Its been too long since last book club and there are a number of books lining up that I would really like to discuss in person outside of office time. So, a few of us will meet in the Duke Bar, Tuesday December 8th at 7.30pm to discuss the book Nudge . Let me know by email if you would like to come. Usual group between 5 and 12 people. In the unlikely event that more than that want to come, I can request a section in advance. You don’t really need to have read the book to participate and feel free to come along. I will bring a synopsis for people.
New IZA Paper: What Can We Learn From Molecular Genetics
Nature, Nurture and Egalitarian Policy: What Can We Learn from Molecular Genetics?
by Petter Lundborg, Anders Stenberg
(November 2009)
Abstract:
This brief paper draws attention to molecular genetic research which may provide a new dimension to our understanding of how socioeconomic outcomes are generated. In particular, we provide an overview of the recently emerging evidence of gene-environment interaction effects. This literature points out specific policy areas which may compensate individuals carrying genetic risks, without resorting to gene mapping of the population. Such policies would also increase intergenerational mobility if genetic and/or environmental risk factors are more common in socially disadvantaged groups.
Posted by jqwnph5 at 07:28 0 comments
Gallup Daily
Just checking out the measures Gallup have been tracking on a daily basis in the U.S. over the last couple of years. Something like Obama’s approval rating strikes me as hugely informative with a 60 percentage point difference between the approve-disapprove groups crashing to a 5 point difference in 6 or 7 months. The life evaluations of the US population are clearly responding to economic changes with Christmas bringing about an increased percentage of people ’struggling’ as would be expected. The surprise for me was the mood ratings which are practically invariant, with happiness showing a slight decline prior to Christmas which is about the only visible trend aside from weekend peaks and mid-week declines. Contrasting these ratings with the swings in measures of life evaluations, consumer confidence, political confidence, spending, does this mean that emotions are largely unresponsive to such changes?
Posted by jqwnph5 at 07:28 0 comments
Dubai to All That
The vaunting towers of Dubai provide an irresistible metaphor for the hubris of globalised capitalism, and the newspapers have been falling over themselves to draw attention to the fact that this small, Gulf emirate is, quite literally, built on sand. For a green economist, however, it is the social and environmental consequences of this artificial paradise that raise the most pressing questions.
In the more ‘advanced’ economies of the West, the tasteful veil between government and corporation is still maintained – in Dubai this was not the case, and it is difficult when reading some of the press stories to distinguish between Dubai World – the venture capital development corporation responsible for the irresponsible building projects – and the state of Dubai. And surely Sheikh Mohammed bin Rashid al-Maktoum could have used the phrase ‘L’etat c’est moi’ with more aplomb than Louis XIV ever dared. Reading about his nefarious dealings makes one wonder whether George Clooney followed the Beckhams in the trek to buy luxury apartments on Dubai’s palmtree-shaped beach complex.
With energy no object it is possible to summon extraordinary buildings from sand and to make deserts bloom. The environmental consequences of this profligate use of the planet’s dwindling oil resources receive far too little attention. While public debate concentrates on China’s carbon dioxide emissions attention is distracted form the fact that the oil-producing states have the worst per capita record in this area. The other side of the coin is the human exploitation: the legions of South Asian immigrants who, like Irish navvies during our own 19th century building bonanza, were responsible for the heavy lifting for low pay that brought this crazed dream into existence.
Dubia is the apotheosis of an economy which is unsustainable in every sense: a grossly intensivised playground where the heedless and amoral playboys and playgirls, spawned by globalisation and a capitalist system that has broken all bounds of social control, enjoy pleasure without responsibility. Its gleaming untarnished towers are like the body of Dorian Gray; the abused workers and corrupted atmosphere are the the true picture, hidden away in the attic of our imaginations.*
Dubai is the sort of development you end up with when you let money make all the decisions. The creation of an elite resort for the super-rich is a perfect illustration of the logic of this late and putrescent stage of capitalism. It tempts you to imagine your way into a near future and imagine children being shown pictures of the artificial archipelago to help them learn the lessons of ecology.
*Thanks to Mary Mellor for this metaphor, whose appeal has helpfully been broadened by the recent movie.
Posted by jqwnph5 at 07:28 0 comments
New IZA Paper: What Can We Learn From Molecular Genetics
Nature, Nurture and Egalitarian Policy: What Can We Learn from Molecular Genetics?
by Petter Lundborg, Anders Stenberg
(November 2009)
Abstract:
This brief paper draws attention to molecular genetic research which may provide a new dimension to our understanding of how socioeconomic outcomes are generated. In particular, we provide an overview of the recently emerging evidence of gene-environment interaction effects. This literature points out specific policy areas which may compensate individuals carrying genetic risks, without resorting to gene mapping of the population. Such policies would also increase intergenerational mobility if genetic and/or environmental risk factors are more common in socially disadvantaged groups.
