Truck and Barter

Assorted and Interesting

Are The Big Four Econ Errors Biases?
A bird's eye view of econometrics
Is democracy good for the poor?
Numbers Guy on Armenian Genocide
The importance of a good analogy
Political Price Cycles in Gasoline Markets?
Wading in waste
Downshifting and Reversion in Forecasts

I Want It Now!The Curious Economics Of Temptation By Tim Harford
The Exceptionally Entrepreneurial Society
For Better or For Worse: Entrepreneurs, Families, and Inequality
Does America need a draft to win the war on terror?
Why understanding economics is hard
St Lucia best in Caribbean for Doing Business
God made Indonesia for free trade

Economics: The Invisible Hand of the Market
Dasgupta on the Stern Review
A Cool Calculus of Global Warming by Joseph E. Stiglitz
A call to arms- Anthony Giddens
Should Congress Raise the Federal Minimum Wage?—Posner
Iraq in Fragments (from the latest Foreign Exchange show)

Fed Chairman’s Daybook
A giant's strength is valuable - if not used like a giant by John Kay
Ivy League Investors by Robert Schiller
Globalization Makes an Easy Scapegoat by Robert Samuelson
Making fine distinctions in understanding hereditability of attitudes
What We Learn When We Learn Economics

Why Oh Why Can’t We Have Better Economists?
Can foreign aid work?
Uninsurable
Are Husbands really like potatoes?
Settling the New Continent by David Warsh
Syntax and flow

Getting it Wrong by David Friedman
Was Friedman a "Great Conservative Partisan"?
Milton Friedman: The Methodology of Positive Economics
Friedman On Growth Measurements and Immigration
The fading of Friedman by Paul Ormerod

European Cities Do Away with Traffic Signs
Secrets of the Cave Paintings
How I learnt to walk tall at 5ft 5in
The Paradox of Military Technology
Velvet Revolution in Iran?
Less Faith, More Reason by Steven Pinker
Mahfouz’s grave, Arab liberalism’s deathbed
Free Speech, Israel, and Jewish Illiberalism
The Myth of Thomas Szasz
Mirror, Mirror
Evidence that psychology, like biology, is conserved between human and nonhuman species augurs a shake-up for science and society
Conspicuous Proliferation
Just their type
Our appetite for literary gossip is insatiable, but great writers aren’t mere fly-by-night celebs, argues Bryan Appleyard
Bush, Maliki, and Lots of Questions
What is a Civil War?
Henry Kissinger says what he means, whatever that means

Capitalism, not democracy leads to peace?

Don Boudreaux links to an interesting working paper by Columbia University political scientist Erik Gartzke; The Capitalist Peace.

The following is the conclusion of the paprer.

“This study offers evidence suggesting that capitalism, and not democracy, leads to peace. Additional research is needed to corroborate, extend, and even refute the findings reported here. One must be circumspect in questioning a body of evidence as large and as carefully constructed as that on the democratic peace. Still, economic liberals have long seen in free markets and prosperity the potential to discourage war. A century ago, the “conventional wisdom” looked more like this study and less like that of democratic peace researchers. While past arguments were clearly simplistic and overblown, there does now seem to be grounds for reconsidering liberal economic peace theory.

Critics can differ with my revision of classical arguments, or can plausibly challenge the assumptions on which my version of the capitalist peace is built. The statistical models I develop, and the findings that I present, can be altered, possibly in ways that again show that democracy matters. For now, I hope my claims are coherent, empirically plausible, and at the very least intellectually provocative. What is the “larger” relationship between development, capitalism, and democracy? It might be that democracy actually lies behind the apparent impact of capitalism on peace. Still, the world was not always made up of 50% democracies. Little attempt has been made to rule out the possibility that democracy and peace have common causes. A logical extension of this study is the exploration of determinants of political and economic liberalism, though resolving these more complex causal arrows would seem to require a far more profound set of conclusions about the world, ones that are still under construction in comparative politics, economics, and other fields.

The collapse of the Soviet Union in the early 1990’s gave new impetus to the exploration of domestic determinants of international relations. Today, political revolution from without is being attempted in the Middle East, in no small part because policy makers believe that peace can be had through regime change. If the imposition of liberal politics offers a domestic paradox, at the international level coercing democracy is an extreme, though arguably logical, extension of democratic peace theory. At the same time, allowing people freedom to choose implies that they will sometimes choose to disagree. A growing number of popularly elected leaders oppose the interests of established democracies. If democracy reflects the popular will, and many people in the world are unhappy, we should perhaps not expect that all new democracies will like the old ones.”

Related;

The Democracy Advantage: How Democracies Promote Prosperity and Peace (chapter 1 of the book)

R.J. Rummel's blogs; Freedom's Principles and Democratic Peace

The Declining Advantages of Democracy: A Combined Model of War Outcomes and Duration D. Scott Bennett, Allan C. Stam III

Economic Freedom of the World 2005 Annual Report; Chapter 2 - Economic Freedom and Peace

Book review of Alexis de Tocqueville: Prophet of Democracy in the Age of Revolution—A Biography By Hugh Brogan -Alexis de Tocqueville's strong views on demagoguery and citizenship are worth remembering, as is clear from a splendid new biography

Democracy pays off in the long run...

Economic and Political Freedom: Does One Lead to the Other?

Podcasts;

Niall Ferguson: The War of the World

History of Altruism

Private Equity- the purest capitalism

Podcast of the Day- Lecture 3 Reform and Deregulation

The Boyer lectures by Ian Macfarlene, former governor of Reserve Bank of Australia, continuos;
By the 1970s the world's developed economies were stuck in the worst position they had been in since the Great Depression of the 1930s. Australia shared this experience but, propelled by a program of reform and deregulation, it slowly became competitive again and began to register strong rates of growth. In this environment the corporate sector embarked on an era of heightened activity, driven by massive borrowings, takeovers and mergers. It is now apparent that the implications of sudden financial deregulation were not fully understood, and the dawn of the 1990s would bring with it new challenges for those charged with navigating the twin hazards of boom and bust.

