Lots of economic links
Clarke and Dawe explain Europe’s debt problems (for non-Oz readers, you will laugh lots).
A nice list of economic fallacies of the left and the right.
Nice post on macro models.
When a pig gets killed, nothing is wasted.
Worrying that cities are deteriorating as avenues of upward social mobility.
Rwanda is having a coffee success story. An aid flow chart. Study finds that US aid policy encouraged purchase of US products. About the pitfalls in analysing the behaviour of the poor.
Paper finds that inequality in agricultural endowments has adverse consequences (pdf):
While finding some evidence consistent with other development fundamentals, the paper finds high inequality to independently be a large and statistically significant barrier to prosperity, good quality institutions, and high schooling.
Haiti, which has lots of NGOs, is a hard place to start a business, or to expand one. The aid donors appear to be now running Haiti.
Regime uncertainty: a US entrepreneur who prefers to deal with Beijing than Washington because the former is a lot more stable and predictable to deal with.
Laffer curve in operation: Washington D.C. hikes cigarette taxes, revenue plummets (because people buy their cigarettes elsewhere).
Useful post statistically disentangling aspects of the Heritage economic freedom index. Another useful post statistically disentangling the index. (As the second poster explicitly notes, Heritage is to be commended for releasing all its data: would that climate science would show the same commitment to scholarly openness.)
“Green” energy subsidies in Europe are not working so well.
Study finds that economic understanding is not correlated with going to college. Progressives and liberals tend to show far less grasp of basic economics than conservatives and libertarians.
A nice post putting clear empirical evidence against dumb ideas on labour markets. Comparing long-term unemployment rates of OECD countries. Graph of workplace fatalities over time: the passing of the 1971 OSHA Act seems to have no effect on the rate of decline. Study finds that whether a cricketeer debuts at home or abroad affects his future income.
Arguing about the performance of the US economy pre and post Reagan. And also. A nice observation here.
Studying whether economists change their tune depending on who is in the White House:
Six economists are found to change their tune - Paul Krugman in a significant way, Alan Blinder in a moderate way, and Martin Feldstein, Murray Weidenbaum, Paul Samuelson, and Robert Solow in a minor way - while eleven are found to be fairly consistent.
Study finds “negligent homicide” by regulation agencies primarily responsible for (pdf) the global financial collapse:
In this postmortem, I find that the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system’s demise. The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble (“accident”) and the herding behavior of financiers rushing to create and market increasingly complex and questionable financial products (“suicide”). Rather, the evidence indicates that regulatory agencies were aware of the growing fragility of the financial system due to their policies and yet chose not to modify those policies, suggesting that “negligent homicide” contributed to the financial system’s collapse.
A 1988 paper by Fed Chair Ben Bernanke on credit transmission of money (pdf). Money supply in the US is plummeting: it would be good if the Fed would get over its anti-inflation obsession and moved to expansionary monetary policy. A US and a British economist discuss the Great Recession, the Global Financial Crisis and sovereign insolvency. Explanation of how “structured finance” “worked”.
Arguing that the US is having a balance sheet recession (pdf), like that of Japan 1990-2005. Really nice post on the demographics of Japan’s economic performance (which, BTW, puts the kybosh on the “fiscal stimulus is the answer” position of the previous paper).
The Venezuelan economy is running into fairly predictable problems from the adoption of socialist policies.
When GM announced it was paying back the government loans, it was overstating somewhat.
Private company paychecks fell to record low proportion of US personal income, government payments hit a record high.
In the US, the higher the rate of unionisation of the state workforce, the higher the rate of state debt and the lower the quality of state management. More (pdf). A case in point: New York bus drivers can get months off it they are spat upon. The Obama Administration is using the power of the federal purse to favour unionised construction companies.
California has a huge unfunded pension liability problem:
How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.
As we saw during the recent financial crisis, hiding debt is not a new phenomenon. Indeed, General Motors did something similar to obscure the true cost of its retirement promises. Through aggressive accounting, for a while it, too, got away with making pension contributions that were a fraction of what it really needed to make, thereby reporting better earnings than was truly the case.
But eventually the pension promises come due, and for GM, that meant having to add extra costs to its cars, making its prices less attractive to consumers and contributing to its eventual bankruptcy.
