mumbling, 2015-02-25 13:49:17 UTC
I probably shouldn't say so in these censorious times, but I have a little sympathy for Sir Malcolm Rifkind's desire "to have the standard of living that my professional background would normally entitle me to have."
Of course, an MP's salary of £67,060pa is high from most perspectives; it's more than 94% of us earn. But put yourself in his shoes . He's surrounded by senior journalists, lobbyists, businessmen and lawyers many of whom get six-figure salaries, sometimes on the basis of less than astonishing ability. Mightn't an experienced MP feel underpaid relative to them?
In making such comp [...]
- Comment ont évolué les taux de chômage des régions européennes ?
by Martin Anota in D'un champ l'autre, 2015-02-24 21:40:28 UTC
Avec la crise financière mondiale, puis la crise de la zone euro, le taux de chômage de l'ensemble de la zone euro est passé de 7,5 % à 11,9 % entre 2007 et 2013. Il y a eu toutefois une forte hétérogénéité entre les pays : en 2013, le taux de chômage fut proche de 5 % en Allemagne, tandis qu’il était supérieur à 25 % en Grèce et en Espagne. Alors que la création de l’Union européenne et surtout de la zone euro visait une convergence de leurs pays-membres, ces derniers n’ont pas basculé dans la Grande Récession avec les mêmes taux de chômage et les récentes turbulences économ [...]
- Stagnation & intergenerational justice
by chris in Stumbling and Mumbling, 2015-02-24 14:38:02 UTC
The juxtaposition of David Cameron's claim that we have a "fundamental duty" to care for pensioners with the FT's story that 20-somethings have low incomes after housing costs reminds us that intergenerational justice is now a big issue.
But I wonder: is this partly a product of secular stagnation?
To see my point, consider a reasonably typical exchange between a youngster and oldster:
Oldie: You guys are lucky. You have smartphones, tinder, spotify and free books and music - and less sexism, racism and homophobia than in my day. Youngster: But I can't afford anywhere to live.
The oldster is [...]
- El machismo político se cura… ¡teniendo hijas!
by Luis Abenza in Politikon, 2015-02-24 09:00:11 UTC
Â¿CÃ³mo llegan los hombres a sensibilizarse respecto a los problemas de gÃ©nero? Â¿Es posible que su entorno social los haga mÃ¡s receptivos al feminismo? En este artÃculo revisaremos una literatura acadÃ©mica que ha encontrado que esto, en efecto, es asÃ y, en particular, tener hijas afecta al comportamiento y opiniones polÃticas de los hombres.
Para las mujeres, el mecanismo de concienciaciÃ³n respecto a la importancia de la igualdad de gÃ©nero (usarÃ© “feminista” como adjetivo para referirme a esta condiciÃ³n a partir de ahora) es obvio. La experiencia de ser discriminadas o estereotipad [...]
- Micro Apartments in NYC
by Matthew Kahn in Environmental and Urban Economics, 2015-02-22 20:28:00 UTC
I learned a piece of algebra recently. �Did you know that rent per month = ($/sqft)*sqft? � � Where "sqft" = square feet of the apartment and $/sqft = price per square foot. �In major coastal cities, �price per square foot continues to rise. � This is caused by both supply and demand forces. �One way to continue to have affordable housing units in desirable cities is to allow developers the ability to supply micro-apartments. � This article talks about the demand for 400 square foot apartments. � I recognize that this would be a tight fit for families with kids but increasing the menu of housi [...]
- How Will NYC Adapt to Sea Level Rise?
by Matthew Kahn in Environmental and Urban Economics, 2015-02-21 15:14:00 UTC
Citylab reports s ome great stuff in this blog post. � Such information plays the same role as Paul Revere did a long time ago. �Now that we know that coastal Manhattan has a problem, the efficient markets hypothesis makes some testable predictions about how asset prices will adjust. Investors will see these price signals and adjust their investment patterns. You do not need to be Einstein to predict that Manhattan's future Don Trumps will have strong incentives to identify "higher ground" on the island and to seek zoning law changes to allow them to build high rises there. �This is capitalist [...]
- Social comparisons, health and well-being
by maximorossi in NEP-LTV blog, 2015-02-20 16:56:28 UTC
By: Andrew E. Clark
Health and well-being are socially determined. One of the ways in which this comes about is via social comparisons with other individuals in the same personal, geographic or social networks, with the comparisons referring either to income or other aspects of economic and social life. The existence of such comparison effects with respect to income may help to explain the social gradient in health.
Keywords: well-being; comparisons; income; unemployment; divorce; religion; social health gradient
JEL: N0 [...]