Listen to the podcast. Some excerpts below;

“Let me digress for a moment to discuss another epithet routinely applied by those opposed to economic reasoning, which is to refer to economics as the dismal science. Whenever I hear this term, I wonder how many people who use it know its origin. It was coined by Thomas Carlyle, in 1849, in an essay called, Occasional Discourse on the Negro Question, in which he argued for the reintroduction of slavery into the West Indies. He viewed the former slaves as 'indolent, two-legged cattle, who should be subject to the beneficent whip'. It is extraordinary that the author of these views which were reactionary and racist even by the standards of 1849, should have had the temerity to refer to his opponents, the most prominent of whom was John Stuart Mill, as representing the dismal science, when all they were doing was arguing that freed slaves should have the same rights as other free people. Mill wrote a reply to Carlyle expressing views that would be widely held today, but unfortunately it is Carlyle's throwaway line that has endured, not Mills' sensible reply….

While there had been a long series of steps in the process of financial deregulation, the decisive one that shook up the system was the entry of 15 foreign banks in 1985. They were eager to gain a foothold in Australia, and this meant lending where it was easiest to do so, which was lending to businesses. Foreign banks everywhere have always found it difficult to break into the household lending market.

The existing banks also increased their lending to maintain their market share, even though they had little experience of the credit assessment required in the new deregulated world. One prominent bank chief said that he had 'thirty years experience as a lending banker, but the first 29 were all the same.' As the competition to lend intensified, many borrowers, who had formerly not been able to obtain credit, did so, and in large amounts.

The journalist and financial historian, Trevor Sykes, sums up the period this way: 'Never before in Australian history had so much money been channelled by so many people incompetent to lend it, into the hands of so many incompetent to manage it.'..

More on Milton Friedman

David Friedman, son of Milton Friedman notes the geographical diversity of comments for condolences about his father on his blog. One thing I noticed was that there was not a single Arab country and only three were Muslim nations. I don’t know whether this means anything about the state of mindset about the people of these countries.

Related;
Milton Friedman and the Social Responsibility of Business
Milton Friedman: A Tribute
The Draft: Charles Rangel, Milton Friedman, and William Meckling
Milton Friedman's Wisdom and the Impending London Olympics

Milton Friedman, Friedrich Hayek, Augusto Pinochet, and Hu Jintao: Authoritarian Liberalism vs. Liberal Authoritarianism

The other Milton Friedman by Cal Thomas
The Other Milton Friedman: A Conservative With a Social Welfare Program by Robert Frank

Milton Friedman-A heavyweight champ, at five foot two
From the archive-A Tract for the Times;
"Writing in the preface to a later edition, Milton Friedman recalled that his book's views “were so far out of the mainstream that it was not reviewed by any major national publication... though it was reviewed by the London Economist and by the major professional journals.” More than 400,000 copies of “Capitalism and Freedom” were sold in the 18 years after it was first published."

Economists and blogs

Greg Mankiw links to an article in LA Times on economics blogs (the article mentions that Lawrence Summers writes a blog- I’m not sure whether this is the case).

Recently The Economist had two articles on economics blogs; Pigou or NoPigou? and Economists' blogs; The invisible hand on the keyboard.

As for me one reason why I blog relates to the fact in high school the economics teacher we had showed up to class for about 3 months of the two year period. I wish we had access to economics blogs or for that matter the internet. If I had been of any help to any student in similar circumstances I would have achieved my main objective.

My challenge for Econ bloggers; To sponsor a student (high school or undergraduate) in a developing country, be a tutor and mentor for him/her and be a personal guide till the student finishes school.

Podcast of the Day- Islamic Finance for US

Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co., talks about opportunities in Islamic finance and the outlook for the U.S. dollar and euro (Bloomberg podcast).

Related;
Britain can be gateway to Islamic finance- Gordon Brown (earlier post)
The State of Islamic Finance in Australia
Short Selling and the Travesty of Islamic Finance

Cayman Islands Emerge As Leading Islamic Finance Domicile
Islamic Finance podcast
Fund for Shariah Scholars in Islamic Finance
Islamic Finance isn’t Islamic

Islamic Finance (World Bank portal on the topic)

Popularity Of Islamic Finance Market On The Rise
“Not surprisingly, the jump in popularity of sukuks has drawn the interest of institutions outside the Middle East.Two years ago, the German state of Saxony Anhalt sold the first sukuk from the West. IFC is the first supranational to issue Islamic securities in the Malaysian market, and the first supranational to issue domestic Islamic bonds in any market”
Islamic Banking (transcript of a program at Radio National)
Two stories on Islamic Finance

Blogs related to Islamic Economics and Finance; Islamic Finance Blog, Islam and Economics

Bibliography on Islamic Banking

Working Papers
Corporate governance in institutions offering Islamic financial services : issues and options
Corporate governance and stakeholders' financial interests in institutions offering Islamic financial services
Regulating Islamic financial institutions : The nature of the regulated
Mapping the possibilities for Islamic microfinance

Book recommendations from Tom Palmer

“People who wish to understand the Islamic tradition would do well to try to start with an examination of the role that Islam played in the development of law, rather than with the various Muslim-bashing books that have appeared recently”, says Tom Palmer.

Book recommendations;

Wael B. Hallaq’s The Origins and Evolution of Islamic Law

Harold Berman’s Law and Revolution: The Formation of the Western Legal Tradition.
Law and Revolution, II: The Impact of the Protestant Reformations on the Western Legal Tradition

Mohammad Hashim Kamali’s books-Principles of Islamic Jurisprudence, Freedom of Expression in Islam , Freedom, Equality and Justice in Islam

This Law of Ours and other essays, by Muhammad Asad

Related;
Muslim Basher Robert Spencer Upset at my Dismissal of his Book (Tom Palmer post)

Islam and Economics- blog of Professor at Rice University

Podcasts;
Islam Then and Now
Daniel Peterson believes the key to understanding present Islamic attitudes lies in understanding the religious and philosophical texts of its past.

