End August Links

# Simon Wren-Lewis and Paul Krugman describe the objectivity of analysis produced by the civil service in assessing Gordon Brown's 5 tests for joining the Euro. I think it's fair to say that the positions taken by civil servants in producing the Scotland Analysis series for the UK Government and the various Scottish Government papers have been much less impartial.

# Noah Smith thinking in thought experiments: Does private sector net saving necessitate government net borrowing? A trivial example, but this is the way thinking should be done.

# Why savers can't have nice things: it's all about time travel; Why @saveoursavers are doomed, & Depressions are bad for debtors and creditors, and workers and bosses

# Another North/South divide in the UK

# John Kay's speech at Glasgow University transcript: "Here we come up against one of the most serious problems of Scottish business, the drain of Scottish business and Scottish headquarters out of Scotland over 20, 30, 40 years. How much of that is due to Scotland’s membership of the United Kingdom and how much would have happened anyway in a world in which London is a major financial and business centre is an open question. But certainly, Scotland has not been able to adopt policies of retaining corporate headquarters within its boundaries in ways that it might have been able to do as an independent country." An important question about how constitutional set-up can influence economic outcomes.

# Great comment from Simon Wren-Lewis on Tory macroeconomic policy: The wrong sort of recovery

# This needs to be expanded upon: I have sympathy with the view that this might be true, but I need a theory for why it's true; simply stating it is not enough. "Scotland is a surprisingly elitist society where a relatively small number of people own land, run businesses, own wealth, stand for election and run government. The result is a deep-seated belief that ordinary Scots cannot own and run things, don’t want to own and run things and indeed that it hardly matters who does. It matters. It matters so much that talented folk still leave Scotland instead of pushing for fundamental change. Well-intentioned public servants scour the universe for an explanation of the Scottish Effect (where Scots health is consistently worse than English counterparts in areas with similar levels of deprivation). Perhaps the answer is simple. Perhaps the sheer stultifying burden of disempowerment has finally caught up with us all." This is important not just for Scottish Independence and the referendum, it also has strong message for the economics of inequality: inequality is usually deemed to be bad because the poor have a higher marginal utility of consumption (this reason has also been augmented with newer theories with utility over status or rank). But the quote also hints at negative impacts upon human capital development i.e. supply side impacts of inequality; and how inequality impacts upon self-identity which has knock-on impacts on supply ("we cannae dae it", where "we" means Scots).

# Krugman's 'Banks and the monetary base' made sense to me; but then so did Interfluidity's 'Banks and macroeconomic models'; and even Steve Keen's 'The reductionism stops here'. And they can't all be right...

# Self publicity!

# For future reference: Final version of Tyler Cowan's International Trade class reading list