- Vertical transmission of overweight: evidence from English adoptees
by maximorossi in NEP-LTV blog, 2015-02-20 16:54:58 UTC
By: Joan Costa-Font
Julian Le Grand
We examine the vertical transmission of overweight drawing upon a sample of English children, both adopted and non-adopted, and their families. Our results suggest strong evidence of an intergenerational association of overweight among adoptees, indicating transmission through cultural factors. We find that, when both adoptive parents are overweight, the likelihood of an adopted child being overweight is between 10% and 20% higher than when they are not. We also find that the cultura [...]
- Money, well-being and loss aversion: does an income loss have a greater effect on well-being than an equivalent income gain?
by maximorossi in NEP-LTV blog, 2015-02-20 16:53:34 UTC
By: James Banks
Gordon D.A. Brown
Christopher J. Boyce
Alex M. Wood
Andrew E. Clark
Higher income is associated with greater well-being, but do income gains and losses impact on well-being differently? Loss aversion, whereby losses loom larger than gains, is typically examined with relation to decisions about anticipated outcomes. Here, using subjective well-being data from Germany (N = 28,723) and the UK (N = 20,570), we find that experienced falls in income have a larger impact on well-being than equivalent income gains. The effect is [...]
- The effect of extended unemployment insurance benefits: evidence from the 2012-2013 phase-out
by maximorossi in NEP-LTV blog, 2015-02-20 16:51:15 UTC
By: Farber, Henry S. (Princeton University)
Rothstein, Jesse (UC Berkeley)
Valletta, Robert G. (Federal Reserve Bank of San Francisco)
Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients. The extensions were rolled back and eventually terminated by the end of 2013. Using matched CPS data from 2008-2014, we estimate the effect of extended benefits on unemployment exits separately during the earlier period of benefit expansion and the later period of rollback. In [...]
- Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling?
by maximorossi in NEP-LTV blog, 2015-02-20 16:48:42 UTC
By: Jeffrey G. Williamson
Most analysts of the modern Latin American economy have held the pessimistic belief in historical persistence — they believe that Latin America has always had very high levels of inequality, and that itâs the Iberian colonistsâ fault. Thus, modern analysts see today a more unequal Latin America compared with Asia and most rich post-industrial nations and assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this [...]
- Exploitation in the lab
by chris in Stumbling and Mumbling, 2015-02-20 14:39:21 UTC
Experimental evidence suggests that Marx was right.
In Capital, Marx describes the selling of labour power thus :
He, who before was the money-owner, now strides in front as capitalist; the possessor of labour-power follows as his labourer. The one with an air of importance, smirking, intent on business; the other, timid and holding back, like one who is bringing his own hide to market and has nothing to expect but — a hiding.
And here's a recent paper by Nikos Nikiforakis, Jorg Oechssler and Anwar Shah:
We have designed a game in which exploitation can result from the hierarchical relati [...]
- Comment s'est comportée la courbe de Beveridge en zone euro ?
by Martin Anota in D'un champ l'autre, 2015-02-20 13:29:55 UTC
La courbe de Beveridge est utilisée pour décrire, d’une part, l’état conjoncturel du marché du travail et, d’autre part, l’efficacité du marché du travail en termes d’appariement entre les travailleurs et les emplois. Elle trace une relation négative entre les taux de chômage et les taux d’emplois vacants au cours du cycle d’affaires. Lors des expansions, le taux de chômage est faible et le taux d’emplois vacants est élevé ; lors d’une récession, le taux de chômage est élevé et le taux d’emplois vacants est faible. Ainsi, en général, plus une économie s’éloigne du plein emploi, pl [...]
- Sobre impuestos negativos y complementos salariales
by Roger Senserrich in Politikon, 2015-02-20 06:05:12 UTC
Las propuestas econÃ³micas de Ciudadanos ha provocado cierto revuelo estos dÃas. Que un partido polÃtico presente un programa econÃ³mico no es del todo inusual, pero la charla de Garicano y Conthe no fue una presentaciÃ³n a la que estamos habituados en EspaÃ±a: se hablaron de medidasÂ concretas , con objetivos claros y una filosofÃa explÃcita, muy lejos del habitual refrito de conceptos abstractos e ideas etÃ©reas (“empleo de calidad” “solidaridad” “derecho a tener derechos”) que acostumbran a plagar los programas de los partidos espaÃ±oles. Es imposible evaluar siÂ las conclusiones de la [...]
- These are Not the (Modeling Assumptions About) Droids You are Looking For
by dvollrath in The Growth Economics Blog, 2015-02-19 23:37:03 UTC
Let me start by saying that all future arguments about robots should use the word “droids” instead so that we can use more Star Wars references.
Benzell, Kotlikoff, LaGarda, and Sachs (BKLS) have a new NBER working paper out on robots (sorry, I don’t see an ungated version). They are attempting to do what needs to be done: provide a baseline model of economic growth that explicitly accounts for the ability of software in the form of robots to replace human workers. With such a baseline model we could then see under what conditions we get what they call “immiserating growth” where we are actua [...]
