Wednesday, May 27, 2009

Wasting a recession, African aid, principles courses, housing, stock predictions, and Krugman.

Simon Johnson echoes an idea from Rahm Emanuel: Don't let a recession go to waste. The idea is, essentially, that a recession is a time where more people are willing to back big change. I'm not sure how I feel about this--I'd be happy if things changed for the better, but how do I know I can trust legislators? Should interest groups have an opportunity to push the country around, while we're down? That being said, the five points that Emanuel listed seem like good ones, and people seem to trust this administration much more than the previous one.

A FT discussion on Africa: Is Aid Working? It's an interesting discussion, and I'm of the opinion is that aid can work, but more than giving money, steps must be taken to ensure and enhance the effectiveness of aid.

Scott Beaulier relays a message from Greg Mankiw. Despite the recent events, economics principles courses won't change significantly. The groundwork that those classes lay stays the same, though graduate courses will likely see change in the fields of financial economics or public choice.

A couple on housing. Six years of housing price gains have been wiped away in three years, in real terms. CalculatedRisk has graphs on that, as well as the price-to-rent and price-to-income ratios.

And a couple (more) on the recession: Political Calculations tries to predict changes in the stock market, based on recession probabilities. It should be interesting to watch June 16-23 and September 10-16. And, Krugman is somewhat optimistic in a recent statement, as he says the world economy is stabilizing. We've avoided catastrophe! Still, he frets about the nature of the recovery. I note this isn't getting more media coverage, like Krugman's previous, less optimistic predictions.

Monday, May 18, 2009

Asia, law, international trade, and health care

Asian economies are supposed to be the first ones to recover. I suppose that's not a surprise--lesser developed countries tend to have a higher GDP growth level, so a global recession is less likely to keep their growth rates negative.

Economics is respected in law. James Kwak thinks maybe lawyers shouldn't stick so closely to economic principles, or at least they should recognize its shortcomings. I don't advocate as drastic a view as James Kwak puts forth, but I do think it's important for lawyers to understand the limitations of using the Hand formula and of traditional economic analysis.

Dani Rodrik thinks about which sorts of trade liberalization policies will have the greatest positive impact. He says that we should open agricultural trade and increase quotas for highly skilled foreign workers.

Apparently, we can pay for universal health care using sensible cost-cutting practices.

Wednesday, May 13, 2009

CPI, developing nations, marriage, and Wolfram Alpha

Matt Nolan tells us not to confuse CPI growth with inflation. CPI is a bad indicator of the magnitude of inflation--besides, they measure different things.

Here's a vox article on trade advice for developing nations during a recession. Avoid protectionist policies. Um, I think they need more help than that.

Spendthrifts tend to marry tightwads, which contributes to marital conflict. Does this mean that, on average, couples make pretty good savings decisions? And, with less variance than single people?

Wolfram Alpha provides a new way to search for information. This looks like a really neat system, actually. It gets released this month, so check back to see it in action!

Tuesday, May 12, 2009

Credit rating, soda tax, education, and political definitions

Free Exchange wonders what we should do about credit rating agencies. Should we have more competition to ensure better, more reliable ratings? Or, will that cause people to just shop around for ratings?

Tim Haab talks about a soda tax, and quizzes us on it. Personally, I wouldn't mind swallowing the three cents per twelve ounces (pardon the pun).

Newmark's Door points to a paper that emphasizes the importance of education in helping low-wage workers. Really, this surprises no one, but it should continue to get airtime as long as there aren't many educational options to low-wage workers.

William Easterly tries to apply more broad definitions of "liberal" and "conservative" to US politics--definitions which hold more internationally. Really, I think this isn't important. In the US, "liberal" and "conservative" are more titles than descriptive adjectives. Though it's good to be aware of what the terms actually mean, it's also good to be aware that the real definitions don't apply.

Monday, May 11, 2009

Maternity leave, Jamaica, Zimbabwe, the world, Venezuela, and the US federal budget

The Economic Policy Institute points out that the United States is severely lacking in maternity leave benefits. I wonder how that affects our national birth rate.

I've heard a lot about problems in Jamaica recently--I was surprised, and I think this article reflects why I was surprised. Socialism doesn't work.

The IMF provides an update on Zimbabwe. As you might expect, things aren't going so well there.

Simon Johnson reminds us that the rest of the world matters, too. Since the US economy is 20-25% of world output, they have an impact on us.

Speaking of the rest of the world, there's apparently some research showing how Venezuela's Chavez has hurt his opposition. This isn't a surprise to those who have been following Venezuela, but it's nice to see the research.

Lastly, the Obama Administration takes a jab at trimming the federal budget.

Saturday, May 9, 2009

When Krugman makes me roll my eyes.