Posted by jqwnph5 at 07:28 0 comments
Book Club: Nudge
Its been too long since last book club and there are a number of books lining up that I would really like to discuss in person outside of office time. So, a few of us will meet in the Duke Bar, Tuesday December 8th at 7.30pm to discuss the book Nudge . Let me know by email if you would like to come. Usual group between 5 and 12 people. In the unlikely event that more than that want to come, I can request a section in advance. You don’t really need to have read the book to participate and feel free to come along. I will bring a synopsis for people.
Posted by jqwnph5 at 07:28 0 comments
Attitudes of Economics Graduate Students
11/26/2009Economic Logic Blog (a consistently good source) points to a new paper by David Colander and colleagues on how students from median graduate schools think compared to those from the top ones.
How Do Median Graduate Economic Programs Differ from Top-ranked Programs? Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
David Colander (colander@middlebury.edu)
Tiziana Dominguez
Gail Hoyt
KimMarie McGoldrick
Abstract
This paper reports the results of a survey of median economics graduate programs and compares it with the results of a survey of top economics graduate programs done by Colander. Overall it finds that while there are some differences in the programs, there are large areas of similarity. Some of the particular finding are that there are more US respondents in median programs than in top programs, median students have more interest in econometrics, history of thought and economic literature than do students at top programs, although after the fifth year, their interest in any field drops significantly. It also finds that students at top schools are much more likely to be involved in writing scholarly papers, and that students at top schools give far less emphasis to excellence in mathematics as a path to the fast track than do students at median schools.
Posted by jqwnph5 at 04:37 0 comments
LSE Talks
Some of the recent talks in the LSE series (which is now one of the best web seminar resources for economics worldwide) are really worth following. Includes Esther Duflo, Amartya Sen, Michael Sendel, Steven Levitt and many others
Posted by jqwnph5 at 04:37 0 comments
Attitudes of Economics Graduate Students
Economic Logic Blog (a consistently good source) points to a new paper by David Colander and colleagues on how students from median graduate schools think compared to those from the top ones.
How Do Median Graduate Economic Programs Differ from Top-ranked Programs? Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
David Colander (colander@middlebury.edu)
Tiziana Dominguez
Gail Hoyt
KimMarie McGoldrick
Abstract
This paper reports the results of a survey of median economics graduate programs and compares it with the results of a survey of top economics graduate programs done by Colander. Overall it finds that while there are some differences in the programs, there are large areas of similarity. Some of the particular finding are that there are more US respondents in median programs than in top programs, median students have more interest in econometrics, history of thought and economic literature than do students at top programs, although after the fifth year, their interest in any field drops significantly. It also finds that students at top schools are much more likely to be involved in writing scholarly papers, and that students at top schools give far less emphasis to excellence in mathematics as a path to the fast track than do students at median schools.
Posted by jqwnph5 at 04:37 0 comments
Labour Market Initiatives in Ireland
I mentioned the details of the Work Placement Programme (and pilot Short Time Working Training Programme) last month. And further information about labour market policy in Ireland. As well as the IBEC graduate internship scheme.
These are separate initiatives to the Employment Subsidy Scheme. This scheme is outlined here on the website of the Dept. of Enterprise, Trade and Employment. And discussed here in an article from the Irish Times, earlier this month. The scheme is managed by Enterprise Ireland; but it is a separate initiative to the Enterprise Stabilisation Fund.
The Employment Subsidy Scheme was originally intended to support the retention of jobs in viable exporting enterprises that might otherwise be made redundant. The scheme has been extended to non-exporting companies; and over 7,000 jobs are to receive direct financial support in the first round. According to the Irish Times, it is hoped that 27,400 vulnerable jobs will be safeguarded during the lifetime of the €250 million scheme. The goal of retaining jobs that might otherwise be made redundant is an important consideration, as this would avoid the problem of deadweight loss.
Another article from the Irish Times (from earlier this month again), says that:
the lessons from Germany, which has experimented with different schemes to varying degrees of success, is that these schemes (employment-subsidy) can work if they are structured correctly… director of Forschungsinstitut zur Zukunft der Arbeit (Institute for the Study of Labour), German economist Prof Klaus Zimmermann has seen both the merits and flaws of wage subsidies."Global wage subsidies to entire industries or all companies to encourage new employment are very expensive and provide no substantial employment effects," he says. But subsidies granted to individual companies to hire unemployed people have been effective, especially when combined with job-related training.