Interpreting culture
The distinguished American anthropologist Clifford Geertz died last month

This and That

Some articles worth reading;

The Great Liberator- Lawrence Summers on Freidman
On Milton Friedman's Ideas—BECKER
Milton Friedman's Case- Arnold Kling

The Young Economist by Lizbeth Scordo
Three Things You Don't Know About Aids In Africa by Emily Oster
Methodology Matters by Edward L. Glaeser
Economics focus- Third thoughts on foreign capital

How last century's money wars may lead to healthcare, pension reform
Managing Change; Is the Penny Worth Keeping?
The Flintstone EffectTracing wealth back to the Stone Age by Joel Waldfogel
My Boss Is 65 and Pregnant; How fertility advances could allow women to take over the boardroom By Tim Harford

The New Baby Boomers by Francois Bourguignon
The Zigzag of Politics- David Warsh
DEAL SWEETENERS- James Surowiecki
More Things Economists Don't Say

Patriots vs. Redskins
Beyond Insurance: Weighing the Benefits of Driving vs. the Total Costs of Driving- VARIAN
Want world peace? Support free trade. By Donald J. Boudreaux
The Undercover Economist: Round numbers By Tim Harford

Who's Counting: Which 'Experts' Make Better Political Predictions?
Grading the Pollsters
Why the successful prefer being average to extreme
America’s Anti-Environmentalists

It's time for truth in property taxation
The Social Responsibility in Teaching Sociobiology
Tracing the divine obsession; Also known as `the game of games,' chess has seduced kings and queens, beggars and madmen for 1,500 years.
When Legal Meets Marketing

How the Web Prevents Rape
Murphy’s law
What did Descartes really know?

Podcast of Day- Boyer Lectures

Lecture 2: From Golden Age to Stagflation
For the world's developed economies, the end of the second world war was the trigger for almost 30 years of sustained growth. Ian Macfarlane says the Keynesian system of economic management had served policy-makers well, but asks had Keynesian policies been pushed too far, beyond their natural limits? Inflation began to rise in all countries in the late 1960s and early 1970s. When the first OPEC oil shock occurred it would bring the post-war boom to a sudden close, and give rise to a new condition—stagflation. Some excerpts below;

“These economic developments and macroeconomic debates occurred in virtually all the developed countries. Nowhere were they more prominent than in the United Kingdom, where inflation had two peaks in excess of 20% per annum, during the 1970s and where the UK government finally had to go, cap in hand, to borrow from the IMF in 1976. Perhaps therefore it is fitting that former British Prime Minister, Jim Callaghan, be given the last word to sum up what he had learned from the economic turbulence of the 1970s. Callaghan said, and I will quote:

What is the cause of high employment? Quite simply, and unequivocally, it is caused by paying ourselves more than the value of what we produce. There are no scapegoats. That is as true in a mixed economy under a Labour government as it is under capitalism or communism. It is an absolute fact of life, which no government, be it left or right, can alter. We used to think that you could spend your way out of a recession, and increase employment by cutting taxes and boosting government spending. I tell you in all candour, that that option no longer exists, and that insofar as it ever did exist, it only worked on each occasion since the war, by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step. Higher inflation, followed by higher unemployment; we have just escaped from the highest rate of inflation this century has known; we have not yet escaped from the consequences, high unemployment. That is the history of the last 20 years.

To an economist, Callaghan's eloquent lament sounds very much like a lay-man's version of the dynamic instability engendered by attempts to exploit the Phillips Curve.”

Milton Friedman on Iraq War

“Mr. Friedman here shifted focus. "What's really killed the Republican Party isn't spending, it's Iraq. As it happens, I was opposed to going into Iraq from the beginning. I think it was a mistake, for the simple reason that I do not believe the United States of America ought to be involved in aggression." Mrs. Friedman--listening to her husband with an ear cocked--was now muttering darkly.

Milton: "Huh? What?" Rose: "This was not aggression!" Milton (exasperatedly): "It was aggression. Of course it was!" Rose: "You count it as aggression if it's against the people, not against the monster who's ruling them. We don't agree. This is the first thing to come along in our lives, of the deep things, that we don't agree on. We have disagreed on little things, obviously--such as, I don't want to go out to dinner, he wants to go out--but big issues, this is the first one!" Milton: "But, having said that, once we went in to Iraq, it seems to me very important that we make a success of it." Rose: "And we will!"

-In an interview on WSG; The Romance of Economics Milton and Rose Friedman: Dinner with Keynes? Yes. War with Iraq? They disagree

Related;

The Great Friedman
Milton Friedman - Economist Who Showed The Way For Thatcher
Milton Friedman On Prohibition
Shalom Milton Friedman
Is Monetarism Dead?
Milton Friedman and the Pencil
All the obituaries of Milton Friedman relate this little anecdote
An Appreciation of Milton Friedman
Milton Friedman: How to Cure Health Care
Friedman deserves the thanks of everyone opposed to conscription
Milton Friedman Died. Did We Lose a Scientist?
Milton Friedman, A Modern Galileo
Friedman's theories leave a mixed legacy (something from England)
The Legacy of Milton Friedman
What Bush Could Learn From Milton Friedman
Milton Friedman on Hong Kong (1998)
Origin of the Methodology of Positive Economics?

On the Origins of "A Monetary History" (via Tyler Cowen)
"This paper explores some of the scholarship that influenced Milton Friedman and Anna J. Schwartz's "A Monetary History". It shows that the ideas of several Chicago economists -- Henry Schultz, Henry Simons, Lloyd Mints, and Jacob Viner -- left clear marks. It argues, however, that the most important influence may have been Wesley Clair Mitchell and his classic book "Business Cycles" (1913). Mitchell, and the NBER, provided the methodology for "A Monetary History", in particular the emphasis on compiling long time series of monthly data and analyzing the effects of specific variables on the business cycle. A common methodology and the stability of monetary relationships produced similar conclusions about money. Friedman and Schwartz deemphasized Mitchell's "bank-centric" view of the monetary transmission process, but they reinforced Mitchell's conclusion that money had an independent, predictable, and important influence on the business cycle."

Some Podcasts

Andrew Leigh interview about Milton Friedman (second item on the podcast)

Interpreting culture
The distinguished American anthropologist Clifford Geertz died last month. This week, we take a respectful but sceptical look at his work, its origins in philosophy and its consequences for philosophy. Savage Minds have more Clifford Geerz.

"Shifting aims, moving targets: on the anthropology of religion"- a lecture by Clifford Geertz

Postmodern Theory

Imps of the Mind Gone Awry: Obsessive Compulsive Disorder
Rituals, checking the stove, repetitive thoughts. Everyday patterns for all of us, but when they go awry, the impact of these imps of the mind is devastating and life-consuming. This week, a provocative theory with new, convincing science - could Obsessive Compulsive Disorder in some children be triggered by a common bout of strep throat? And, nipping the obsessions and compulsions in the bud - one parent's story, and a pilot project already changing the lives of young people plagued by OCD. More links here.