- Heritability & the left
by chris in Stumbling and Mumbling, 2015-02-19 14:31:40 UTC
Jonah Goldberg asks :
Why does the Left get to pick which issues are the benchmarks for “science”? Why can’t the measure of being pro-science be the question of heritability of intelligence?
I don't know much force this question has: maybe some lefties do reject the heritability of IQ on ideological grounds. I want to make another point - that there's no need for them to do so. You can accept that IQ (or ability generally) is heritable and still be a strong egalitarian.
I say this because of a simple principle: luck egalitarianism . This says that inequalities are unjust if they are du [...]
- “Identifying Technology Spillovers and Product Market Rivalry,” N. Bloom, M. Schankerman & J. Van Reenen (2013)
by afinetheorem in A Fine Theorem, 2015-02-18 21:04:01 UTC
How do the social returns to R&D differ from the private returns? We must believe there is a positive gap between the two given the widespread policies of subsidizing R&D investment. The problem is measuring the gap: theory gives us a number of reasons why firms may do more R&D than the social optimum. Most intuitively, a lot of R&D contains “business stealing” effects, where some of the profit you earn from your new computer chip comes from taking sales away from me, even if you chip is only slightly better than mine. Business stealing must be weighed against the fact that some of the ben [...]
- Improvements in Quality of Life While You Are Hospitalized
by Matthew Kahn in Environmental and Urban Economics, 2015-02-18 14:11:00 UTC
The NY Times reports that Harvard and Yale Hospitals have figured out that hospitalized people enjoy sleeping through the night rather than being woken up every couple of hours to be poked and probed! � �While it is amazing that it took these great hospitals 100 years to figure this out, note that competition played a key role here in fostering this learning. A major theme in my life's work is the importance of non-market "quality of life" factors in our overall standard of living. �Yes, income is not a sufficient statistic for your well being but how do you go beyond the "Great Man" studies o [...]
- Worker flows, & occupations
by chris in Stumbling and Mumbling, 2015-02-18 13:29:19 UTC
Today's labour market figures didn't just tell us about aggregate employment and wages. They also contain some less-noticed but also important data.
First, there are labour market flows - the numbers moving between employment, unemployment and inactivity. These show that:
- 338,000 people moved from employment to unemployment in Q4. This implies that 1.1% of those in work lost their jobs and didn't get another; this of course understates job insecurity to the extent that many who lose a job find another in the same calendar quarter, and because...
- 524,000 moved from employment to inactiv [...]
- El 3+2: separando financiación y efectos
by Octavio Medina in Politikon, 2015-02-18 09:00:05 UTC
Esta mañana Thiago me pasaba una entrevista en El País a uno de los padres del Espacio Europeo de Educación Superior, Guy Haug. La entrevista en sí es interesante, pero me sorprendió una de las respuestas. Ante la pregunta de si eran mejor las carreras largas o cortas, Haug respondió que “lo importante no es lo que dura el título, sino lo que han aprendido”, y que por lo tanto la polémica en torno al 3+2 era en realidad desviarse de los temas relevantes. Aunque simpatizo mucho con la idea de que en el debate educativo en España a menudo no se priorizan los temas clave (y uno de [...]
- Who knew? People oppose austerity -- because the lump of labour fallacy!
by Sandwichman in EconoSpeak, 2015-02-17 17:00:00 UTC
ht "The basic story put forward to justify austerity is that a reduction in debt will generate an economic turnaround, but why have people rejected this narrative? Some economists would say that people have rejected it simply because it is wrong, but the problem is more protracted than this." -- Achim Kemmerling Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics .Yes, a disclaimer is probably a good idea. Especially when you are publishing nonsense that has been thoroughly discredited. In shor [...]
- Leggende metropolitane bipartisan: i nostri risparmi verranno spazzati via!
by Alberto Bagnai in Goofynomics, 2015-02-17 11:27:00 UTC
Si dice che il paese che ha bisogno di eroi sia infelice. Il paese nel quale gli estremi si toccano (e perdono la vista) è ridicolo. Suscita sospetto, come già vi ho fatto notare, che economisti del calibro di un Boldrin e di un Realfonzo , partendo da prospettive ideologiche e metodologiche così distanti, siano entrambi preoccupati per la sorte dei salari reali. Il sospetto si tramuta in certezza quando si vadano a vedere i dati (quelli corretti, però, non quelli scelti ad hoc per far tornare i propri conti, come vi spiegherò in un post successivo): il problema sostanzialmente non sussis [...]
