End November Links

Hurricane hits 'just-in-time' economy & When the hoarding equilibrium sets in - couple of interesting posts on hurricane Sandy
The case for electronic money: The end of inflation and the end of recessions - negative interest rates! Quote: "And as a society, we shouldn’t want money to be a good store of wealth over the long haul: we need people to put their wealth to work, either directly or indirectly building companies to help the economy to grow, not burying piles of paper in the sand." Brilliant.
Fasullo and Trenberth Find Evidence in Clouds for High Climate Sensitivity & Solar storm as desert plan to power Europe falters - the worst news I've read recently...
Murphy's Law - Noah Smith takes on Tom Murphy's exponential economist meets finite physicist post (I did this months ago)

End October Links

Welcome back, McArdle, Will American innovation slow if we go "cuddly"? & Acemoglu and Robinson versus the blogs - interesting debate on how global innovation rate could change if America became more social democratic [e.g. does pharmaceutical innovation, which Sweden benefits from, depend on high payments from America's private healthcare sector?], rounded off with Noah Smith's devasting summary of the scientific method in economics. Instinctively I'm with Mark Thoma & Noah Smith on this.
Is unlimited growth a thing of the past? - more comment on the Robert Gordon slow growth paper, this time from Martin Wolf 
Hard money and gerontocracy - Noah Smith describes an interesting paper relating monetary policy to demographics
Why we have to win -  I wanted to keep this blog economics focused, and never intended to link to pro-independence polemics (whether I agree or not). So my continued linking to WoS pieces must be viewed in this light: another excellent piece, strong on the economic history of Britain since 1979, which chimes with my views that ending the Right-To-Buy is the SNP's finest achievement (I wish they'd also endorse a land value tax and explicitly support a higher revenue base for Scottish public services though - legislation this week to reduce empty properties discount on business rates is a move in the right direction though).
So far so good: the global carbon sink in 2011 - this is the best news I've seen for a while...
Small is beautiful - Link to Robert Barro's classic article that started the optimal country size literature.
What explains poor growth in UK? The IMF thinks it's fiscal policy - and the multiplier is big!
Things that aren't bubbles - clear and concise
Framing worker democracy - this contains a very disturbing statistic for our long term well-being: "Capitalists have largely ceased to be providers of capital.For most of the last ten years, non-financial firms, in aggregate, have retained more in profits than they have spent on capital equipment. And except for the recapitalization of banks, net share issuance has been small or negative in recent years."
What do people mean by helicopter money? - I still think Wren-Lewis is missing the distributive differences between helicopter money and QE+Fiscal Policy, but this is a good clear post.
Does the "Entrepreneurship Subculture" prevent big ideas? -  interesting: another mechanism for increasing returns from interaction & agglomeration not to suck us into a black hole of prosperity; and another contributor to `Great Stagnation' type theories.

End September Links

Arguments for ending microfoundations - this post has lots of interesting links to possible future developments in macroeconomic theory
Come on Bernanke, fire up the helicopter engines 
Post growth politics - more on the Robert Gordon slow growth paper, Chris Dillow speculating on political impacts.
The gold standard and economic growth - James Hamilton replies to Tyler Cowan
Predistribution - good, bad & unoriginal - Chris Dillow has an excellent (whether original or not) critique of Ed Milliband's latest witterings
A good point and bad point from Sumner - I think this post deals very effectively with a lot of the criticisms other (good) economists have of Paul Krugman. Basically Krugman's right - you might not always like or exactly agree with the way he's expressing it - but get over it.
The regional escalator - there're not many good Scottish independence posts (pro or anti) that go into economics, but there's a whole economic model described in this one.
Why-I am a macroeconomist: increasing returns and unemployment - Martin Weitzman is my hero
Inflation expectations: a feature not a bug - Krugman sorts out some more terrible economics reporting!
Paul Krugman asks a question: On the "Austrian" hatred of fractional reserve banking, paper money, etc. Weblogging - Essay length rant from Brad DeLong
Covert virtue - the signal that doesn't bark? - This has made me change my mind!

Universally populist nonsense

Quick post on the nonsense that both the UK LibDems and Scottish Labour have come out with in the past few days: why assume revenues are fixed and therefore that benefits paid to wealthier sections of society are benefits that cannot be paid to lower income sections of society?

The tax and benefits system has to be looked at as a whole and therefore, of course universal benefits are affordable - just raise taxes. A 1% tax rise on Alan Sugar's income would not only pay for his bus pass but also for many many other poorer pensioners' bus passes.

Further, looking at the efficiency and political economy of universal vs means-tested benefits:
# universal benefits are cheaper to administer
# universal benefits are associated with the unifying externality that wealthier sections of society are more likely to 'buy-in' to the welfare state. If 'your' taxes are not just to be given away to 'other' people, then perhaps you become more predisposed to paying your taxes and recognising the benefits of aligning the organisation of public services with whole population benefits rather than treating them as consumer services that an individual purchases.