The State of Russia
Professor Christopher Read examines the current state of Russia and its changing political and economic position

Libertarian Paternalism Is Not an Oxymoron
Cass Sunstein, professor of Jurisprudence at the University of Chicago Law School

Anecdotes about Milton Friedman

"Everybody loves to argue with Milton, particularly when he isn't there."
- George Shultz

"Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers."
- Robert Solow

Brad DeLong writes;

“General William Westmoreland, testifying before President Nixon's Commission on an All-Volunteer [Military] Force, denounced the idea, saying that he did not want to command an army of mercenaries. Milton Friedman interrupted him: "General, would you rather command an army of slaves?" Westmoreland got angry: "I don't like to hear our patriotic draftees referred to as slaves." And Friedman got rolling: "I don't like to hear our patriotic volunteers referred to as mercenaries. If they are mercenaries, then I, sir, am a mercenary professor, and you, sir, are a mercenary general." And he did not stop: "We are served by mercenary physicians, we use a mercenary lawyer, and we get our meat from a mercenary butcher"

On responding to criticisms about giving advise to Pinochet regime (Mankiw article on Friedman);

“Friedman was--and is--unrepentant. Of course, he did not endorse the dictatorship. But, he wrote, "I do not regard it evil for an economist to render technical economic advice to the Chilean government to help end the plague of inflation, any more than I would regard it as evil for a physician to give technical medical advice to the Chilean government to end a medical plague." He also notes that years later, when he offered similar economic advice to China, there were no similar protests, even though the left-wing Chinese dictators were no less oppressive than Pinochet.”

Art Diamond recalls;

“One characteristic that came through in class, as well as in his public debates and interviews, was that he was focused on the ideas and not the personalities expressing them. I remember seeing Friedman debating some union official on television. He talked at one point about how he and the official had had to work hard in their youth. Friedman seemed to like the union official; he just disagreed with some of his ideas, and wanted the union official and everyone else, to understand why. By the end of the "debate", the union official had a warm, amused, expression on his face.

I remember once Friedman saying that more of us should speak out more often on more topics; that the bad consequences to us weren't as bad as we supposed. Probably he was right; though he had a lot working in his favor---his quick-wittedness, his good will, his sense of humor, and probably his being so short in physical stature---it was probably hard for anyone to feel threatened by him, so they were more apt to let down their guard and listen to what he had to say.”

John Quiggin has similar views of Friedman;

“Friedman was effective in part because he was obviously a person of goodwill. I never had the feeling with him, as with many writers in the free-market line, that he was promoting cynical selfishness, or pushing the interests of business. He genuinely believed that economics was about making people’s lives better and that disagreements among economists were about means rather than ends and could ultimately be resolved by careful attention to the evidence.”

Thomas Sowell recalls;

“The other side of Friedman was his generosity with his time to help students, and even former students. In later years, long after I had left the University of Chicago, he helped me with his criticisms and advice on my work--only when asked. When I was offered an appointment to the Federal Trade Commission in 1976, he was asked by the White House to urge me to accept but he declined to do so. It was the best non-advice I ever got. I would have been miserable at the FTC.”

Walter Block recollects;

“Another personal recollection. Once, at a Mont Pelerin Meeting, there was a panel discussion entitled “How to win a Nobel Prize in economics. The panelists were James Buchanan, George Stigler and, of course, Milton Friedman. This was pretty fast company. I don’t remember any of the specifics but I remember coming away from that event with the thought that “Milton Friedman is an intellectual tiger,” so overwhelming was he in that discussion.”

Related;

More links at PrestoPundit, Tim Worstall, Aplia blog, Southern Appeal and still more Google Blog search.

Podcasts;

Lucas, of University of Chicago, Discusses Friedman's Economics

Milton Friedman on Money

Friedman on Capitalism and Freedom

Miscellaneous;

How Milton Friedman Changed Economics, Policy and Markets

Milton Friedman- An enduring legacy

The Legacy of Milton and Rose Friedman’s Free to Choose-Economic Liberalism at the Turn of the 21st Century; A Conference Hosted by the Federal Reserve Bank of Dallas

On Milton Friedman's Ninetieth Birthday -Remarks by Governor Ben S. Bernanke

Tennis With Milton

Congestion and Anonymity

Milton Friedman- Money and Economic Freedom

Milton Friedman interview (The Region)

Milton Friedman, a father of financial futures

The Methodology of Positive Economics

My Tribute to Milton Friedman: The Little Giant of Free Market Economics

The World Turner

Milton Friedman, RIP, and inflation targeting

Applying Some of Friedman's Wisdom

Friedman's Sampler

John Maynard Keynes By Milton Friedman

Roofs or Ceilings? The Current Housing Problem

Chart of the Day- Deaths of poor in rich neighborhoods

“By living in a well-to-do neighborhood, poor people increase their risk of death, according to a new study by School of Medicine researchers to be published in the December issue of the American Journal of Public Health.”
- Death rates for poor higher in rich neighborhoods

Via Columbia Sat Blog and Michael Stastny

Here is the abstract of the paper;

Low Individual Socioeconomic Status, Neighborhood Socioeconomic Status, and Adult Mortality;
Objective; We examined whether the influence of neighborhood-level socioeconomic status (SES) on mortality differed by individual-level SES.
Methods. We used a population-based, mortality follow-up study of 4476 women and 3721 men, aged 25-74 years at baseline, from 82 neighborhoods in 4 California cities. Participants were surveyed between 1979 and 1990, and were followed until December 31, 2002 (1148 deaths; mean follow-up time 17.4 years). Neighborhood SES was defined by 5 census variables and was divided into 3 levels. Individual SES was defined by a composite of educational level and household income and was divided into tertiles.
Results. Death rates among women of low SES were highest in high-SES neighborhoods (1907/100000 person-years), lower in moderate-SES neighborhoods (1323), and lowest in low-SES neighborhoods (1128). Similar to women, rates among men of low SES were 1928, 1646, and 1590 in high-, moderate-, and low-SES neighborhoods, respectively. Differences were not explained by individual-level baseline risk factors.
Conclusion. The disparities in mortality by neighborhood of residence among women and men of low SES demonstrate that they do not benefit from the higher quality of resources and knowledge generally associated with neighborhoods that have higher SES.

The Economist of the Century

“Sloppy writing reflets sloppy thinking”- Milton Friedman

Milton Friedman has died.

Condolences to his family- his son David Friedman comments about some of the less well-known contributions of the great economist.