- Why Don't Economists Go to Hollywood Parties?
by pgduarte in History of Economics Playground, 2015-02-16 20:34:27 UTC
� �Featuring in the cinemas around the world, The Imitation Game offers us a romantic (and dramatic) view of Alan Turing's involvement with the World War II effort. A leading British mathematician, logician and a pioneering computer scientist, Turing was hired by the British government in 1939 (at the Government Code and Cypher School, GC&CS) to eventually lead a group of scientists involved in breaking the code of the German cipher system, which was a critical development in the defeat of the Nazis by the Allies. Turing's homosexuality is a theme that the directo [...]
- Comment expliquer la faiblesse de la reprise ?
by Martin Anota in D'un champ l'autre, 2015-02-16 20:16:01 UTC
Six ans après la crise financière, les pays avancés connaissent toujours une faible croissance, mais les économistes ne s’accordent pas sur les raisons de cette faiblesse. Les explications possibles ne manquent pas. Carmen Reinhart et Kenneth Rogoff (2009a, 2009b) ont à plusieurs reprises affirmé que, par le passé, les récessions ont été plus sévères et les reprises plus lentes lorsque les récessions ont été synchrones à une crise financière de dimension systémique ; par conséquent, la lenteur de l’actuelle reprise n’est pas anormale. Certains suggèrent que la croissance ne pourr [...]
- The Congressional Reserve Board: A Really Bad Idea
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-02-16 13:04:03 UTC
“We are – I’ll be blunt – audited out the wazoo. Every Federal Reserve Bank has a private auditor. We have our auditor of the system. We have our own inspector general. We are audited. What he’s talking about is politicizing monetary policy.” Richard Fisher, President, Federal Reserve Bank of Dallas, Dallas Morning News , February 9, 2015. What would you think if you were to open your morning newspaper to find the following headline? “Congress Closes Down Fed, Takes Over Monetary Policy” If you’re like us, you’d panic. In short order, you’d think that long-term inflation [...]
- Novelty-seeking traits and development
by nawmsayn in ZeeConomics, 2015-02-15 14:49:49 UTC
When we compare the economic performance of former colonies with high European populations (e.g. Australia) to those without one (e.g. most African and Latin American countries), we can see that the former are generally more successful . One reason behind this is that Europeans already knew how to make an economy successful when they settled down in those colonies. They then transferred this knowledge to their offspring. Such an intergenerational transmission of traits that are favorable to development was missing in colonies with few Europeans.
One question that may arise is what kind of know [...]
- Origins of bad policy
by chris in Stumbling and Mumbling, 2015-02-14 12:55:06 UTC
In his excellent piece in the LRB, Simon points to the "ludicrous situation" in which the Labour party "now wants to portray itself as being just as tough on the deficit as the coalition*." Why this is?
Let's start from a different place, by considering another profession which has consistently disappointed its customers - the financial services sector. There's evidence from around the world that financial advice is worse (pdf) than useless and that fund managers (pdf) under-perform index trackers. Why is this? A new paper (pdf) by Robert Vishy, Adrei Schleifer and Nicola Gennaioli provides on [...]
- Retour sur la désindustrialisation prématurée
by Martin Anota in D'un champ l'autre, 2015-02-14 11:16:43 UTC
Comme le rappelle Dani Rodrik (2015a), le monde est en quelque sorte le produit de l’industrialisation. En effet, c’est la Révolution industrielle qui a été à l’origine, au dix-neuvième siècle, de la Grande Divergence des niveaux de vie entre, d’un côté, les pays européens et les Etats-Unis et, de l’autre, le reste du monde, en permettant aux premiers de connaître enfin une croissance soutenue de la productivité. Plus récemment, au vingtième siècle, l’industrialisation permit également à certains pays comme le Japon ou encore plus tard la Corée du Sud et Taïwan, de décoller et d [...]
- State Debt – When we ‘Owe it to Ourselves’ and when we dont
by andrew lainton in Decisions, Decisions, Decisions, 2015-02-14 10:24:00 UTC
Big blogosphere debate on this in the last couple of weeks – reigniting a complex debate which Nick Rowe thought he had won several years ago. The issue is whether – in Abe Lerner’s phrase, state debt, government debt is a case of ‘ we owe it to ourselves’ . Â Abe Lerner was making a subtle financial point which he did not make entirely clear and has been subject to endless debate. Â On one side are those that argue that net everything cancels – so that current expenditure is always paid for out of current income- for example Antonio Fatas , Cameron Murray and Paul Krugman . Â Others, led by N [...]
- Inflation is dead: It’s below 1 percent in the U.S., U.K., Europe, China, and Japan
by Matt O'Brien in Wonkblog, 2015-02-13 12:30:49 UTC
Source: Federal Reserve, National Bureau of Statistics of China, Statistics Bureau of Japan R.I.P., inflation. You had a good run, but it's over now that prices are rising less than 1 percent in the United States, United Kingdom, Europe, China, and Japan. Now this isn't the first time that inflation has died. The Black Death killed it, along with a third of Europe's population, for most of the 1400s . Then it came back, but disappeared again every time there was a big financial crisis: in the 1830s, the 1870s to 1890s, the 1930s, and 2009. This last time, though, was different—well, at least [...]