Although it is aimed at full-time workers, the Government's Employment Subsidy Scheme has some things in common with Germany's successful Kurzarbeit, or short-time work programme, in the sense that the cost of paying existing employees is shared, Prof Zimmermann says.
Kurzarbeit, according to ING, “is a form of government work subsidy in Germany in which employees get about 80% of their salary for working half-time. (The German government announced last week it was likely to extend its Kurzarbeit scheme for another 18 months).” This is what Liam and Kevin were discussing in recent posts.
_________________________________________________________________
Addendum: Today, the European Parliament approved Ireland's application under the European Globalisation Fund (EGF) in support of active labour market measures for redundant workers at DELL and ancillary companies. The European Commission had already approved the Irish application in September. According to the Tánaiste, Mary Coughlan, “EGF funding, when received by Ireland, can and will be effectively and efficiently spent on retraining, upskilling and providing educational and entrepreneurial supports for almost 2,500 redundant workers in the Mid West.” More details available here.
Posted by jqwnph5 at 04:37 0 comments
Labour Market Initiatives in Ireland
I mentioned the details of the Work Placement Programme (and pilot Short Time Working Training Programme) last month. And further information about labour market policy in Ireland. As well as the IBEC graduate internship scheme.
These are separate initiatives to the Employment Subsidy Scheme. This scheme is outlined here on the website of the Dept. of Enterprise, Trade and Employment. And discussed here in an article from the Irish Times, earlier this month. The scheme is managed by Enterprise Ireland; but it is a separate initiative to the Enterprise Stabilisation Fund.
The Employment Subsidy Scheme was originally intended to support the retention of jobs in viable exporting enterprises that might otherwise be made redundant. The scheme has been extended to non-exporting companies; and over 7,000 jobs are to receive direct financial support in the first round. According to the Irish Times, it is hoped that 27,400 vulnerable jobs will be safeguarded during the lifetime of the €250 million scheme. The goal of retaining jobs that might otherwise be made redundant is an important consideration, as this would avoid the problem of deadweight loss.
Another article from the Irish Times (from earlier this month again), says that:
the lessons from Germany, which has experimented with different schemes to varying degrees of success, is that these schemes (employment-subsidy) can work if they are structured correctly… director of Forschungsinstitut zur Zukunft der Arbeit (Institute for the Study of Labour), German economist Prof Klaus Zimmermann has seen both the merits and flaws of wage subsidies."Global wage subsidies to entire industries or all companies to encourage new employment are very expensive and provide no substantial employment effects," he says. But subsidies granted to individual companies to hire unemployed people have been effective, especially when combined with job-related training.
Although it is aimed at full-time workers, the Government's Employment Subsidy Scheme has some things in common with Germany's successful Kurzarbeit, or short-time work programme, in the sense that the cost of paying existing employees is shared, Prof Zimmermann says.
Kurzarbeit, according to ING, “is a form of government work subsidy in Germany in which employees get about 80% of their salary for working half-time. (The German government announced last week it was likely to extend its Kurzarbeit scheme for another 18 months).” This is what Liam and Kevin were discussing in recent posts.
_________________________________________________________________
Addendum: Today, the European Parliament approved Ireland's application under the European Globalisation Fund (EGF) in support of active labour market measures for redundant workers at DELL and ancillary companies. The European Commission had already approved the Irish application in September. According to the Tánaiste, Mary Coughlan, “EGF funding, when received by Ireland, can and will be effectively and efficiently spent on retraining, upskilling and providing educational and entrepreneurial supports for almost 2,500 redundant workers in the Mid West.” More details available here.
Posted by jqwnph5 at 04:37 0 comments
Kinsella - Ireland in 2050
UL Economics Lecturer Stephen Kinsella has recently released a book called Ireland in 2050. The book is partly inspired by the classic essay “Economic Possibilities for our Grandchildren” by Keynes and attempts to map out the major changes in Irish economy and society that will take place over the next 40 years. The book is divided into twelve chapters (roughly speaking – introduction, background, demography, leisure, environment, energy, work, suburbs and cities, health, inequality, governance, conclusion). The basic concept of the book is a good one – a neccesary attempt to start some long-term debates even as the immediate present seems urgent enough to occupy the vast share of public debate. The basic thrust of the book is continuity, with the author seeing a 2050 world very similar to our own but one where the growth of China, an aging population, innovations in energy, changing health demands and health technologies, changing gender roles, increased flooding, changing attitudes to work and privacy and so on have left their mark. The average irish householder in 2050 will, among other things, be older, will be more likely to have run a number of businesses, will drive an electric car and view China as an intimate part of their business plans. NAMA is just winding down, Ireland is still heavily embedded in the EU, Dublin has sprawled further, Nuclear power has become a reality and, in general, if you fell into a coma now and woke up in the imagined Ireland in 2050 you would probably figure things out reasonably quickly.