“My first post to this blog, at:

http://daviddfriedman.blogspot.com/2005/12/my-first-post.html

described the superiority of the Chicago style workshop, where the participants are expected to read the paper in advance and the presenter to talk about it for not very long, rather than presenting it, over the more conventional approach. As best I can tell the Chicago style workshop was an invention of my father's.

Long ago I happened to be doing some statistical work, and discovered that my father had a statistical test named after him, a way of doing statistics on ordinal rather than cardinal values—just what, in that project, I needed.

I gather that he was in part responsible for a much more important statistical breakthrough, the idea of using the results of the first N tests to decide whether to do test N+1, instead of selecting the number of tests in advance.”

A comment at Freakonomics blog put it nicely one of the things that I liked about him most;

“What I enjoyed most about him was his ability to frame his arguments objectively as opposed to slinging mud and attacking the character of his opponents in the name of ‘debate.’ To paraphrase Thomas Sowell, it was enough for Friedman to state that his opponents were mistaken and their policies harmful—and why.

His genius was that he was capable of thinking far beyond anyone else yet he was equally capable of explaining economic concepts and ideas in a manner than most any layman could understand. “Free to Choose” lit a fire of interest in economics for me, and had I not read it I doubt I would have returned to college to pursue an econ degree.”

Related;
Obituaries; CATO, NYT, Financial Times, Chicago Tribune, WSG, More at Google News.

Across the blogs; Danish blog, Mahalanobis, Catallaxy, Businomics, The Club for Growth, Jane Galt, Instapundit, Reason blog, Economist’s View, Greg Mankiw, RGE, Robert Lawson, William Polley, Arnold Kling

Podcast- Honoring Milton Friedman

Some of our earlier posts on Friedman;
Learning Economics with Milton Friedman
The Secret of Gary Becker
An Email from the Michael Jordan of Economics

Miscellaneous;
A Charismatic Economist Who Loved to Argue
It's easy to forget how revolutionary they were
Milton Friedman: a study in failure (this person needs a little more enlightening)
When I think of Milton Friedman- Tyler Cowen
Milton Friedman: Entrepreneurial Economist
Iconoclastic economist who put freedom first
Favorite Milton Friedman Quotes
Milton Friedman: An Open Book
Friedman's "last contribution to academia."

From The Economist blog;
"MILTON FRIEDMAN has died. An economics giant, he not only revolutionised monetary theory, but singlehandedly did more than almost any economist in history to advance the cause of free markets. He was not merely an accomplished economist, but an accomplished popular writer; his Newsweek columns remain gems of clarity and brilliance decades later. We will not soon see his like again."

Podcast of the Day- May the Force Be With You

“The New Rules of the Game is a three part in depth look at globalisation what it means and how it has developed. BBC diplomatic correspondent Jonathan Marcus will take us to Europe, the United States, the Balkans, and China, where he investigates globalisation as a force for both good and evil.

In program one, May the Force Be With You, Jonathan Marcus travels to China and the United States to explore the sinews that bind the new globalised world together. He examines what is meant by globalisation; where did it come from and how has it evolved? What is the relationship between technological change and globalisation? Is it really, as its advocates suggest, a force for good? We hear from one of globalisation's greatest advocates Tom Friedman and from one of its fiercest early critics Robert Kaplan.”

Listen to the podcast.

Podcast of the Day- Political Economy of Bad Regulation

Russ Roberts talks with Sam Peltzman at Econ Talk.

Listen to the podcast.

Also have a look at a selection of articles by Tim Harford and Jamie Whyte, a freelance writer published in The Times (London), this year’s Bastiat Prize winners and other finalists.

The Chile Story

The secret behind Chile’s macro-economic stability and robust growth over the past 20 years.

- Strong fiscal discipline. Over the last two decades, only in Chile were years of fiscal deficits roughly offset by years of surpluses; most other Latin American countries displayed a bias toward deficits. Fiscal discipline was reinforced by the introduction of the structural surplus rule in 2000. The reward has been a vastly lower debt-servicing burden, as fiscal discipline resulted not only in lower government debt but also in lower real interest rates.

-A credible inflation targeting framework has helped anchor inflation expectations at a low level. Under this framework, the central bank aims at keeping inflation within a 2–4 percent target range. In recent years, the central bank has also let the peso float freely.

-The financial system was strengthened and capital markets deepened. Financial liberalization was a mainstay of policy reform in Latin American in the 1990s, mainly focusing on deregulation and privatization. Chile took strong actions to strike the right balance of market discipline and sound banking supervision, while its capital market rapidly deepened.

- Trade integration, in conjunction with a broad financial opening, was significant. Chile’s export sector, one of the most open and diversified in Latin America, has proven an important buffer against current account shocks, while also boosting Chile’s growth potential.

- Institutional arrangements were set to create a more certain macroeconomic environment. Sound economic policies and reforms have been carried out within a stable institutional framework to avoid reversals. These institutional arrangements have helped reduced the incentives problems that have led to a lack of fiscal discipline, complex and distorted trade polices, and moral hazards in the financial system see elsewhere in the region.

Source;
Sustaining Latin America's Resurgence: Some Historical Perspectives, Singh, Anoop | Cerisola, Martin D (IMF Working Paper), p.8

Related
Macroeconomic Volatility: The Policy Lessons from Latin America, Singh, Anoop

Occasional Paper No. 231 Chile - Institutions and Policies Underpinning Stability and Growth (June 2004)

The Four Big “I”s needed to achieve growth in Africa

Help a young economist from Romania

Gabriel’s friend is leaving for US and he is asking for some advice on an advanced macroeconomics text book he wants his friend to bring from the states;

“I decided to get Recursive Methods in Economic Dynamics (Stokey, Lucas, Prescott) because, frankly, I need all the help I can get with the math required by most contemporary macro. models. I hope the content is still relevant (I see it’s from ‘89), but even if it’s not 100% up-to-date, I like the authors and I’ll be more than satisfied if I manage to learn everything in there.

Now, for the thornier issue… I can afford another book. And this where you, my loyal audience, come in. Can you suggest a textbook-like volume, which includes as many of the following characteristics as possible?”

Read his entire post.

