Archive for the 'Global Economy' Category

World’s worst drinking game

January 16, 2016

Conversation at lunch yesterday:

  • “Was there any sensible economics in the debate?”
  • Venky: “That’s the world’s worst drinking game, drink when someone makes sense.”
  • Ruhl: “I think Rubio said something sensible about tariffs”

Here’s the relevant excerpt from the transcript (lightly edited, emphasis added):

CAVUTO: So you’re open to a tariff?
TRUMP: I’m totally open to a tariff.
RUBIO: I think we need to be very careful with tariffs, and here’s why. China doesn’t pay the tariff, the buyer pays the tariff. If you send a tie or a shirt made in China into the United States and an American goes to buy it at the store and there’s a tariff on it, it gets passed on in the price to the consumer.

If we were picky, we’d say something about the slopes of the supply and demand curves, but this is close enough to take a drink.


“Maple syrup is a sickness”

December 16, 2015

Let’s step back from maple syrup for a minute. A price-fixing cartel is an agreement among producers to reduce supply in order to maintain a high price. Producers face two classic problems in doing this. One is deciding whose supply gets restricted. The other is that once they deliver a high price, members have an obvious incentive to increase production, which (of course) undercuts the point of the cartel. So the question is how to determine and enforce supply limits.

One of the most effective ways is to get the government to do it for you. Which brings us to maple syrup. Our Montreal correspondent Allan Collard-Wexler sends this wonderful piece from Canada’s National Post. Some of the highlights (lightly edited): Read the rest of this entry »

The Swedish utopia

December 1, 2015

I thought this interview was fascinating. Two soundbites:

  • [W]hy [are people] so sure that [with a more generous welfare state] you will become Scandinavia? Maybe you become Italy instead.
  • About 85% of ethnic Swedes work, one of the highest numbers in the world, higher than the US but not higher than that of Scandinavian Americans. And this is a prerequisite to have generous welfare state: almost every able bodied person works. Non Western European [immigrants]: 50% work, and these numbers have looked the same for the last thirty years.

Thanks to MR for the link.

Advertising and analytics

November 28, 2015

I just read a great piece by Ian Leslie on the advertising business. It’s an exceptionally good read. Do read the whole thing, but here are some highlights (quotes lightly edited for continuity): Read the rest of this entry »

Angus Deaton awarded Nobel

October 12, 2015

Angus Deaton has long been one of my favorite economists, with work that ranges from the technical to the extremely practical. I particularly enjoyed his thoughtful comments on GDP in rich and poor countries (they consume different products, hard to compare) and happiness research (what does it mean when poor people tell us they’re happy?). Quartz has the best short summary, but see also his collection of popular writing and Google Scholar page. Also the Nobel announcement.

Update:  Good link, and another.

Regulating taxis

October 11, 2015

In Global Economy, our discussion of the pros and cons of regulation goes like this:

  • There’s often a legitimate rationale for regulation (eg, safety).
  • Real-world regulation often goes well beyond the rationale, typically because incumbents use it to protect themselves from competition (eg, Tesla, chickens, braiding hair).

Read the rest of this entry »

Global poverty hits all-time low

October 8, 2015

From the World Bank:

The number of people living in extreme poverty around the world is likely to fall to under 10 percent of the global population in 2015, according to World Bank projections released today, giving fresh evidence that a quarter-century-long sustained reduction in poverty is moving the world closer to the historic goal of ending poverty by 2030.

A lot of this comes from China and India, but you see similar patterns across the board.

What’s up with China?

September 14, 2015

China has been a constant source of speculation in the econ group here. Some thoughts (quotes approximate):

  • Slowdown or crisis? Nouriel Roubini: “I don’t see a hard landing. Growth should be 6-6.5% over the next two years, 5% in the medium term.” That’s slower than we’ve seen, but would look pretty good anywhere else.
  • Impact on the US? Lew Alexander, at the CGEB’s forum last week, thought the impact on the US would be small: “The US is still to a remarkable degree a closed economy. A slowdown in China is not that big a deal to the US — unless there’s a financial crisis.” That fits lots of evidence that shows only modest relations between economic fluctuations across countries. The 2008-09 financial crisis was an obvious exception, but that’s the point: it was an exception.

Corruption in the US

September 8, 2015

United’s CEO resigned. The Times reports:

In February, federal prosecutors issued subpoenas focused on whether the former chairman of the Port Authority, David Samson, had pushed United to reinstate flights that he used to travel to and from his weekend home in South Carolina.

Steve Levitt on Big Data

September 7, 2015

Julia Lane passes on this wonderful talk. It’s worth 55 minutes of your time for the (cautionary) business stories alone. And no, I won’t give you any soundbites.