I am inclined to agree with Gerard O’Neill’s view that the book is painting a picture of ireland in 2020 as much as in 2050, with many of the trends being picked up processes that are already underway, though this is not a fatal weakness. The author puts together a set of trends that almost every analyst agrees on as important and knits them into a simple vision that can act as a spark to a wider debate. In doing this however, the book does not delve deeply into potential disruptive events that are being widely discussed across many fields. We do not spend much time thinking about the consequence of a major bio or nuclear strike on the US mainland (see for example Martin Rees Our Final Century). Other major debates, such as the implications of human genetic engineering or increasing human-machine interfaces, are also absent from the story of the book. If I could take up any part of Stephen’s offer of a row, it would be to debate the extent to which such “black swans” should be an integral feature of our planning. In one school of thought, worrying too much about catastrophic events with low predictability that are outside of our control distract us from the very pressing and predictable problems outlined in the book. Take, for example, the number of people who are now worrying about ancient Mayan prophecies on the back of a new blockbuster peddling another apocalypse story. On the other hand, failure to adapt a society to the potential for catastrophic changes or major disruptive technologies is clearly also dangerous in its way. A debate about the types of human values and institutions needed to get a population through a major disruptive event should be a feature of the row that Stephen is trying to start.
I think this book works well as a first gambit designed, as the author suggests, to start a debate rather than conclude one. It represents a sensible view on a very wide range of issues facing Ireland and other countries in the next forty years and I commend the author for getting this debate going. As a lecturer in several broad economics courses in UL and someone continuously and frantically active as a teacher, researcher and commenter, the author is very well placed to moderate a national debate on the long-term future of the country and I look forward to seeing how this concept develops over the next few years. To make decisions clearly about the future, it is important to be able to see clearly the potential outcomes, to identify with things that are not in our immediate surrounding, to divorce ourselves from current pressures to enable rational thought. This book and follow-ups will help with that. Being able to think far ahead has many potential benefits and I hope that Stephen is successful in bedding this concept into political and popular debate.
Posted by jqwnph5 at 04:37 0 comments
Fiscal Policy Event
From Philip Lane
Reminder: the SSISI event is tomorrow evening, details are here. Contributors: Dr Niamh Hardiman (UCD), Mr Blair Horan (CPSU), Mr Colm McCarthy (UCD) and Mr David Croughan (IBEC).
The paper by Niamh Hardiman is already online here.
Posted by jqwnph5 at 04:37 0 comments
Minimum wages & obesity
The paper below ties together two important but seemingly disparate topics minimum wages and obesity. The argument is that in the US the federal minimum wage fell between 1968 and 2007 thus making fast food cheaper and this should have lead to more obesity.
They find “… that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States.”
The impact of minimum wage rates on body weight in the United States
D Meltzer, Z Chen
http://papers.nber.org/papers/w15485
Posted by jqwnph5 at 04:37 0 comments
Kinsella - Ireland in 2050
UL Economics Lecturer Stephen Kinsella has recently released a book called Ireland in 2050. The book is partly inspired by the classic essay “Economic Possibilities for our Grandchildren” by Keynes and attempts to map out the major changes in Irish economy and society that will take place over the next 40 years. The book is divided into twelve chapters (roughly speaking – introduction, background, demography, leisure, environment, energy, work, suburbs and cities, health, inequality, governance, conclusion). The basic concept of the book is a good one – a neccesary attempt to start some long-term debates even as the immediate present seems urgent enough to occupy the vast share of public debate. The basic thrust of the book is continuity, with the author seeing a 2050 world very similar to our own but one where the growth of China, an aging population, innovations in energy, changing health demands and health technologies, changing gender roles, increased flooding, changing attitudes to work and privacy and so on have left their mark. The average irish householder in 2050 will, among other things, be older, will be more likely to have run a number of businesses, will drive an electric car and view China as an intimate part of their business plans. NAMA is just winding down, Ireland is still heavily embedded in the EU, Dublin has sprawled further, Nuclear power has become a reality and, in general, if you fell into a coma now and woke up in the imagined Ireland in 2050 you would probably figure things out reasonably quickly.