Related;
Mankiw G.N. (1990) "A quick refresher course in macroeconomics"
Plosser C.I. (1989) "Understanding real business cycles"
Stadler G.W. (1994) "Real business cycles"
Romer D. (1993) "The new Keynesian synthesis"
Blanchard O.J. e L.F. Katz (1997) "What we know and do not know about the natural rate of unemployment"
Thomas J. Sargent’s recommended maths courses at Stanford
Recursive Macroeconomic Theory, 2nd Edition (sample chapters)
Philippon, T., and R. Segura-Cayuela. "Everything You Always Wanted to Know about RBCs but were Afraid to Ask."
Blanchard, O. "What Do We Know About Macroeconomics that Fisher and Wicksell Did Not?"
NBER Papers in Economic Fluctuations and Growth

Quote of the Day- Stocks and flows of economics

“The stock of economic knowledge based on centuries of thinking is great. The flow of new knowledge is meager. Your past coursework was based on the stock. Conferences are based on the flow. So conferences always seem thin cruel compared with well-run courses.”
- Greg Mankiw

Podcast of the Day-The Search for Stability

Ian Macfarlane, former governor of the Reserve Bank of Australia is giving the Boyer Lectures for this year. The focus is macroeconomics titled The Search for Stability.

Listen to the first lecture- The Golden Age
The end of the second world war ushered in an era of incomparable economic growth. In the era of post-war reconstruction the world's developed countries would enjoy a 'golden age' of low inflation and full employment. Guided by the theories of John Maynard Keynes, governments became increasingly confident in how to apply macroeconomic policy. Ian Macfarlane examines why this prolonged stability led some to proclaim that business cycles and recessions were things of the past. By the early 1970s it was clear such optimism was misplaced.

Here is the transcript.

Perspectives on “Dark Matter”

Interesting paper-Statistical Issues Related to Global Economic Imbalances: Perspectives on “Dark Matter”;

“There has been a large amount of recent interest in how the U.S. can be the so-called world's largest debtor nation and at the same time have a persistent surplus on income in its balance of payments accounts. Based on BEA's published data, two factors explain the incongruence -- a difference in the composition of U.S.-owned assets abroad compared to foreign-owned assets in the U.S., and a higher rate of return earned by U.S. investors on their overseas assets, particularly on direct investment, than the rate of return that foreign investors earn on similar classes of assets invested in the U.S. In contrast, some others have recently argued that the explanation for the incongruence is that U.S.-owned assets abroad are undervalued, mainly because large exports of intangible assets by U.S. direct investors to their foreign affiliates have gone undetected. This paper reviews the main points of this argument and discusses some of its implications.”

For more on the issue see Econbrowser

Related;

On the origins of dark matter

You can not put dark matter in a container …

"Global Imbalances or Bad Accounting? The Missing Dark Matter in the Wealth of Nations", Ricardo Hausmann and Frederico Sturzenegger

America's dark materials-The United States' current-account deficit is a figment of bad accounting. If only;

“Most economists conclude that America earns a higher return on its overseas assets (eg, EuroDisney) than foreigners earn on investments in America (eg, Rockefeller Centre). They don their anoraks, immerse themselves in the data and try to work out why this might be so. Messrs Hausmann and Sturzenegger turn the question on its head. It is not the $36.2 billion of income that is the mystery, they say. The anomaly lies in the $2.5 trillion of debt. If America is still coming out ahead of foreigners, then, contrary to popular belief, it must still be a net creditor. America must have more foreign wealth than we can see.

The two authors have borrowed a name for this invisible wealth: dark matter. In theoretical physics, dark matter is the stuff in the universe that we can identify only by its gravitational pull. For the Harvard economists, dark matter is foreign wealth, the existence of which we can infer from the income it provides.”

How many civilians have died in Iraq?

According to Iraqi government official;

"Iraqi Health Minister Ali al-Shemari estimated Thursday that 150,000 Iraqi civilians have died in the war as he spoke to reporters in Vienna. He later said he based the figure on an estimate of 100 bodies per day brought to morgues and hospitals--though such a calculation would come out closer to 130,000. However, the head of Baghdad's central morgue said his facility alone was receiving about 60 bodies a day as a result of violence."

Related;
Good News for Bush- from The Economist blog- also have a look at their spreadsheet
On Whose Authority
Can we accept Lancet’s result without accepting their number
The cost of Chaos
Drowning by Numbers
Estimating Iraq deaths using survey sampling

Reality checks: some responses to the latest Lancet estimates
Tyler Cowen on the Lancet study
Daniel Drezner on the study

Further readings on the Iraqi excess deaths study
Dangerous Statistics: Estimating Civilian Losses in Afghanistan
Iraqi Death Toll Exceeds 600,000, Study Estimates

Home Fronts: Iraq (podcast)
Terry Lane talks to Patrick Cockburn and Zaki Chehab, two journalists who have recently published books about Iraq-Patrick Cockburn,Middle East correspondent for The Independent and Zaki Chehab, London Bureau Chief, Al Hayat-LBC TV

Iraq’s healthcare system rapidly deteriorating
Sex traffickers target women in war-torn Iraq
Paintings of Abu Ghraib shunned in US

*FERNANDO BOTERO painting on Abu Ghuraib above

Not all breast-feeding is equal

Is breast-feeding worth it;

“Let’s be honest: if the only adverse consequence of not nursing is that babies get a few more colds, we could leave the decision making to the parents. The real question is whether there are dangerous or potentially long-term damaging illnesses (such as ear infections that lead to hearing loss) for babies who aren’t nursed versus babies who are. And how long (or how much) should a baby be nursed in order to keep his or her risk down?

One of the big problems in trying to assess this question is that not all nursing is equal. There are mothers who nurse exclusively, mothers who use expressed breast milk (delivered in bottles), mothers who freeze milk, or use pasteurized (donated) milk, or use some breast milk and some formula, and a combination of all of the above.

Then there are the babies, some of whom are premature, or have low birth weight, or have other health issues that could make nursing harder; there are some babies who are nursed until they are four-years old, and others who nurse until they are six-weeks old.

Finally, we must add a complicating factor that it’s virtually impossible to carry out the gold standard of research on this issue – a randomized controlled study in which mothers are randomly assigned whether to nurse or not. Our observational power may also be limited; at least in principle, because women (and families) who nurse are not the same as those who don’t, making any comparison of the outcomes extremely difficult.”

For a lay person’s guide to how economists think about such issues read, Trade-Offs: An Introduction to Economic Reasoning and Social Issues by Harold Winter.

Here’s a review of the book at Newmark’s Door.