Some good relevant comment:
# Chris Dillow
# Jonathan Portes
# Stuart Campbell

Never waste a crisis

With Arctic sea ice extent and volume reaching new lows (see here & here for volume, here for area & here for impact on British weather), it's surely a good time to publicise my latest working paper: A balance of questions: what can we ask of climate change economics.

End August Links

Rational overconfidence -  I like the 10 heads strategy for predicting a biased coin: your prediction will be biased, but given only a single prediction can be made, this is the optimal strategy.
Filters and full employment (not wonkish really) & HP filters and potential output (good description of HP filters - unconvinced by attempt to rubbish Krugman for essentially just sloppy language, and unconvinced as well by the rest of the post)
Heterodox and mainstream macroeconomics, The heterodox versus the superhuman representative agent, sector financial balances as a diagnostic check & Can heterodox economists constructively engage the mainstream?
Something big happened in early 70's; Producitivty growth: the long term; Is economic growth going down the drain; & American growth could be higher than the pessimists think - I'm very interested in this - has to form the basis for some future project or two...
Unemployment: a brief history

Michal Kalecki on the Great Moderation - another brilliant post from Interfluidity which links to the stability versus robustness trade-off of complex adaptive systems
Why are (almost all) economists unaware of Milton Friedman's thermostat?
Unit roots and pro-cyclical fiscal policy
Trade-offs between inequality, productivity, and employment  - this post is one of the most interesting ideas I've read about inequality and its effect on economic activity: utterly brilliant.
No theory X in shining armour - fascinating economic philosophy, I can think of objections though...
Innocent Bystanders? Monetary policy in the U.S. and inequality - this reinforces my priors: the so called 'Austrians' economic model just seems like nonsense to me. Also QE & Inequality: Don't blame the bank
Inflation target at 1.5% since 2008 - this is something that is not at all appreciated: the BoE is running tight monetary policy relative to it's policy objective (expected (not actual!) inflation = 2%)
House prices consumption and aggregation - a very clarifying post on relationship between house prices and aggregate consumption levels.
2014 v 2016: An open letter to Angus Robertson and all yes campaigners - Kevin Williamson hammers away at the conflation of SNP policy and policies that may be enacted in an independent Scotland. Can't be said often enough.
Austerity's not working - I don't know how many times it needs said, but this is a fairly eloquent repetition of the basic argument.
Why do we need to pay billions of pounds for big projects? - an excellent question! John Kay proposes that technological advances have reduced rather than raised productivity. Not sure, but very interesting...
The new gold rush - excellent point that in exploiting a non-renewable resource to maximise value, we should decrease production if current yields are lower than expected growth in prices. Related to my paper that presents a mechanism for growth in prices to be negatively related to future scarcity.
Neo fights (slightly wonkish and vague) - I love this put down of "Austrians" (and I think it applies also to other so-called "heterodox economists" - even though I'm inclined to agree with the policy prescriptions of some of these other heterodox economists whilst not at all with the Austrians): "They claim to reject neoclassical economics, but their alternative is not an alternative model but a lot of verbiage; they talk at the economy, and imagine that by so doing they achieve a higher level of sophistication and realism than economists who try to express their ideas in terms of little models. And they’re kidding themselves; all they’ve done is hide their implicit models and prejudices behind a dust cloud."
Arctic sea ice volume - scary stuff. Fitting a quadratic trend to Annual Minimum Sea Ice Volume from 1979-2011 and projecting forward, we get zero volume by 2017...

Songs in econ blogs

Economics blogs often feature the blogger's choice of music. For example Paul Krugman's aye posting Arcade Fire, Brian Ashcroft likes Julie Fowlis, and Tyler Cowan recomended King Creosote & Jon Hopkins. I'm not entirely sure why they do this: the fact that I enjoy their musings on economic policy or theory, surely doesn't provide any signal that we share musical tastes?

Therefore, in keeping with this practice, but instead of my picks being a musical recommendation, I'm posting songs with economic relevance:

• The central message of the new economic geography literature is that density is good. I think this can be nicely summarised by "Mmm skyscraper, I love you"

• Economic growth is usually modelled as being due to `technological progress'. And there surely cannot be a better description of the technological progress we have enjoyed over the past 2000 years than the lines: "If Jesus came to Earth today, They’d crucify him straight away, Upon a cross of `MDF', And they’d use `No Need For Nails' "

• More seriously... Is there a harsher description of Factor Price Equalisation than "They complained in the East, They're payin' too high, They say that your ore ain't worth diggin', That it's much cheaper down, In the South American towns, Where the miners work almost for nothin'."?

This is unlikely to be a regular feature...