In California's case, past pension underfunding means reduced funding of current programs. This explains why pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined over the same period.
The US federal government has a lot of financial liabilities:
The 2009 federal balance sheet indicates that the government’s net position (total assets less total liabilities) is a negative $11.5 trillion, 12.3 percent worse than the previous year. But that’s just the tip of the iceberg. That negative balance excludes government obligations for social insurance programs, mainly Social Security and Medicare.
Whether social insurance should be booked as a liability has long been a controversial issue among government accountants….
Unable to reach agreement as to whether social insurance should be included as a balance sheet liability, the members of the FASAB compromised, and thus, immediately following the balance sheet is a “Statement of Social Insurance.” In the 2009 annual report this indicates that the total present value of estimated social insurance expenditures over revenues is $45.9 trillion.
Hence, simple addition indicates that the total net position of the government is a whopping negative $57.4 trillion.
About Kurdistan:
Kurdistan is a developing nation. One says that about every Third World country, but usually it’s a white lie, a way to avoid telling people that the policies their governments are implementing will only deepen poverty in years to come. Here, by contrast, foreign investors are welcomed, the private sector is encouraged, and progress is obvious. Oil is being pumped, there are two new international airports, and new buildings are sprouting just about everywhere. There are new car dealerships - everything from Skoda to Cadillac - and stores overflow with local and imported goods, including even liquor and Western-style bridal gowns. The Kurdish government will spend $100 million a year to send promising students to universities abroad - an investment in the future, and just one component of the most ambitious education-reform effort anywhere in the Middle East.
Arguing that Greece is not as rich as it is generally thought to be. And also. Former head of the Bundesbank is skeptical that Greece will be able to stay in the euro. Meanwhile, the Greek government finds that forcing a pharmaceutical company to sell insulin at a loss means they do not sell at all.
In Oz, the mining industry is already paying the highest effective tax rate of any industry.
Gary Becker on bubbles. Suggesting Oz housing market is going in the same direction as California’s before the crash. More on Oz’s housing madness. Sydney now has more expensive housing than London or New York: when does the madness stop?
A nice list of economic fallacies of the left and the right.
Nice post on macro models.
When a pig gets killed, nothing is wasted.
Worrying that cities are deteriorating as avenues of upward social mobility.
Rwanda is having a coffee success story. An aid flow chart. Study finds that US aid policy encouraged purchase of US products. About the pitfalls in analysing the behaviour of the poor.
Paper finds that inequality in agricultural endowments has adverse consequences (pdf):
While finding some evidence consistent with other development fundamentals, the paper finds high inequality to independently be a large and statistically significant barrier to prosperity, good quality institutions, and high schooling.
Haiti, which has lots of NGOs, is a hard place to start a business, or to expand one. The aid donors appear to be now running Haiti.
Regime uncertainty: a US entrepreneur who prefers to deal with Beijing than Washington because the former is a lot more stable and predictable to deal with.
Laffer curve in operation: Washington D.C. hikes cigarette taxes, revenue plummets (because people buy their cigarettes elsewhere).
Useful post statistically disentangling aspects of the Heritage economic freedom index. Another useful post statistically disentangling the index. (As the second poster explicitly notes, Heritage is to be commended for releasing all its data: would that climate science would show the same commitment to scholarly openness.)
“Green” energy subsidies in Europe are not working so well.
Study finds that economic understanding is not correlated with going to college. Progressives and liberals tend to show far less grasp of basic economics than conservatives and libertarians.
A nice post putting clear empirical evidence against dumb ideas on labour markets. Comparing long-term unemployment rates of OECD countries. Graph of workplace fatalities over time: the passing of the 1971 OSHA Act seems to have no effect on the rate of decline. Study finds that whether a cricketeer debuts at home or abroad affects his future income.
Arguing about the performance of the US economy pre and post Reagan. And also. A nice observation here.
Studying whether economists change their tune depending on who is in the White House:
Six economists are found to change their tune - Paul Krugman in a significant way, Alan Blinder in a moderate way, and Martin Feldstein, Murray Weidenbaum, Paul Samuelson, and Robert Solow in a minor way - while eleven are found to be fairly consistent.