I am inclined to agree with Gerard O’Neill’s view that the book is painting a picture of ireland in 2020 as much as in 2050, with many of the trends being picked up processes that are already underway, though this is not a fatal weakness. The author puts together a set of trends that almost every analyst agrees on as important and knits them into a simple vision that can act as a spark to a wider debate. In doing this however, the book does not delve deeply into potential disruptive events that are being widely discussed across many fields. We do not spend much time thinking about the consequence of a major bio or nuclear strike on the US mainland (see for example Martin Rees Our Final Century). Other major debates, such as the implications of human genetic engineering or increasing human-machine interfaces, are also absent from the story of the book. If I could take up any part of Stephen’s offer of a row, it would be to debate the extent to which such “black swans” should be an integral feature of our planning. In one school of thought, worrying too much about catastrophic events with low predictability that are outside of our control distract us from the very pressing and predictable problems outlined in the book. Take, for example, the number of people who are now worrying about ancient Mayan prophecies on the back of a new blockbuster peddling another apocalypse story. On the other hand, failure to adapt a society to the potential for catastrophic changes or major disruptive technologies is clearly also dangerous in its way. A debate about the types of human values and institutions needed to get a population through a major disruptive event should be a feature of the row that Stephen is trying to start.
I think this book works well as a first gambit designed, as the author suggests, to start a debate rather than conclude one. It represents a sensible view on a very wide range of issues facing Ireland and other countries in the next forty years and I commend the author for getting this debate going. As a lecturer in several broad economics courses in UL and someone continuously and frantically active as a teacher, researcher and commenter, the author is very well placed to moderate a national debate on the long-term future of the country and I look forward to seeing how this concept develops over the next few years. To make decisions clearly about the future, it is important to be able to see clearly the potential outcomes, to identify with things that are not in our immediate surrounding, to divorce ourselves from current pressures to enable rational thought. This book and follow-ups will help with that. Being able to think far ahead has many potential benefits and I hope that Stephen is successful in bedding this concept into political and popular debate.
Posted by jqwnph5 at 04:37 0 comments
Social Dilemmas
This post hopefully opens a thread on “social dilemmas” and I will be posting on this over the next few months. This is just to get some thinking started.
Posted by jqwnph5 at 04:37 0 comments
Behavioural Economics and Taxation
Via Andrew Leigh, the Henry Tax review post a paper on Behavioural Economics and Taxation.
Posted by jqwnph5 at 04:37 0 comments
Social Dilemmas
This post hopefully opens a thread on “social dilemmas” and I will be posting on this over the next few months. This is just to get some thinking started.
Posted by jqwnph5 at 04:37 0 comments
Fiscal Policy Event
From Philip Lane
Reminder: the SSISI event is tomorrow evening, details are here. Contributors: Dr Niamh Hardiman (UCD), Mr Blair Horan (CPSU), Mr Colm McCarthy (UCD) and Mr David Croughan (IBEC).
The paper by Niamh Hardiman is already online here.
Posted by jqwnph5 at 04:37 0 comments
LSE Talks
Some of the recent talks in the LSE series (which is now one of the best web seminar resources for economics worldwide) are really worth following. Includes Esther Duflo, Amartya Sen, Michael Sendel, Steven Levitt and many others
Posted by jqwnph5 at 04:37 0 comments
Shorter working week
Germany has responded to falling demand for labour by shortening the working week. The policy seems to have been a success and is about to be extended.
http://www.rte.ie/business/2009/1125/germany.html
Posted by jqwnph5 at 04:37 0 comments
Measurement Issues in the QHNS and the Live Register
A number of measurement issues related to the QHNS and the Live Register have been noted on this blog before. The QHNS is the official measure of unemploymemt in Ireland and it is based on more economically meaningful (ILO) definitions (compared to the Live Register). However, it needs to be handled with care because anyone working for pay or profit for one hour a week or more is classified as employed.
