It’s a flat world after all

In case you missed it, last year UCLA’s Ed Leamer did an excellent critique of Thomas Friedman’s The World is Flat. He plays cat and mouse with Friedman’s use of the term “flat”, offering up a review of economic theory and empirical evidence related to the theme, while making some pretty funny jokes at Friedman’s expense. The full pdf, which […]

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What does “the good economy” look like?

The UK’s Compass Institute, loosely tied to the Labour Party, has issued its second of three big picture think pieces. The first, The Good Society, was highlighted on RPE last Fall. The second is called A New Political Economy. It is a thick document full of good ideas, most of which are relevant beyond the UK. From the introduction, The […]

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Akerlof’s AEA lecture

In his presidential address to the American Economics Association, Nobel laureate George Akerlof points to a new agenda for macroeconomics, rooted in more realistic assumptions about human behaviour. Below is the abstract and introduction. The full paper is here. Economist’s View’s coverage also includes a New York Times article that interviews Akerlof about his views (here). The Missing Motivation in […]

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More on the Conference Board and TILMA

Ellen Gould has noted that the Conference Board’s report projects gains for industries that are explicitly exempted from TILMA: utilities, energy, mining, forestry, and fishing. The Conference Board’s analysis was based on a “draft negotiators’ text” (see page 39). However, the actual agreement wholly or partly exempts the industries listed above (see pages 19-20 and 22). These exempt industries could conceivably still benefit from lower […]

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TILMA’s Bogus Logic

The Conference Board estimates that TILMA will add $4.8 billion to British Columbia’s economy. Even if one accepts the Conference Board’s assumptions, this figure should be $2.4 billion (as explained below). However, some of these assumptions are highly questionable. The Conference Board argues, “The commercial services and wholesale and retail trade industries will benefit from [TILMA]. Increased trade liberalization will […]

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TILMA’s Bogus Math

The Government of British Columbia has finally released the Conference Board study projecting that TILMA will add $4.8 billion to the provincial economy. Seeing the study’s methodology (or lack thereof) makes this projection seem even sillier than Marc and I had suggested. The Conference Board “scored” eleven industries in seven regions on the following arbitrary scale of TILMA’s speculated impact […]

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For whom the Nobel tolls

The 2006 Nobel Prize in Economics goes to Edmund Phelps. (Technically, this is the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, because Nobel did not actually endow a prize in economics back in 1901; the economics prize was added in 1968.) The essay accompanying the prize can be found here. Below I’ve pasted two differing econo-blog […]

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Homo sapiens vs homo economicus

“We are not acquisitive automatons conditioned always to follow narrow self-interest.” So says the UK’s The Times in an article on “neuro-economics”, a sub-field of economics that bridges psychology and neurology in an attempt to understand human behaviour. Alas, rather than an empirical approach to human behaviour, the economics profession has been willing to make the huge assumption about human […]

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Interesting UK Progressive Think Tank

http://www.compassonline.org.uk/publications/good_society/good_society.pdf Compass has just published the first of three short books in an attempt to redefine the social democratic project in the UK. Highly critical of New Labour but strongly influenced by Scandinavian social democracy, Compass is advancing themes and policies which will resonate on the progressive left in Canada – a relentless focus on equalizing the life-chances of all […]

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We’re Number Sixteen!

For as long as I can remember, the Canadian government has been obsessed with “competitiveness.” It is part of the lexicon of government-speak, despite the fact that unlike productivity there is no established measure of “competitiveness”. So the term is more of a values statement than anything else. To address this shortcoming, the World Economic Forum created an index of […]

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Unspinning the Swedish elections

OK, so the glee of the right regarding the loss of the Socialists in the Swedish elections on Sunday was getting to me. Even though the new government, The Moderates, won by a squeaker, the end of the Swedish model has been triumphantly splashed across the world’s business pages. But as Peter Lindert has pointed out, the end of the […]

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Sweden and the Future of Social Democracy

This week’s Economist magazine celebrates in advance the widely expected defeat of the Swedish social democrats in imminent national elections. Actually, a close reading of the data in the piece underlines the fact that Sweden’s economic performance has been well above average over the past decade, precisely the period in which one would have expected competitive downward pressures from the […]

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Shaking the Invisible Hand

Browsing at a used book store in Vancouver, I picked up some classics on the cheap. Someone must have dumped their economics books, thinking them passe. I’m keen to revisit those classics – the more I learn, the more I get out of them. So I got a 1964 edition of Keynes’s General Theory of Employment, Interest and Money, Robert […]

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Fear of Sharing

All of this equalization talk has Preston Manning worried. While Alberta Premier Ralph Klein would have just told the rest of us to keep our grubby hands off Alberta’s wealth, Manning and his co-author Fred Kerr take 1200 words to explain to us that Alberta is already sharing as much as it can. Let’s take a walk though their oped […]

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Debunking labour market “rigidities”

Neoclassical economics, when looking at the labour market, plots its supply and demand curves, with all of their loaded and unrealistic assumptions, and finds an equilibrium wage and employment. Then it finds that anything added on to this simplistic and flawed model – taxation, unions, minimum wages – perturbs that equilibrium. Therefore those things must be bad! A new paper […]

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Luck, ability and income tax policy

A old NY Times column by economist Hal Varian, recussitated by Brad DeLong: … Those who argue for a more progressive income tax emphasize equity: a tax dollar paid by a rich person causes less pain than a tax dollar paid by a poor person. Those who argue for a less progressive system emphasize efficiency: the most productive people should […]

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The Economist takes on CGE modelling

When I was doing research on the idea of a Canada-US customs union, I came across a study (a PhD dissertation, actually) that was cited by proponents, claiming huge gains from a customs union. I looked into the methodology and found some serious shortcomings. CGE, or Computable General Equilibrium, models are a quasi-empirical approach that puts numbers to experiments, such […]

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