Study finds “negligent homicide” by regulation agencies primarily responsible for (pdf) the global financial collapse:
In this postmortem, I find that the design, implementation, and maintenance of financial policies during the period from 1996 through 2006 were primary causes of the financial system’s demise. The evidence is inconsistent with the view that the collapse of the financial system was caused only by the popping of the housing bubble (“accident”) and the herding behavior of financiers rushing to create and market increasingly complex and questionable financial products (“suicide”). Rather, the evidence indicates that regulatory agencies were aware of the growing fragility of the financial system due to their policies and yet chose not to modify those policies, suggesting that “negligent homicide” contributed to the financial system’s collapse.
A 1988 paper by Fed Chair Ben Bernanke on credit transmission of money (pdf). Money supply in the US is plummeting: it would be good if the Fed would get over its anti-inflation obsession and moved to expansionary monetary policy. A US and a British economist discuss the Great Recession, the Global Financial Crisis and sovereign insolvency. Explanation of how “structured finance” “worked”.
Arguing that the US is having a balance sheet recession (pdf), like that of Japan 1990-2005. Really nice post on the demographics of Japan’s economic performance (which, BTW, puts the kybosh on the “fiscal stimulus is the answer” position of the previous paper).
The Venezuelan economy is running into fairly predictable problems from the adoption of socialist policies.
When GM announced it was paying back the government loans, it was overstating somewhat.
Private company paychecks fell to record low proportion of US personal income, government payments hit a record high.
In the US, the higher the rate of unionisation of the state workforce, the higher the rate of state debt and the lower the quality of state management. More (pdf). A case in point: New York bus drivers can get months off it they are spat upon. The Obama Administration is using the power of the federal purse to favour unionised construction companies.
California has a huge unfunded pension liability problem:
How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.
As we saw during the recent financial crisis, hiding debt is not a new phenomenon. Indeed, General Motors did something similar to obscure the true cost of its retirement promises. Through aggressive accounting, for a while it, too, got away with making pension contributions that were a fraction of what it really needed to make, thereby reporting better earnings than was truly the case.
But eventually the pension promises come due, and for GM, that meant having to add extra costs to its cars, making its prices less attractive to consumers and contributing to its eventual bankruptcy.
In California's case, past pension underfunding means reduced funding of current programs. This explains why pension costs rose 2,000% from 1999 to 2009, while state funding for higher education declined over the same period.
The US federal government has a lot of financial liabilities:
The 2009 federal balance sheet indicates that the government’s net position (total assets less total liabilities) is a negative $11.5 trillion, 12.3 percent worse than the previous year. But that’s just the tip of the iceberg. That negative balance excludes government obligations for social insurance programs, mainly Social Security and Medicare.
Whether social insurance should be booked as a liability has long been a controversial issue among government accountants….
Unable to reach agreement as to whether social insurance should be included as a balance sheet liability, the members of the FASAB compromised, and thus, immediately following the balance sheet is a “Statement of Social Insurance.” In the 2009 annual report this indicates that the total present value of estimated social insurance expenditures over revenues is $45.9 trillion.
Hence, simple addition indicates that the total net position of the government is a whopping negative $57.4 trillion.
About Kurdistan:
Kurdistan is a developing nation. One says that about every Third World country, but usually it’s a white lie, a way to avoid telling people that the policies their governments are implementing will only deepen poverty in years to come. Here, by contrast, foreign investors are welcomed, the private sector is encouraged, and progress is obvious. Oil is being pumped, there are two new international airports, and new buildings are sprouting just about everywhere. There are new car dealerships - everything from Skoda to Cadillac - and stores overflow with local and imported goods, including even liquor and Western-style bridal gowns. The Kurdish government will spend $100 million a year to send promising students to universities abroad - an investment in the future, and just one component of the most ambitious education-reform effort anywhere in the Middle East.
Arguing that Greece is not as rich as it is generally thought to be. And also. Former head of the Bundesbank is skeptical that Greece will be able to stay in the euro. Meanwhile, the Greek government finds that forcing a pharmaceutical company to sell insulin at a loss means they do not sell at all.
In Oz, the mining industry is already paying the highest effective tax rate of any industry.
Gary Becker on bubbles. Suggesting Oz housing market is going in the same direction as California’s before the crash. More on Oz’s housing madness. Sydney now has more expensive housing than London or New York: when does the madness stop?