The Live Register is a more up-to-date source of information than the QHNS, but it is not purposefully designed to measure unemployment. It includes part-time workers (those who work up to three days a week), as well as seasonal and casual workers entitled to Jobseekers Benefit or Allowance. A press release from the Department of Social and Family Affairs (from earlier this month) highlights another measurement issue related to the Live Register:
“the Live Register figures published by the CSO each month includes all claims awaiting decision. Once a claim is registered, it is counted for Live Register purposes regardless of whether the individual is in receipt of Jobseeker's Benefit, Jobseeker's Allowance or awaiting a decision on their claim. This means that the Live Register figure of 423,639 for September 2009, published by the CSO, includes some 14,300 Jobseeker's Benefit claims and 43,900 Jobseeker's Allowance claims which were awaiting decision at the end of September.”
Posted by jqwnph5 at 04:37 0 comments
Shorter working week
Germany has responded to falling demand for labour by shortening the working week. The policy seems to have been a success and is about to be extended.
http://www.rte.ie/business/2009/1125/germany.html
Posted by jqwnph5 at 04:37 0 comments
Fire Gretchen Morgenson
No way does Gretchen Morgenson get to take a victory lap because of the SIGTARP report, which she tries to do today. As the late great Tanta pointed out time and again, Morgenson is “a tendentious writer with only a marginal grasp of her subject matter and what appears to be an insatiable desire to make uncontroversial facts sound sinister.” How she still has a job is an enduring mystery.
This is what Morgenson wrote last September, at the height of the crisis:
A collapse of [AIG] threatened to leave a hole of as much as $20 billion in Goldman's side, several of these people said.
This was unequivocally false, as the SIGTARP report makes clear. The SIGTARP report strains to make a credible argument that Goldman had any exposure to AIG, let alone $20 billion of exposure. In fact, the SIGTARP report doesn’t even succeed in proving that Goldman had any exposure to AIG — it basically just says, based on no evidence or argument of any kind, “Well, it’s technically possible that things could’ve gotten even worse than Goldman’s already-conservative assumptions.” But $20 billion of exposure? Not. Even. Close.
So no, Gretchen, you do not get to take a victory lap. Your September 27, 2008 article was materially false, and breathtakingly irresponsible.
Posted by jqwnph5 at 04:37 0 comments
Measurement Issues in the QHNS and the Live Register
A number of measurement issues related to the QHNS and the Live Register have been noted on this blog before. The QHNS is the official measure of unemploymemt in Ireland and it is based on more economically meaningful (ILO) definitions (compared to the Live Register). However, it needs to be handled with care because anyone working for pay or profit for one hour a week or more is classified as employed.
The Live Register is a more up-to-date source of information than the QHNS, but it is not purposefully designed to measure unemployment. It includes part-time workers (those who work up to three days a week), as well as seasonal and casual workers entitled to Jobseekers Benefit or Allowance. A press release from the Department of Social and Family Affairs (from earlier this month) highlights another measurement issue related to the Live Register:
“the Live Register figures published by the CSO each month includes all claims awaiting decision. Once a claim is registered, it is counted for Live Register purposes regardless of whether the individual is in receipt of Jobseeker's Benefit, Jobseeker's Allowance or awaiting a decision on their claim. This means that the Live Register figure of 423,639 for September 2009, published by the CSO, includes some 14,300 Jobseeker's Benefit claims and 43,900 Jobseeker's Allowance claims which were awaiting decision at the end of September.”
Posted by jqwnph5 at 04:37 0 comments
Minimum wages & obesity
The paper below ties together two important but seemingly disparate topics minimum wages and obesity. The argument is that in the US the federal minimum wage fell between 1968 and 2007 thus making fast food cheaper and this should have lead to more obesity.
They find “… that a $1 decrease in the real minimum wage was associated with a 0.06 increase in BMI. This relationship was significant across gender and income groups and largest among the highest percentiles of the BMI distribution. Real minimum wage decreases can explain 10% of the change in BMI since 1970. We conclude that the declining real minimum wage rates has contributed to the increasing rate of overweight and obesity in the United States.”
The impact of minimum wage rates on body weight in the United States
D Meltzer, Z Chen
http://papers.nber.org/papers/w15485
Posted by jqwnph5 at 04:37 0 comments
Behavioural Economics and Taxation
Via Andrew Leigh, the Henry Tax review post a paper on Behavioural Economics and Taxation.
Posted by jqwnph5 at 04:37 0 comments
Upjohn Institute for Employment Research
11/21/2009Further to the post below, the W.E. Upjohn Institute for Employment Research in Kalamazoo, MI produces lots of useful work on employment, unemployment & related matters.
http://www.upjohninst.org/
Posted by jqwnph5 at 17:46 0 comments
The current crisis in Ireland: will we get a replay?
This paper reports experimental results on how to predict football results, a talent we could have done with recently.