- La démographie influence-t-elle l’inflation et la politique monétaire ?
by Martin Anota in D'un champ l'autre, 2015-02-11 22:16:06 UTC
Durant les années soixante-dix et au début des années quatre-vingt, les pays avancés faisaient face à une forte inflation ; selon l’interprétation dominante, celle-ci s’expliquerait notamment par les erreurs commises par les banquiers centrales. Les autorités monétaires ont alors fait de la lutte contre l’inflation leur objectif premier et ils ont embrassé l’indépendance pour gagner en crédibilité et accroître ainsi l’efficacité de leur politique monétaire. Les pays avancés connaissent depuis les années quatre-vingt une désinflation, au point de connaître aujourd’hui une infl [...]
- Kingston University London Discussion Paper 2015.1: ‘THE GREEK SAGA: COMPETING EXPLANATIONS OF THE GREEK CRISIS’
by Stavros Mavroudeas in Stavros Mavroudeas blog, 2015-02-11 19:33:21 UTC
A paper of mine has just been published in the Kingston University London Economics Discussion Paper Series.
It is titled ‘ THE GREEK SAGA: COMPETING EXPLANATIONS OF THE GREEK CRISIS ‘.
Its abstract is the following:
This paper reviews the alternative explanations offered to explain the Greek crisis and checks there analytical and empirical validity. The first part focuses on the mainstream explanations. It distinguishes three main versions (‘Greek disease’, EMU is an unrectifiable non-OCA, EMU has problems but can be rectified). Mainstream explanations are criticized for failing to comprehen [...]
- Created by history
by chris in Stumbling and Mumbling, 2015-02-11 17:05:10 UTC
Inequality is bad for economies in the very long-run. Here's a new paper :
In countries with higher levels of inequality in the 1700s and 1800s, businesses today are more likely to die young and create fewer jobs.
This could be because inequality means more people are credit-constrained and so cannot set up their own businesses, which in turn generates anti-entrepreneurial attitudes which are transmitted down the generations.
I don't say this to provide another reason to worry about today's inequality; it would be odd to reduce inequality now on the grounds that doing so will benefit people [...]
- An Economic Analysis of Two Quotes from Progressive Intellectuals
by Matthew Kahn in Environmental and Urban Economics, 2015-02-11 15:47:00 UTC
I'm an economist with a passing interest in persuasion. � So, I read the NY Times Opinion page to try to learn some new ideas and to learn about how the NY Times tries to persuade the select set of people who read its weighty stuff. �My own interest in persuasion mainly focuses on how "climate hawks" attempt to nudge people to embrace low carbon living and to support low carbon policies. �Despite their well meant efforts, the population continues to vote on low carbon legislation based on a narrower concept of self interest. See my paper #1 and paper #2.� Below, I report some direct quotes fro [...]
- 'The Long-Term Impact of Inequality on Entrepreneurship and Job Creation'
by Mark Thoma in Economist's View, 2015-02-11 11:21:00 UTC
Via Chris Dillow, a new paper on inequality and economic growth:
The Long-Term Impact of Inequality on Entrepreneurship and Job Creation, by Roxana Gutiérrez-Romero and Luciana Méndez-Errico : Abstract We assess the extent to which historical levels of inequality affect the likelihood of businesses being created, surviving and of these cr eating jobs overtime. To this end, we build a pseudo-panel of entrepreneurs across 48 countries using the Global Entrepreneurship Monitor Survey over 2001-2009. We complement this pseudo-panel with historical data of income distribution and indicators of c [...]
- Technology and Intergenerational Persistence: Theory and Some Evidence
by Christian Zimmermann in NEP-DGE blog, 2015-02-10 15:54:26 UTC
By Brant Abbott and Giovanni Gallipoli
We develop and estimate an equilibrium model of intergenerational earnings persistence based on skill complementarity in production. We show that when a worker’s productivity is relatively independent of co-workers’ skills (i.e., skills are substitutable) parental investments in a child’s human capital have a stronger impact on the child’s future earnings. This leads to higher earnings’ persistence across generations. Observed patterns of geographic variation in intergenerational income persistence, both a [...]
- Hvordan opdager man vækstfirmaer?
by Christian Bjørnskov in Punditokraterne, 2015-02-10 13:14:44 UTC
Jeg skrev i Børsen i går om Sven-Olov Daunfeldt og Daniel Halvarssons nye forskning om højvækstfirmaer. Mange politikere mener, at vi bør støtte højvækstfirmaer for at skabe flere arbejdspladser og mere vækst, men problemet er stadig hvordan man identificerer dem. Alle politikere, jeg har talt med om emnet, mener at det er nemt: Man kan jo se dem der er successer. Den implicitte antagelse, som de færreste forstår, er at de firmaer, der er successer nu også er det om nogle få år. Hvis ikke giver den politiske identifikationsstrategi ingen mening.
