End June Links

# Secular Stagnation As Wising Up

# Government borrowing and long-term interest rates: a natural experiment

# Bitcoin isn’t the future of money — it’s either a Ponzi scheme or a pyramid scheme

# What Assumptions Matter for Growth Theory? is the best summary of the "Mathiness" discussion in econ blogs

# Glick & Rose The currency union effect on trade: Redux: it used to be estimated and presumed that currency union had a strong effect on trade, but recent empirical work has found much weaker effects. Basically the data hint that there are positive effects, but the size of any such effect is a strong function of the econometric technique used, and so we cannot say with any confidence that there is much of an effect on trade from CU.

# 2 pieces of great news from the Netherlands:
   - Dutch court’s climate ruling may force other states to cut emissions – or else
   - Dutch city of Utrecht to experiment in citizen’s income

# Not such good news on the effectiveness of energy efficiency when done in reality rather than under ideal conditions: A new study looks at federal energy-efficiency efforts — and the results are grim

# Andrew ZP Smith asks, among other things, if wind energy is actually subsidised: "The chief assistance for onshore windfarm operators comes in the form of top-up payments from bill-payers, above what the operators receive from selling their electricity in the wholesale markets. ... An electricity grid tends to rank different generators in order of marginal cost, prioritising the cheapest forms of generation. ... Cheap electricity is brought online first, and the plants with the highest marginal generation cost are saved till last. ... Wind is never the most expensive fuel on the grid, because its fuel is free. The cost of wind power is almost entirely in construction; marginal generation cost is next to nothing. Therefore when the wind blows and power is generated, it knocks out the most expensive generator (and whether that’s coal or gas, depends on their relative prices, the carbon price, and the relative efficiency of the generators) and it lowers prices across the whole market. Previous research in Germany and Spain has found that these cost reductions outweigh the revenue support paid to wind. Wind is not subsidised in those two countries – indeed, quite the reverse, wind lowers total costs for consumers."

# Evidence on the costs of Brexit? Campos, Coricelli, & Moretti conduct econometric exercises on Norway (which was able to join the EU in 1994, but chose not to) and the other 1994 candidate countries (who did join) Sweden, Finland and Austria. They find that the decision not to join the EU has reduced Norway's productivity by 6%.

# It's not often Celtic and Scottish football get a mention on VoxEU! Dominance in football: An application of Sutton’s theory of endogenous sunk costs

# People often say that lefties support Keynesian demand management because they support big government. Nick Rowe makes a good point that this doesn't make sense: "My beliefs about the optimal size of government don't matter for my beliefs about fiscal policy. My belief that the size of government matters and that there is an (interior*) optimum does matter for my beliefs about fiscal policy. It's why I'm against it." i.e. belief in big government should bias you against Keynesian demand management (all else equal).

# This Diane Coyle post is a bit rambling, but the maps are cool, there are some links that I should go back to, and it ends with a point that I entirely agree with about CBA for transport projects: "standard cost-benefit analysis does not do a good job when it comes to big infrastructure projects ... because it is a tool for assessing marginal changes, not ones which might involve large non-linearities – behaviour changes or network effects. ... it isn’t about saving 20 minutes on your journey time to increase the amount of time you can spend in a meeting at the other end."