Dijksterhuis A, Bos MW, van der Leij A, & van Baaren RB (2009). Predicting Soccer Matches After Unconscious and Conscious Thought as a Function of Expertise. Psychological science : a journal of the American Psychological Society
http://www.ncbi.nlm.nih.gov/pubmed/19818044
Posted by jqwnph5 at 17:46 0 comments
While we're on the topic...
It should be noted that Wednesday’s match was played in Saint-Denis, France. I admit it is unlikely that Swedish referee Martin Hansson was aware of the social-science literature (for example here and here) indicating that he may be biased in favour of the home team.
In that case it may benefit the man to draw his attention to some research closer to home.
Posted by jqwnph5 at 17:46 0 comments
Connie Voldstad to head ISDA
Per the WSJ:
The International Swaps and Derivatives Association, Inc., the trade group representing the global derivatives markets, appointed Conrad Voldstad as chief executive officer.Mr. Voldstad will replace Robert Pickel effective Nov. 30. Mr. Pickel, who held the position for the past nine years, will take on the new role of Executive Vice-Chairman. He will serve on the association’s board and continue discussions with regulators globally, including the Federal Reserve of New York.
Mr. Voldstad joins ISDA after a tumultuous couple of years in which the derivatives industry came under heavy scrutiny during the financial crisis. Credit derivatives were blamed for exacerbating the crisis and helping cripple the financial system. Some types of credit-default swaps were responsible for the near-failure of American International Group Inc., which needed a massive bailout from the government.
Key on Mr. Voldstad’s agenda will be coordinating global initiatives to manage counterparty risk, and to continue to work on the guts of the derivatives market’s operations – smoothing things to help operations run around the world.
Over the past five years, the group has established standard contracts between counterparties, methods and processes for parties to settle up trades when defaults occur, helping establish a clearinghouse for the industry to better manage the risk any counterparty to a contract may pose to another.
Snagging Connie Voldstad is quite a coup for the ISDA.
Posted by jqwnph5 at 17:46 0 comments
The View from the Ivory Tower
Paul Krugman disagrees with my “legal argument” on the AIG counterparties issue because, according to Krugman, “Wall Street doesn't work like that, and never has.” Oh Paul, won’t you please tell us more about how Wall Street works? Seriously though, I’m flattered that Krugman, who’s practically a hero of mine, actually read my post. Unfortunately, his vast Wall Street experience fails him.
The AIG counterparty negotiations were completely different from the LTCM rescue, because when the banks were negotiating the LTCM rescue, the Fed hadn’t already signaled that it wasn’t willing to let LTCM fail. When the NY Fed was negotiating with the AIG counterparties, it had already bailed AIG out, and had told the entire world that it wasn’t willing to let AIG fail. With LTCM, the Fed could use the threat of bankruptcy to force the banks to agree to a rescue. That simply wasn’t the case with the AIG counterparty negotiations, because the Fed couldn’t credibly commit to putting AIG in bankruptcy. That’s a fundamental, elephant-in-the-room -like difference.
Another huge difference is that the AIG counterparty negotiations weren’t about saving the system from meltdown. They were purely distributional—this was about justice, not the stability of the financial system. In all of Krugman’s examples, the Wall Street firms were better off if they cooperated to save the system. In the AIG situation, there was absolutely no benefit to collective action. None.
Finally, Krugman points to TED’s speech as proof that the NY Fed could have negotiated haircuts. While TED’s speech was admittedly inspiring, and had me reaching for my checkbook, there’s one glaring problem: the speech was predicated on the NY Fed having the support of the French regulators, which, as the SIGTARP report makes clear, was not the case. From the SIGTARP report:
The Commission Bancaire spoke again with FRBNY and forcefully asserted that, under French law, absent an AIG bankruptcy, [SocGen and Calyon] could not voluntarily agree to less than par value for the underlying securities in exchange for terminating the swap contracts.
SocGen and Calyon, by the way, held over a third of the $62bn CDS book that AIG was trying to terminate. With SocGen and Calyon explicitly prohibited from agreeing to haircuts, the NY Fed’s negotiations were DOA.
Posted by jqwnph5 at 17:46 0 comments
The current crisis in Ireland: will we get a replay?
This paper reports experimental results on how to predict football results, a talent we could have done with recently.