Og deri ligger Daunfeldt og Halvar [...]
- #HEJC for 26/02/2015
by sognenis in The Academic Health Economists' Blog, 2015-02-10 06:30:32 UTC
The next #HEJC discussion will take place Thursday 26th February, at 11pm Â London time on Twitter. To see what this means for your time zone visit Time.is or join the Facebook event . For more information about the Health Economics Journal Club and how to take part, click here .
The paper for discussion is a working paper published by theÂ Canadian Centre for Health Economics (CCHE) . The authors are Koffi-Ahoto Kpelitse, Rose Anne Devlin and Sisira Sarma. The title of the paper is:
The effect of income on obesity among Canadian adults
Following the meeting, a transcript of the Twitter discu [...]
- Le lien entre échanges et croissance lors de la première mondialisation
by Martin Anota in D'un champ l'autre, 2015-02-09 18:26:36 UTC
Durant la Belle Epoque, la Belgique a enregistré une expansion sans précédents de son commerce extérieur. Au milieu du dix-neuvième siècle, elle exportait une gamme étroite de produits à une poignée de destinations ; à la veille de la Première Guerre mondiale, le nombre de produits belges exportés a plus que doublé, tout comme le nombre de destinations à l’export. La Belgique était ainsi devenue un « atelier du monde », tout comme le Royaume-Uni un demi-siècle plus tôt. Et pourtant, la croissance de sa productivité resta particulièrement faible. Cette énigme n’est pas spécifique à [...]
- 278 – Global wealth inequality
by David Pannell in Pannell Discussions, 2015-02-09 15:00:54 UTC
The charity Oxfam recently released a remarkable report on international wealth inequality. Based on data and analysis published by the Swiss financial company Suisse Credit, they highlighted that the aggregate wealth of the worldâs richest one percent of people is about the same as the aggregates wealth of the other 99 percent.
This made my head spin, so I wanted to see the graph of wealth distribution. Using the Oxfam/Suiss Credit data, I put together an approximation of the Lorenz Curve for the whole world (Figure 1). To create a Lorenz curve, you rank all the people, from poorest to rich [...]
- Heading for extinction?
by chris in Stumbling and Mumbling, 2015-02-09 14:17:57 UTC
Are our main political parties like banks in 2007? I'm prompted to ask because of the widespread belief that they are insufficiently differentiated. Seamus Milne complains that "only the narrowest range of policies is acceptable" and - from a different perspective - Nick Barlow bemoans the uninspiring "politics of non-differentiation":
If all you can do to distinguish yourself is claiming ‘slightly different than X and Y, but not by too much!’ then is it any wonder no one wants to pay attention to you?
Not everyone shares this view: Simon points out that the two main parties do differ si [...]
- Negative nominal interest rates: back to the future?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-02-09 13:26:52 UTC
Goldsmiths were the forerunners to modern bankers. Originally, they would issue receipts to certify gold was deposited in their vaults. These eventually gave rise to fractional reserve banking, as goldsmiths used a portion of the gold to make loans. Well, we might be on our way back to the original version, but instead of keeping our gold safe, banks will be keeping our dollar, Swiss franc, yen, and euro notes safe! Believe it or not, this story is tied to a current puzzle facing investors and monetary policy makers alike:� how low can nominal interest rates go? Answer: if they go too low, we [...]
- ECB Paddles Both Ways in the Rubicon
by Stephen G. Cecchetti in Huffington Post Business, 2015-02-09 12:47:54 UTC
On January 22, the ECB crossed the Rubicon twice -- but in opposite directions. In an effort to combat deflation and years of anemic growth, the central bank announced a sustained program of large-scale asset purchases. At the same time, it capped the amount of risk-sharing in the Eurosystem. Other central banks have done the first , but not the second. And, while outright balance sheet expansion helped ease euro area financial conditions somewhat, the limit on risk-sharing works in the other direction. Rowing toward both shores at the same time doesn't move a boat far or fast.
We will try t [...]
- Elite universities and social mobility
by nawmsayn in ZeeConomics, 2015-02-08 14:26:59 UTC
Social mobility has decreased over the past two decades. Overall, there was some divergence between countries: the US, the UK and France for instance experienced a decrease in social mobility, while the trends were rather flat in e.g. the Nordic countries.
One dimension along which these countries differ is their tertiary education system: the US, the UK and France have two-tier systems with standard and elite universities. In this post I’m asking what effect such a stratification of college education can have on social mobility.
This question is studied by Brezis and Hellier (2013) . Let us [...]
