The French Differential

As I keep indicating the French economy – although not a spectacular success – continues to outperform the German one. This is interesting, since the French political system has been much more laggard than the German one in implementing reforms. That is why I place emphasis on the demographic differential.
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On Un-Common Ground

Now just remember, you read about it first on Afoe. Bertrand Benoit and David Pilling have an excellent article in the FT today:

Question: Which of the world’s biggest economies is holding an early election this month dominated by debate over radical economic reforms?

Two clues: The economy, long in the doldrums, is showing signs of life, thanks to improving exports and a restructured private sector. An ageing population is making structural reform an urgent priority.

The answer: Not one, but two countries – Japan and Germany.

Just my point in my earlier post, and the more this connection is recognised the sooner we’ll enter the zone of framing meaningful solutions. As the FT writers suggest, there are many intriguing parallels between next Sunday’s Japanese election and the German ballot one week later.
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No Answers Only Questions

One person who could rightly claim to know more about global ageing and its possible consequences than anyone else in the business is the German Director of the Manheim Research Institute for the Economics of Ageing Axel B?rsch-Supan. If there’s a conference being organised, he seems to be there. Actually his comments at both these meet-ups are well worth reading in and of themselves (here, and here).

In a sense B?rsch-Supan is almost uniquely qualified to express opinions on the topic since he has both devoted a large part of his professional career to studying the question, and he lives and works in a society which is already reeling under the impact. As he says:

“Today?s Germany has essentially the demographic structure that the United States will reach in a quarter of a century. The dependency ratio (the ratio of persons aged 65 and over to those aged from 20 to 59) is at 28 percent, and it will reach 75 percent in 2075, if we dare project that far. Almost one-fifth of the German population today are aged 65 and over. One quarter are aged 60 and over, which is relevant because the average retirement age in Germany is 59.5 years. Thus, in this sense the United States is not ?entering largely uncharted territory,? …. Rather, they can look to Europe?in particular to Germany and Italy?to see what will happen in the United States.”

I mention B?rsch-Supan because he serves as a good pretext for going over where we are to date with the issue. As he says himself. watching demography change is rather like watching a glacier melt, on a day-to-day basis it’s hard to see that anything is happening, but over time the impact is important.

One of his recent papers has the intriguing title: “Global Ageing: Issues, Answers, More Questions“. It is a good up-to-date review of the ‘state of the art’, and a quick examination of the points he makes probably serves as a good starting point, since I can’t help thinking, in the case of global ageing, it isn’t so much what we know that matters, it’s what we don’t know.

So here we go, a review of what we “know”, what we think we know, and what we don’t know:
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Dutch referendum: some background

Having been asked by AFOE to write a couple of posts for them in the coming weeks I am both honoured and horrified and apologize in advance for occasionally butchering the English language. A very short introduction: I am a Dutch translator now living in France after 30 odd years of residence in Belgium. I am totally incapable of producing fine scholarly essays but I can do my part of the vox populi pretty well? I hope.

To warm up I offer you some background relevant to the Dutch referendum before the official results start rolling in. First some figures, taken from a Eurostat news report (pdf) that was released today.

Dutch unemployment, while remaining well below the European average of 8,9%, has risen from 4.6% to 5%. By comparison, Poland has 17% unemployment and Ireland 4.2%. Eurostat also mentions that The Netherlands registered the highest relative increase in unemployment rates among the member states together with Portugal (6.5% to 7.2%) and Luxemburg (4.2% to 4.6%). Unemployment among young people in The Netherlands, while fairly high at 9.2%, is still modest compared to the EU average rate of 19%.
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The Torygraph Comes Through, or

The Return of the ?berpimp?

In things German, I usually check the Daily Telegraph several times before believing what they write, much less quoting them. But this story falls into a particular category, known in journalistic jargon as “too good to check.” (Thanks, Atrios.)

Update: I think this is fiction, or at the very least “sexed up.” That hasn’t stopped the discussion from spreading. See notes at the end of the posting.
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The Price of Obesity

Economist for Dean Lerxst gets hold of something really interesting in a post yesterday ( which Calpundit also picks up on). He draws our attention to the fact that some US economists have recently been arguing that there has been a significant rise in individuals claiming disability benefits and this has taken a large number of workers out of the labor force, thus – at a stroke – reducing the “official unemployment rate”. The research by Mark Duggan and David Autor is discussed in a NYT op ed by University of Chicago Professor Austan Goolsbee.

Lerxst also highlights the significant role obesity may play in this. He cites an article in Friday’s Wall Street Journal describing a new study by RAND Health economists showing that obesity may actually be the “primary” explanation for the rise in the disability rolls. According to Dana P. Goldman, director of health economics at Rand and the principal investigator on the study cited in the WSJ there is “evidence to support (the idea) that obesity may be a primary reason.”
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