Krugman had a pretty grim outlook of the possibilities of the stress tests before, as I mentioned before, referring to an interview he had. Now he says that "everyone knew" that the banks would be all right. It seems to me that he makes a lot of leaps of logic.

Here's some other commentary on the stress tests.

Friday, May 8, 2009

Hurricane claims, grocery stores, inventive cities, recession news, and Venezuela

2008 hurricane claims put Texas home insurance companies in the red. Ouch. Hurricanes continue to affect us. I guess whoever designed the hurricane insurance plans didn't know how much risk was actually involved, or those insurance companies didn't properly prepare themselves for such a situation.

Grocery stores are doing well during the recession.

Houston is one of the world's most inventive cities. We're pretty creative people! I don't think a lot of people believe this, though.

Productivity and labor costs are up. You might expect this from a recession, as companies try to focus on efficiency to weather the rough times.

Venezuela is seizing the assets of more oil service companies. I would have ended my operations there some time ago.

Thursday, May 7, 2009

100 days, blogging v journalism, econophysics, and jobs.

The guys at Capital Gains--Stan, Pete, and Andrew--provide their thoughts on Obama's first 100 days. Stan notes Obama's popularity, and partially attributes it to a weak opposition party. Pete, on the other hand, notes six strengths of Obama. Andrew isn't happy with how banking was handling, but admits that there is reason to be optimistic on five other fronts.

Felix Salmon compares blogging and journalism. He says that bad journalism is worse than bad blogging.

I suppose at a time when economists are being blamed for everything, it's not surprising to see more articles on econophysics. This one from Mark Buchanan. I think most economists don't take econophysics seriously, but I think it's interesting to see how other people handle similar problems--though, really, econophysics doesn't handle very similar problems as most of economics.

I like articles like this, which highlight how flexible the economy is. Though we're losing a lot of jobs, a lot of jobs are opening up, too. Sure, there may be fewer jobs created than lost, but the situation is not as dire as some may want you to believe.

Wednesday, May 6, 2009

History, open data, auto industry, financial planning, bachelor's degrees, and gas prices

A new blog on economic history.

Hey, world bankers like open data too! Those are great guys.

Speaking of which, Hal Varian used Google Trends to make better forecasts.

James Hamilton is still on the case, reporting about the declining auto industry.

ESPlanner, a long term financial planning website, though the site isn't always working.

Some community colleges offer bachelor's degrees. I like that degrees are becoming less expensive, but they shouldn't be easier to get. This is the classic Spence problem.

Mark Perry gives us a look at real gas prices. It looks like a falling trend since 1919, with some big spikes thrown in. And, note that the spikes take us to about back to the 1919 level anyways.

Tuesday, May 5, 2009

Excess demand for money, manufacturing news, grid parity, and Austrian BC theory

Nick Rowe on the importance of excess demand for money. This directly relates to what the Fed has been doing for quite some time to help the current crisis. Nick has had a lot of really good posts lately, it seems to me.

Mark Perry had optimistic news on the manufacturing front. It seems like these numbers will return to normal pretty soon, which makes me think that more focus will turn towards worsening labor numbers. Though, we're only six months or so away from the peak. Six months seems like a relatively short amount of time considering how long this had dragged out already.

John Quiggin reports that some solar power companies may be approaching grid parity, or the point where solar power is as cheap as conventional power.

Another good post from John Quiggin, he talks a little about the history of the Austrian Business Cycle, and why it isn't really taken seriously anymore by more empirical-minded economists.

Monday, May 4, 2009

Development, crowding out, NewDeal2.0, economic terminology, and China,

Here's a nice story about a UCLA grad student making a difference in the world.

The Skeptical Optimist points out that the "crowding out" theory is bunk.

Here's an interesting website providing commentary from political scientists, economists, historians, and more. NewDeal2.0.

Uwe Reinhardt tells writes an article mostly directed at economists, I think. Some our terminology shouldn't is misleading when used in public discourse. We should be careful in using it, and others should take it with a grain of salt.

Is the Chinese economic model more effecting than the US economic model? Uh, no. Despite China's growth, models show pretty clearly that underdeveloped economies will tend to have higher growth rates than developed economies. This isn't a function of types of economic systems.

Friday, May 1, 2009

Fuel efficiency, forecasts, gendered lob losses, April economic summary, and GDP growth rates

Fuel efficiency raises demand, not lower it. Efficiency lowers cost, which raises demand in the long run. I keep thinking that the short run effect should be modeled as a rise in supply, but the narrative doesn't quite fit.

Simeon Djankov says not to pay attention to the forecasts. They lag behind the news, and are thusly not worth much.

Job losses for different genders. Men have lost many more jobs than women, net. Women seem to have more recessioon-proof jobs.

April economic summary in graphs. It seems to me that most of them tell a similar story.

GDP growth rates for beginners. This is really a well-written and easy to understand post, I think.