Dijksterhuis A, Bos MW, van der Leij A, & van Baaren RB (2009). Predicting Soccer Matches After Unconscious and Conscious Thought as a Function of Expertise. Psychological science : a journal of the American Psychological Society
http://www.ncbi.nlm.nih.gov/pubmed/19818044
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A Message From Thierry
Hello, Irish Behavioural Economics Blog. I am doubtful that your PhD students will finish their theses on time and I laugh at their prospects of publishing in good journals. Ha ha ha!
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The Technology Safety Net
We’re constantly told that the SmartEconomy is the key to getting Ireland out of the doldrums. I generally agree with the idea, but not with the bulk of the documents associated with it. The facts about the smart economy, innovation and technology in Ireland would suggest that we have a long way to go to realise progression. For one, we have a relatively low level of broadband penetration in Ireland. The most recent figures show that about 58% of Irish households have access. The debate about the government doing more to help with the roll out is well advanced but to little avail in terms of action or policies. No doubt much progress is required on the demand side but the part of the ‘build it they will come’ nonchalance that is conveniently overlooked is the issue of price (As i recall that event was free). It’s generally agreed that more needs to be done on broadband at this level.
Related to this is the issue of dissemination is household technology. CSO figures tell us that about 35% of households in the country don’t have a computer! Imagine. With computing technology experiencing huge reductions in price it might be worth considering the feasibility of a tax-initiative to bolster demand among these households. If we can do a ‘bikes to work’ scheme then why not a ‘computers to learn, connect, search, explore, find’ scheme. The bike idea is capped at 1,000 euro (aside: surprising how many 800 euro imported bikes are being bought at the moment, given recessionary times!) and offered over five years, as i understand. It is available at both the higher and lower tax bands. The computer scheme might be targeted best at the lower band. Understandably, tax expenditures are not the flavour of the month but one has to wonder… if we’re serious about the SmartEconomy and technology/information lead recovery then we need to be proactive and have national policy guide the way in practical ways. I don’t think we need to read about the benefits of having a computer with internet access but it might be worth considering some for a moment – information, training, education, job-search, social connection. Even a basic-user level it’s utility is clear and potential enormous. I think in any CBA it would look quite good against tax relief on a car scrappage scheme, to mention one wonderful idea thats out there at the moment.
I’d like to hear your thoughts on this, good, bad, or indifferent.
Finally, to declare a particular interest, one associated benefit that you may not be thinking of is the ability to participate in National Household Panel Surveys which are the backbone of statistics gathering in the 20 most developed countries internationally. Or should I say 21. Go Geary, go!
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Economists for Cancelling Christmas
The papers on the deadweight loss of christmas are very well known including featuring on the odd december blog post. Now you can read the book!
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CSO Releases
Thanks to Michael E. and others for pointing out a number of important CSO releases including the Statistical Year Book for 2009 and the results of the 2008 SILC survey. The major changes in construction, prices and employment mark the Year Book out as a historic document though the figures refer to 2008 mostly so do not encapsulate the stark collapses witnessed throughout this year. Even so, ample proof that we are living in interesting times.
Posted by jqwnph5 at 17:46 0 comments
A Message From Thierry
Hello, Irish Behavioural Economics Blog. I am doubtful that your PhD students will finish their theses on time and I laugh at their prospects of publishing in good journals. Ha ha ha!
Posted by jqwnph5 at 17:46 0 comments
Upjohn Institute for Employment Research
Further to the post below, the W.E. Upjohn Institute for Employment Research in Kalamazoo, MI produces lots of useful work on employment, unemployment & related matters.
http://www.upjohninst.org/
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Academic Etiquette
Via Gary King’s page, this guide to academic etiquette from the Chronicle of Higher Education has some gems
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1998 vs. 2009
A few weeks ago James Kwak noted that Goldman had only $270 billion of assets in 1998, and asked, half-rhetorically, whether that was big enough, since Goldman was “probably doing a perfectly good job of serving their clients at the time.” I thought the answer to this question was obvious, but I guess it’s not, since this meme has apparently persisted.
The answer, of course, is that capital markets have exploded upwards since 1998. The international bond markets rose 157%, from $32.5 trillion in 1998 to $83.5 trillion in 2008; bond issuance rose 272%, from $654 billion in 1998 to $2.4 trillion in 2008; etc., etc. I don’t have a lot of time, but I think these charts drive home my point.
Asking whether banks, which serve as market-makers in capital markets products, need to be bigger than Goldman was in 1998 frames the issue exactly wrong. The issue isn’t how big market-makers need to be in order to provide adequate liquidity to the capital markets of 1998. The issue is how big market-makers need to be in order to provide adequate liquidity to the capital markets of 2009 (and beyond).
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