- Why not worker ownership?
by chris in Stumbling and Mumbling, 2015-02-08 13:13:41 UTC
Diane Coyle asks : why is profit-sharing not more common, given the evidence (pdf) that it increases productivity (pdf) and profitability (and well-being )?
To some extent, the premise behind the question is wrong: there are many more worker-owned firms than there are ones quoted on the stock market. Shared ownership is the norm for law, accountancy and medical practices - although they become less egalitarian as they get bigger. And in other cases, substantial worker-ownership is not feasible; I'm not sure workers should own their own oil rigs, for example.
Let's, though, grant the premise - [...]
- L’autonomie de la politique monétaire est une illusion
by Martin Anota in D'un champ l'autre, 2015-02-06 23:59:11 UTC
Avec la poursuite de la reprise de l’activité et de la création d’emplois aux Etats-Unis, il semble de plus en plus probable que la Fed commence à relever ses taux directeurs d’ici la fin de l’année 2015. La dernière fois qu’elle avait augmenté ses taux directeurs, ce fut lors de l’année 2006. La question qui se pose est comment le resserrement de la politique monétaire américaine va affecter les pays émergents, sachant que les conditions monétaires sont exceptionnelles aux Etats-Unis : non seulement les taux d’intérêt nominaux sont à leur borne zéro, mais la Fed a également adopt [...]
- “Entrepreneurship: Productive, Unproductive and Destructive,” W. Baumol (1990)
by afinetheorem in A Fine Theorem, 2015-02-06 22:46:47 UTC
William Baumol, who strikes me as one of the leading contenders for a Nobel in the near future, has written a surprising amount of interesting economic history. Many economic historians see innovation – the expansion of ideas and the diffusion of products containing those ideas, generally driven by entrepreneurs – as critical for growth. But we find it very difficult to see any reason why the “spirit of innovation” or the net amount of cleverness in society is varying over time. Indeed, great inventions, as undeveloped ideas, occur almost everywhere at almost all times. The steam engine of [...]
- The Statistical Implications of Common Identifying Restrictions for DSGE Models
by Christian Zimmermann in NEP-DGE blog, 2015-02-05 16:29:18 UTC
By Stephen Morris
I reveal identification failures in a well-known dynamic stochastic general equilibrium (DSGE) model, and study the statistical implications of common identifying restrictions. First, I provide a fully analytical methodology for determining all observationally equivalent values of the structural parameters in any parameter space. I show that either parameter admissibility or sign restrictions may yield global identification for some parameter realizations, but not for others. Second, I derive a “plug-in” maximum likelihood est [...]
- History of policy evaluation: a few questions
by Beatrice Cherrier in History of Economics Playground, 2015-02-05 15:26:43 UTC
I need a history of policy evaluation. I want my students to know why and how the theories, tools and practices they will later use on a daily basis were conceived and spread, and a good 80% of them will participate in a policy evaluation in the next 10 years. This need also derives from my research program, aimed at understanding the transformation of applied economics between 1965 and 1985. Policy analysis is a large part of what economists mean by ''applying economics.” It is area of expertise most emphasized in the ongoing advertising campaign designed to reemphasize economists' contribu [...]
- Le défi de l’accès et de la qualité de l’éducation dans les pays en développement
by firstname.lastname@example.org (Marine de Talance) in BS Initiative, 2015-02-05 09:54:26 UTC
- L’éducation est un enjeu majeur pour le développement.
- Début 2015, date butoir pour les Objectifs du Millénaires du Développement, nombre de pays, principalement en Afrique subsaharienne, sont encore loin d’avoir généralisé l’accès à l’éducation primaire. Des franges entières de la population demeurent exclues du système éducatif.
- Plus préoccupant encore, la qualité de l’éducation dans certains pays en développement est trop faible pour pouvoir espérer bénéficier des bienfaits de l’éducation.
- L’agenda post-2015 doit donc clairem [...]
- Troika e disinformazione: quelli che ‘portiamo la democrazia in Europa’
by Alberto Bagnai in Il Fatto Quotidiano, 2015-02-05 09:41:32 UTC
Non ho le competenze per poter definire in modo scientifico (nel senso delle scienze politiche) cosa sia la democrazia : diciamo che io, come la maggior parte di voi, la democrazia la vivo, o la subisco, ma non la studio. Tuttavia sono ragionevolmente certo del fatto che nessuno scienziato politico contesterebbe, almeno non apertamente, lâidea che un presupposto della democrazia sia la corretta informazione dei cittadini, del demos. Se il demos deve governare, Ã¨ quanto meno opportuno che lo faccia con una minima cognizione di causa, e questo tanto piÃ¹ quanto piÃ¹ si invoca la democrazia di [...]
by J. Ignacio Conde-Ruiz in Nada Es Gratis, 2015-02-05 06:33:27 UTC
(por J. Ignacio Conde-Ruiz @conderuiz ) y Lucía Gorjón )
Mucho se ha escrito en este blog sobre la precariedad laboral, sirva como ejemplo este post de Floren donde identifico a 11 millones de trabajadores en precario . O este de Marcel sobre la temporalidad asociada a la parcialidad . El objetivo de este post es analizar la precariedad utilizando los distintos indicadores relevantes de los que disponemos.
