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Category Archives: Economics and demography
Global Manufacturing Slips Back Slightly In March
Evidence which would enable us to assess the full economic impact of the Japanese earthquake and tsunami is still hard to come by. There is a lot of talk of supply chain disruptions, but little in the way of detailed evidence to back up assertions of the more anecdotal kind. Even the latest set of manufacturing PMI data has decidedly left the jury out on the topic.
Surely There Is Nothing “Funny” About What Is Going On In Japan?
As Japanese officials continue to toil away in what we all hope will be a successful bid to avert a worst case scenario nuclear meltdown even while thousands of Japanese still remain missing and unaccounted for, financial market participants across the globe have been struggling with themselves to answer one and the same question: just how serious are the economic consequences of all this devastation likely to be? Continue reading
Pre-dropped
Kevin Drum makes the mistake of reading McArdle and writes “I have to admit that ‘gigantic earthquake in Japan’ was not on my list of possible flash points for the global economy. And in the end, I don’t think it will be.”
It certainly shouldn’t be, if only because Tokyo Earthquake is probably the most widely used wildcard in any sort of future/scenario planning. Sure, it was a low-probability event at any given time, but over longer terms it had a non-trivial likelihood of coming to pass. From financial markets to supply-chain managers, they all should have a file at hand marked Tokyo Earthquake, and the work — for people far away — now involves dealing with how reality diverges from what was planned. Maybe some international actors will be exposed as having neglected to answer this most obvious of what-ifs, but most will have worked through the possibilities.
A Rare Thos. Friedman Moment
So I was listening to a taxi driver yesterday and this morning, about other taxi drivers. People with cars complain about the traffic in Tbilisi, but it’s not nearly as bad as it could be. For the capital of a medium-income country, a capital that moreover accounts for upwards of two-thirds of the country’s economic activity, getting across town doesn’t take as much time as one would think. A vigorous campaign of minor physical improvements over the last year has also partly curbed some of the bad habits that used to cause bigger backups. Better infrastructure and easy availability of alternatives make for fewer cars on the roads.
Public transport isn’t bad, but the key components of transport in Tbilisi are the shared taxis, known locally as marshrutki. Continue reading
Updated: Reminder: Edward at the LSE tonight
For everyone of you, gentle readers, who’s in London tonight – Edward will be speaking about “How Life In The Internet Changes The Practice Of Macroeconomics” at the LSE tonight. Here’s the details from the LSE website. If there’s a video of the talk, I’ll add it here, once it’s published.
Date: Monday 14 February 2011
Time: 6.30-8.15pm
Venue: Sheikh Zayed Theatre, New Academic Building
Speaker: Edward Hugh
Chair: Professor Luis Garicano
Update: And here’s the video of Edward’s talk.
How The Internet Changes The Practice Of Macroeconomics
I have been invited to give a lecture at the LSE next Monday (14 February) about how new sources of information, and access to multiple points of view, affect how we carry out the practice of macroeconomic analysis. It is an open – first-come-first-served – lecture, and all are welcome.
Among the obvious topics I will deal with, like access to information and the role of social networks, I will also be looking into that tricky little issue of why it is so much mainstream academic theoretical output would seem to have contributed so little to our understanding of the present global crisis. Many practitioners of economics neither saw the problem coming, nor have a coherent strategy for finding ways of getting out of it.
In order to “frame” this discussion I will take as my starting point the issues raised in Ricardo Caballero’s recent paper in the Journal of Economic Perspectives: Macroeconomics after the Crisis: Time to Deal with the Pretense-of-Knowledge Syndrome (User friendly downloadable copy here)
Interestingly, the lecture will be chaired by Luis Garicano, who was the man to whom the Queen of England put the awkward and now famous question as to why so few economists actually saw it all coming.
Since I actually studied economics at the LSE, many, many years ago, this event is a kind of homecoming on the personal level.
One Step Forward in the Euro Zone?
It would have been hard to believe only a few weeks ago that the euro zone could be the source of any good news let alone news to help push the market forward. Yet, with last week’s successful bond auctions and the pledge of international superpowers such as Japan and China to buy Euro zone debt and the ECB’s sudden more hawkish tones, the obvious question is; are we out the woods yet? Continue reading
And Then There Were Seventeen….
“If you know your Thucydides and the Melian dialogue you know that small countries rely most on everyone following the rules. That’s why we follow the rules. If there are no rules, then the big will do what they want,”
Estonian President Toomas Ilves in an interview with the EU observer
In a blog post which has gathered a certain notoriety, Paul Krugman recently sent the Estonians his condolences. I will send them, not my condolences, but my congratulations, and these not for the somewhat dubious honour of being allowed to join the Eurozone, or even for having carried out a highly successful “internal devaluation” (this outcome is still in doubt), but rather for their stubborness, courage and tenacity. These are indeed hard (and enduring) men and women. And in honour of their courage I offer them a homage, in the form of two charts. The first of these is the latest Estonian industrial production one.
While the second is the Spanish equivalent.
Turkey’s Audacious Experiment In “Post Modern” Monetary Policy
The recent decision of the Turkish Central Bank to lower rather than to raise interest rates in an risky attempt to quench the inflation flames that many feel are threatening to engulf what some call an “overheating” economy (or here) has lead to a good deal of heart-searching and consternation in the economic and financial press of late. After all, at the end of the day aren’t they doing exactly the opposite of what the text book says they should? Well, as is usual in the realm of the dismal science, all is not exactly what it seems to be. Continue reading