Danish Flexicurity Model

Latest IMF Survey summarizes the features of the Danish Flexicurity model of its labour market - a uniquely Danish blend of a flexible labour market, generous social security and an active labour-market policies;

• Labor market flexibility. Measured by how restrictive employment protection legislation is, the Danish labor market is more flexible than that in many other European countries. In practice, this means that Danish employers, both in the public and private sectors, can lay off workers rather easily. This is not a novel aspect of the Danish social system— protection against dismissal has historically been low, a feature that has been linked to the country’s openness and its many small and medium-sized enterprises.

• An extensive social safety net. Danes enjoy a high level of social protection, including generous unemployment benefits. The average net replacement rate (what people receive from the state when they lose their jobs, calculated as a percentage of their salary) is about 80 percent, among the highest in Europe.

• Active labor market policies. A large variety of labor market programs facilitate and encourage reintegration of the unemployed into the labor market. But these programs are expensive. As a result, Denmark is at the top in terms of its per capita spending on labor market programs.

Related;

Denmark's flexicurity model: ready for export?

Flexicurity - a working model for Europe?

Flexicurity

Denmark's Overrated "Flexicurity"

Flexicurity research papers

Denmark: Selected Issues (IMF)

The most successful society the world has ever known

The Swedish model

Ideology over facts

Danish for all? No thanks, says IMF

The most important thing Edmund Phelps learned?

An interview with Edmund Phelps;

"The most important thing I've learned about how markets work or how economies work? …Offhand I can't think of the most important thing that I've learned. Maybe it is that when I was starting out in the subject I had little sense of the uncertainty under which the economic actors in the economy have to operate. I was very much under the influence of textbook models that I'd been studying in college and in graduate school, and it's only very, very slowly over decades and decades that my conception of what a healthy market economy is all about has developed. So I think maybe that's the biggest thing I've learned, is that the future is highly uncertain, the start-up entrepreneurs and even the CEOs and the established companies are aware of the uncertainties, financiers are aware of these uncertainties, everybody acts accordingly, and that makes the economy quite different from the way it is still described in the textbooks."

Listen to the podcast.

Related;
Some of the articles by Edmund Phelps in the Wall Street Journal- Dynamic Capitalism, Remedies for New Orleans, The Way We Live Now, Crash, Bang, Wallop, False Hope for the Economy – and False Fears, Scapegoating the Natural Rate

His columns at Project Syndicate

The Economic Performance of Nations:Prosperity Depends on Dynamism, Dynamism on Institutions (working paper)

Phelps work explained- Tyler Cowen, Aplia blog and The Economist

This Nobel Prize Sends a Stark Signal to Columbia

The Debates

Miscellaneous interesting links;

Bastiat vs. Krugman

Will Microcredit reduce poverty

Philanthropy Smackdown-GOOGLE VS. GATES

Citywide Minimum-Wage Rules: Living Wages or Killing Jobs?

Department of Economic Illiteracy: Special Victim's Unit

Aid: Can It Work?

Should we abolish the IMF?

Drink to success?

'A man with little sympathy for other faiths'
See a response at TCS; The Pen, the Sword and the Pontiff

Marriage and Coal Mining

Poverty is so Hot for Fall (and Why That's a Good Thing)

Making tracks through policy space

Podcast of the Day- Doing Business 2007

Book forum from Cato is now online How Nations Prosper: Economic Freedom and Doing Business in 2007;

“Nations that are more economically free outperform less free nations in growth and levels of prosperity. James Gwartney, coauthor of the annual Economic Freedom of the World report, will review current trends and the latest research on the impact of regulations, the rule of law, and other aspects of economic freedom on the whole range of development indicators. Simeon Djankov will show how excessive bureaucratic procedures and government fees make it prohibitively expensive for the world’s poor to join the formal economy. Reform can make it easier for entrepreneurs and businesses to create wealth. Djankov will show which countries are making progress, how they are successfully reforming, and the potentially large growth opportunities they can expect.” Listen to the podcast.

Related;
Simeon Djankov and the Doing Business Database
Discussing Doing Business
The Road Less Traveled of Business Regulatory Reform

Free the World

Related;
Read My Lips

Podcasts –Heavy Weight Economics

Steven Levitt and Malcolm Gladwell at TED

Economics of Paternalism- Edward Gleaser (at Econ Talk)

Econospinnings

John Quiggin at Business Matters

The greatest gift
Donating your body, or the body of a child, to medical research is a great gift to mankind. Most of you can be recycled: your eyes, your skin, your bone or even a little piece of your heart. Now they want to grind your bones for surgical putty. Then, your dead bits will be helping a biotech company's bottomline too. Can altruism and commerce live side-by-side when it comes to giving "the greatest gift of all"?

Dr. Diane Coyle discusses with James Reese several of her books and her recent research on mobile phones in Africa. Books include Paradoxes of Prosperity, The Weightless World and her bestseller Sex, Drugs and Economics. The Soulful Science will be published by Princeton University Press in spring 2007. Listen to the podcast.

See also her book recommendations

Pocket Guide to Asian Think Tanks

From Asian Development Bank Institute;

“This is a handy guide to the leading Asia-Pacific think tanks working on development and economics. Each entry
- provides web links to the think tank and its research staff,
- describes the current research program,
- lists if visiting researcher or internship programs are offered, and
- states whether online publications are freely available."

Related; Think Tanks and Policy Advice in Countries in Transition

Events, Interviews, Discussions- Making Globalization Work

Making Globalization Work; Lee C. Bollinger, Tina Rosenberg, Nancy Birdsall, George Soros, and Joseph E. Stiglitz discuss solutions for some of the world's most pressing problems, such as debt, unfair trade, the "resource curse", the need to curb harmful emissions and world poverty at Columbia University.

Clinton Global Initiative 2006

IMF-World Bank Program of Seminars at annual meeting –Singapore (not yet online)

New Foundations of Cost-Benefit Analysis (not yet online)

How Nations Prosper: Economic Freedom and Doing Business in 2007 (tomorrow)

James Galbraith, an economist at the University of Texas, talks on the outlook for the U.S. economy (podcast)

Related;
Discussions about the IMF-World Bank annual meetings issues at PSD Blog;
Private sector public goods
Business takes on the poverty penalty
Can the World Bank fight corruption?
Economists debate financial sector in India and China
Reforming collateral laws

Roubini has a couple of posts on the IMF-World Bank annual meeting

FT Interview with Clinton

FT special coverage of Clinton Summit

The latest Foreign Exchange show;
“The World Bank and the IMF are getting together for their annual meeting in Singapore. This year it's not just talk of exchange rates and balance of payments - the United States is pushing hard to give greater weight to Asian and other emerging market economies. To help us understand the dynamics at play, we're joined by Zanny Minton-Beddoes, Washington Economics Editor from The Economist.”

