End December Links

# New national infrastructure plan – old North/South divide including Garden bridges to nowhere

# In Two observations on the Autumn Statement, Simon Wren-Lewis points out that the OBR’s accompanying forecast notes that government plans imply that “government consumption of goods and services falls from 23.2 per cent of nominal GDP in 2009 to 16.1 per cent by the end of the forecast period, its lowest on record in data back to 1948.” Even if the electorate had expressed a preference for exceptionally low levels of public services (and I don't think, despite the Tory's being elected as the largest party in 2010, that this was the preference expressed), you would not choose a period in which we were flirting with depression to make this adjustment. Ridiculously pro-cyclical fiscal policy.

# Interfluidity is great. He makes another fantastic point in Standards of evidence: we don't know what the unconditional expectation is of the impact of tax rises or reductions in equality (or for that matter, of the imposition of borders); but that doesn't stop those whose main policy objective is low taxes arguing that taxes are bad for growth. Why then are those whose main objective is the reduction in inequality so coy about claiming that inequality is bad for growth? There are plenty of models in which the conditional (ie. all other things equal) impact of unequal income distribution is bad for growth...

# Big banks versus small banks: size doesn't matter: "interconnectedness, not size, [is] principle cause of systemic risk". This sounds right to me, but I think sharing a company so that you are one big bank is likely to be an 'interconnectedness enabling technology', so average size of banks and degree of overall interconnectedness in the sector is likely to be correlated.

# Interesting stats: Storify: Regional GVA stats & Mapping the recovery

# If negative interest rates are a tax then positive interest rates are a subsidy from the future

# Much is talked about Scotland taking a share of the UK debt, but much less is said about the asset side. Supposedly they are similar values: Independence will generate a £109,000,000,000 asset windfall for Scotland via Debt equals assets. I need to dig into this.

# Great column from the KrugTron, Bits and Barbarism: "Money, [Adam Smith] understood, was a way to facilitate commerce, not a source of national prosperity — and paper money, he argued, allowed commerce to proceed without tying up much of a nation’s wealth in a “dead stock” of silver and gold. So why are we tearing up the highlands of Papua New Guinea to add to our dead stock of gold and, even more bizarrely, running powerful computers 24/7 to add [bitcoins] to a dead stock of digits?" Charlie Stross on this too: Why I want Bitcoin to die in a fire