Los últimos datos de la EPA del cuarto trimestre de 2014 son positivos, principalmente si nos fijamos en la creación de empleo, donde la tasa de crecimiento interanual se acelera hast [...]
by chris in Stumbling and Mumbling, 2015-02-04 13:25:11 UTC
There's a point being missed in the debate about whether Labour is anti -business - that there is, in fact, a good case for being anti-business.
I don't just mean that business dodges taxes and pays low wages. Such talk of unfairness distracts from the fact that, in recent years at least, business has simply failed.
For one thing, the greatest economic disaster of the last 80 years was a failure of business - the collapse of banks in 2007-08.
And for another, business has failed to invest in real assets despite making big profits. Since 2000 non-financial businesses' retained profits have ex [...]
- Precautionary Saving and Aggregate Demand
by Christian Zimmermann in NEP-DGE blog, 2015-02-04 05:40:08 UTC
By Edouard Challe, Julien Matheron, Xavier Ragot and Juan F. Rubio-Ramirez
We formulate and estimate a tractable macroeconomic model with time-varying precautionary savings. We argue that the latter affect aggregate fluctuations via two main channels: a stabilizing aggregate supply effect working through the supply of capital; and a destabilizing aggregate demand effect generated by a feedback loop between unemployment risk and consumption demand. Using the estimated model to measure the contribution of precautionary savings to the propagation [...]
- Paul Krugman Pontificating on Policy Rules
by John Taylor in Economics One, 2015-02-03 18:43:44 UTC
In a recent blog post Â Paul Krugman talks a lot about policy rules and the Taylor rule in particular.
He complains that âRepublicans are pushing to mandate that the Fed follow the so-called Taylor rule.âÂ But the policy rule legislation that has come out of Congress recently would simply require the Fed to describe a rule or strategy of its own choosing, not follow any specific rule. Â The legislation refers to a policy rule that I invented, but simply as a âreference rule,â not a âmandated rule.â Â Â Fed officials have been referring to that rule for many years as a benchmark, o [...]
- Liquidité mondiale, prix de l’immobilier et macroéconomie
by Martin Anota in D'un champ l'autre, 2015-02-03 17:43:43 UTC
Les crises bancaires et les crises de change qui ont touché les pays émergents au cours des années quatre-vingt-dix et au début des années deux mille ont très souvent été précédées par un boom (dans le secteur immobiliers ou un autre secteur de biens non échangeables) alimenté par une forte expansion du crédit et par une surévaluation de leur taux de change [Claessens et alii , 2013]. Des auteurs comme Valentina Bruno et Hyun Song Shin (2014) suggèrent qu’un mécanisme similaire a également été à l’œuvre dans la zone euro et qu’il aurait été à l’origine des crises bancaires et exte [...]
- 'Is Democratic Keynesianism Possible?'
by Mark Thoma in Economist's View, 2015-02-03 10:44:11 UTC
Chris Dillow follows up on Simon Wren-Lewis's call for an independent fiscal policy authority:
Is democratic Keynesianism possible? : Simon calls for fiscal policy to be set independently of government, to prevent it "being corrupted by politics and ideology." This might seem like pointy-headed technocracy. In fact, it is more radical than that. ...
There can be little doubt that business has captured government. We saw an example of this yesterday. Stefano Pessina's claim that a Labour victory would be "catastrophic" was reported as if it were news that a billionaire isn't keen on lefti [...]
- Free access to our Article on the Comparative Political Economy of Public Investment
by ecprpoliticaleconomy in Polidigwerkschdaeddle, 2015-02-03 01:03:26 UTC
The article is out in Comparative Economics. For 50 days this links gives you access to a free copy :
Here is the abstract:
We study the role of political institutions in the regional allocation of public infrastructure investments in France, Germany, Italy, and Spain. We estimate the regional variation in the allocation for each country, controlling for the potential endogeneity of its impact on growth and distribution. We compare the importance of political institutions, federalism and the electoral system, with the normative criteria, efficiency, redistribution and equality. We find that o [...]
- Is democratic Keynesianism possible?
by ? in Stumbling and Mumbling, 2015-02-02 14:24:00 UTC
Simon calls for fiscal policy to be set independently of government, to prevent it "being corrupted by politics and ideology." This might seem like pointy-headed technocracy. In fact, it is more radical than that.
To see why, consider why we cannot rely up [...]