Alcohol Consumption Pro-Cyclical?

Thanks mainly to indirect encouragement from commenter Teme, I am continuing to plough the Finland furrow. Today I found this very interesting piece of research:


This paper explores the connection between alcohol mortality, drinking behaviour and macroeconomic fluctuations in Finland by using both aggregate and micro-level data during the past few decades. The results from the aggregate data reveal that an improvement in regional economic conditions measured by the employment-to-population rate produces a decrease in alcohol mortality. However, the great slump of the early 1990s is an exception to this pattern. During that particular episode, alcohol mortality did indeed decline, as there was an unprecedented collapse in economic activity.
The results from the micro-data show that an increase in the employment-to-population rate and expansion in regional GDP produces an increase in alcohol consumption while having no effect on the probability of being a drinker. All in all, the Finnish evidence presented does not overwhelmingly support the conclusions reported for the USA, according to which temporary economic slowdowns are good for health. In contrast, at least alcohol mortality seems to increase in those bad times that are not exceptional economic crises like the one experienced in the early 1990s. However, there is evidence that alcohol consumption is strongly procyclical by its nature. This suggests that alcohol consumption and mortality may be delinked in the short-run business cycle context.

KEY WORDS: alcohol mortality, drinking, business cycles

More Bigtime Divergence

As people may have noted, last weekend Tobias and I were in Stockholm. One of the topics I wanted to post on but couldn’t was the latest Human Development report from the UN. There was plenty of press coverage: here, here, and here

There was even coverage in the blogs, but the tone seemed to be set by Slugger O’Toole who seemed mainly to take issue with Ireland’s rating in the HDI.

Personally I think the issues involved are much bigger than this.
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Unified Growth Theory

According to Oded Galor it has become evident that in the absence of a unified growth theory that is consistent with the entire process of development, the understanding of the contemporary growth process would be limited and distorted. He quote Copernicus to the effect that:

?It is as though an artist were to gather the hands, feet, head and other members for his images from diverse models, each part perfectly drawn, but not related to a single body, and since they in no way match each other, the result would be monster rather than man.?
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