Why macro-economists never win the Nobel prize

[peterbirks]

Alvin Roth and Lloyd Shapley have won the Nobel Prize for economics. It's another kind of gane-theory award. You might as well award the Nobel prize for economics for showing the optimal strategy with two draws to come and a Kxxx badugi against one opponent who is drawing one

Comments

[peterbirks]

Blimey Mike, considering how much the investment banks have taken out of the real economy without, as far as I can see, giving much back, you must have spent one hell of a lot of that unearned income (I'm not saying that you didn't earn it, merely that your bank paid itself, and, therefore, you, out of "profits" that were not genuinely created wealth, meaning that you were paid a bonus on wealth that was fictional) in the past decade if you aren't ready to retire. And, yes, I do include your bank in this -- that $5bn or so that it got from the US government in 2009 over AIG's 100 cents on the dollar basically just came from the printing presses. In genuine terms it should have been about 40 cents on the dollar.

On your previous point. Yes, you are in part correct; it would mainly be compatible with absolute economic growth. Good point.

However, there are caveats. The first is that improving efficiency should lead to greater economic wealth, although this might be hard to measure. The second is that it's easier to create jobs for unemployed youngsters (they are cheaper for a start) than it is to get older people back into the world of economic productivity. So I'm not saying keep someone old in a job in exchange for keeping someone young out of a job. I am, indceed, saying keep a greater proportion of the workforce economically active.

However, if you don't, there are "hidden" economic benefits -- just as in wartime (and this is a kind of war). One is that young unemployed tend to postpone having a family, and having a family is a big drain on a country's economy. If old people retire and their jobs go to younger people, you get a higher proportion of "economic dependents" (because those younger people will marry and have kids) than if you keep older people in jobs and economically force younger people to postpone their breeding.

Unpleasant facts (I told you macroeconomists wouldn't win the Nobel Prize) but we've seen evidence of this in the past.

PJ