Mack

Over at Cafe Hayek they’ve been exploring a question they feel would make an excellent question for a final economics exam. Prompted by another bloggers experience of working in the peace corps in Nepal, the question is – Why does a spectacularly intelligent and resourceful person in Nepal earn spectacularly less than a lazy untalented American?Robert Frank – the author that prompted the question gave this answer Well-paid Americans owe an enormous, if rarely acknowledged, debt to the social investments …

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Newsweek carried an interview with economist Nouriel Roubini, who predicted the current crisis and it’s scale back in 2006, in it he answers the question “are you still Dr. Doom?”. No, I am not Dr. Doom. I am Dr. Realist. I don’t believe we are going to end up in a near depression. Six months ago I was more worried about an L-shaped near depression. Today, after the very aggressive policy actions taken by the U.S. and other countries, the …

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The Irish Times are reporting that ex-Libertas director, and sometime Slugger commenter Naoise Nunn is backing a yes vote in the coming Lisbon referendum re-run. “The circumstances have changed: internationally, economically, financially and domestically. “We don’t have the luxury of doing anything else. I am glad that we had a referendum. We were the only member state to do so, to have a proper debate, or something like a proper debate,” Mr Nunn told The Irish Times . Adds : …

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Hat tip irisheconomy.ie MackNo bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley . Crisis Economics: A Crash Course in the Future of Finance -Nouriel Roubini, Stephen Mihm

Constantin Gurdgiev tackles the annual subvention over at True Economics. you have to skip past the first section on yesterdays UK budget first. Apparently, the productive regions of the country contribute an average 2,000 per person to the subsidy receiving regions. Constantin argues these subsidies are bad economics Put in real terms, this means that few productive parts of the country are subsidising numerous less productive ones. Is this a good thing? Well, no. First, such subsidies distort returns to …

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Simon Johnson, ex-chief economist at the IMF, lays bare some home truths about financial crises over at The Atlantic. He’s writing about the USA but lessons could certainly be learnt closer to home. The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and …

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So yesterday, Paul Krugman told us his worst case scenario for the world economy is that the USA ‘could turn Irish’. That is the USA could find itself in a position where it was unable to administer a neo-Keynesian counter-fiscal stimulus . Unsurprisingly as Paul Krugman is probably neo-Keynesianisms’ leading light. For the record, what he did not say was that Ireland had the world’s worst outlook. He has been busy on the topic of Ireland on his blog Shabby …

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There is an interesting debate between Austrian Economist Mario Rizzo, and Neo-Keynesian Brad De Long over at Think Markets on the nature of fiscal stimuli. In particular they differ on the impact of public and private spending, with Mario Rizzo regarding the former as a destructive force building up problems for the future and De Long as a necessary evil to prevent massive unemployment today. Economists and financial commentators from both schools have a good track record of critiquing the …

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RTE report that Fredrik Neij, Gottfrid Svartholm Warg, Peter Sunde and Carl Lundstroem have been sentenced to a year in prison for promoting copyright infringement. A huge win for the film, music and video games industry in their fight against copyright infringement, and somewhat unexpected as the dependents seemed convinced that their activities were legal under Swedish law. MackNo bio, some books worth reading – The Rational Optimist: How Prosperity Evolves – Matt Ridley . Crisis Economics: A Crash Course …

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We’ve all heard the jokes – six months and an ‘r’, Reykjavik-on-the-Thames etc.

A recent Paul Krugman blog invoked Keynes theory of the Marginal Propensity to Consume, and the metaphor of government burying wads of cash in bottles deep in America’s coal mines, in order to stimulate economic activity, when gently criticising Obama for coming in under-budget thus far in his stimulus plan’s projects. This provoked a strongly worded attack by Mish ShedlockFrom Mish’s blog – In reality, the mine digging proposal is nothing more than another variation on the idea of paying …

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Apparently Ireland imports far more than it exports from the UK i.e. it runs a balance of payments deficit with the UK. A commenter (Yoganmahew, a longstanding contributor on financial matters to both thepropertypin.com and askaboutmoney.com), highlighted this interesting fact over on Constantin Gurdgiev’s blog. He was discussing Ambrose Evans-Pritchard’s debt deflation article on the state of the Irish economy, discussed on Slugger here. In the same article Constantin, in a rebuttal of the Eurosceptic line taken by Ambrose, highlights …

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On another thread some concerns were raised about Gaelscoileanna in Northern Ireland along with a slightly erroneous comparison with the south. Some people may be under the impression that Gaelic-medium education is unique to Northern Ireland. This is not the case, across the island there are 298 Gaelscoileanna at primary level and 72 schools at post-primary level educating 50,000 pupils (from wikipedia). While this epochtimes article suggests lower figures being educated through Irish in the south, they still show a …

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Peter Sutherland, the Irish chairman of BP and Goldman Sachs International, accentuates the positive in the Financial Times. He highlights some issues we’ve mentioned here previously, such as Ireland’s flexible labour market that is in the process of boosting Ireland’s international competitiveness, and the improvements in Ireland’s balance of trade. While I do not want to trivialise the difficulties that Ireland faces, its problems are acute in nature rather than chronic. Once Ireland overcomes this short-term panic – and I …

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Tech investor and entreprenuer is Paul Graham is proposing a Visa program (in the US) to attract tech entrepreneurs and fuel the next wave of tech innovation and job creation. An idea, virtually free to implement, that could be replicated on this side of the Atlantic also? Letting just 10,000 startup founders into the country each year could have a visible effect on the economy. If we assume 4 people per startup, which is probably an overestimate, that’s 2500 new …

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Nassim Nicholas Taleb detailed 10 principles for a Black Swan World in the Financial Times earlier this week. At the core of this crises was the ability of a privileged few to take huge risks with other people’s money. Safe in the knowledge that while they could keep any profits they made, others would bear the brunt of any losses. The size of the risks they took made them too big to fail. In Ireland, the National Assets Management Agency …

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Constantin Gurdgiev, adjunct lecturer in finance at Trinity College Dublin and ex-editor of Business & Finance Magazine is scathing on yesterdays budget. Once again he argues the government’s forecasts are too rosy and that the exchequer will fail to hit deficit targets – he predicts a deficit for 2009 of between 12 and 13%. Yesterdays budget attempted to bridge the ballooning deficit by increasing taxes rather than spending cuts. Constantin predicts that one side-effect of this will be to send …

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Irish and American banks took huge risks with their clients money. For slightly different reasons they are all now pretty much insolvent, and require external agencies to make good their huge losses. Unfortunately, those ‘external agencies’ look like being me and you! In effect Irish taxpayers, many already losers of the great Irish property bubble boom and bust, are now being asked to purchase the bad assets owned by Irish banks at current market values – which are well above …

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Brian Lenihan reported as stating “The ECB stands behind the Irish banking system and ensures the stability of the Irish banking system” in the Indo. Unless he’s doing a solo run, if the bank guarantee submerges the state financially it’ll be the European’s and not the IMF riding to the rescue (see comments on this thread). Meanwhile, hot on the heels of their recently failed bond auction a British Cabinet Minister states that there is no shame in Britain asking …

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