Ideological Amplification

From Cass Sunstein, an interesting study;

“A few years ago, I was involved in some studies that uncovered a funny fact: When Republican-appointed judges sit on three-judge panels with other Republican appointees, they show unusually conservative voting patterns. So too, Democratic-appointed judges on three-judge panels show especially liberal voting patterns when sitting with fellow Democratic appointees. In short, like-minded judges show a pattern if "ideological amplification."

The presence of even one Republican appointee often makes Democratic appointees much more moderate. Republican appointees often become much more moderate when even a single Democratic appointee is there.

We now know that ideological amplification is pervasive on federal courts--that it can be found in numerous areas, including sex discrimination, affirmative action, campaign finance law, disability discrimination, environmental law, labor law, and voting rights.

It turns out that ideological amplification occurs in many domains. It helps to explain "political correctness" on college campuses--and within the Bush administration. In a recent study, we find that liberals in Colorado, after talking to one another, move significantly to the left on affirmative action, global warming, and civil unions for same-sex couples. On those same three issues, conservatives, after talking to each other, move significantly to the right.

It's unclear whether anything can be done about ideological amplification. But it's entirely clear that when private organizations and governments blunder, ideological amplification is often the culprit.”

Related;
Watch his book presentation at AEI-Brookings; Infotopia: How Many Minds Produce Knowledge
Deliberation and Infotopia
Ideological amplification

Un-Atlantic Economic History from Brad de Long

Brad de Long is running a list of useful economic history books which are not biased towards North America;

Fernand Braudel, The Structure of Everyday Life (Civilization and Capitalism: 15th-18th Century)

Janet Abu-Lughod, Before European Hegemony: The World System A.D. 1250-1350

K.N. Chaudhuri, Trade and Civilisation in the Indian Ocean: An Economic History from the Rise of Islam to 1750

Tirthankar Roy, The Economic History of India 1857-1947

Some books commentators added;

Brook, Timothy. (1998) The Confusions of Pleasure: Commerce and Culture in Ming China. Berkeley: University of California Press.

Ian Brown, "Economic Change in South-East Asia, c.1830-1980." (1997, Kuala Lumpur: Oxford UP)

Reid, Anthony ed. Slavery, Bondage and Dependency in Southeast Asia. 1983.

Adas, Michael. The Burma Delta: Economic Development and Social Change on an Asian Rice. Frontier, 1852-1941. Madison: University of Wisconsin Press. 1974. .

The Eastern Origins of Western Civilisation By John M. Hobson

The Great Divergence: China, Europe, and the Making of the Modern World Economy
By Kenneth Pomeranz

China Transformed: Historical Change and the Limits of European Experience By Roy Bin Wong

Nils Jacobsen 'Mirages of Transition: the Peruvian Altiplano 1780-1940' (Berkeley: University of California Press)

Anand Yang's _Bazaar India: Markets, Society, and the Colonial State in Gangetic Bihar._ (Berkeley, Los Angeles, London: University of California Press, 1998; New Delhi:

Victor Lieberman (2003) Strange Parallels: Southeast Asia in Global Context, c. 800-1830,

Abu-Lughod, Janet L., editor Sociology for the Twenty-first Century: Continuities and Cutting Edges

The Human Web: A Bird's-Eye View of World History

T'Ang China: The Rise of the East in World Historyby Samuel Adrian M. Adshead

An Ottoman Tragedy: History and Historiography at Play
By Gabriel Piterberg

See also;
Why China Stagnated -- Economic History As Lesson
Why Europe and the West? Why Not China?
The World's First Corporations
History of the World in Seven Minutes

Blogs- Book Pundit, Civilisation Pundit,

World Economic Outlook- podcasts

Saul Estrin, professor of management and head of the department of management at the London School of Economics and Political Science, talks with Bloomberg's Tom Keene from London about the study of economics and its impact on managers, the outlook for emerging-market economies, and the differences in productivity and lifestyles between the U.S. and Europe. Listen to the podcast.

Lord Meghnad Desai, a professor of economics at the London School of Economics, talks with Bloomberg's Tom Keene in London about the outlook for the Group of Seven nations, the impact of globalization on the world's economy and U.S. foreign policy in the Middle East. Listen to the podcast

A discussion with Pam Woodall, Asian Economics Editor of The Economist;“World growth, world inflation, world interest rates, wages, profits, oil prices and even house prices are all now being influenced by China, India and other developing economies”

World Economic Outlook press conference -webcast
or read the transcript of a Press Conference on the World Economic Outlook Report (Singapore, September 14, 2006)

Karl P. Sauvant discusses with James Reese "World Investment Prospects to 2010: Boom or Backlash?" a joint report from the Economist Intelligence Unit and the Columbia Program on International Investment

Can the IMF Avert a Global Meltdown?- Keneth Rogoff

See also Economonitor blog. Also Nouriel Roubini's Blog- has a couple of recent posts on the IMF annual meetings in Singapore

More readings on the world economic outlook

Podcasts of the Day

Radical Islam in Pakistan; For years there has been debate over Pakistan's role in international terrorism. What is the link between Islamic extremism and Pakistan and when and how did it emerge? Guests include Hussain Haqqani, Associate Professor of International Relations, Boston University, Samina Yasmeen, Senior Lecturer in Political Science and International Relations,University of Western Australia and Ahmed Rashid, Correspondent with The Far Eastern Economic Review

Islam in the Renaissance; Between the 15th and 16th centuries, the European Renaissance generated scientific breakthroughs including the discovery by Copernicus that the Earth revolves around the Sun. The progress in scientific thought has been attributed in part to the translation of Arabic texts into Latin. However, Professor George Saliba argues that crucial information was contained in texts that were not translated, so how did Copernicus know about them? Guest on the show George Saliba, Professor of Arabic and Islamic Science at Columbia University in New York.

The history of scientific discoveries

Peace by Artful Means
In societies fractured by violence, family conflict and global threats of terrorism, how do we encounter 'the other' in ways which build sustainable peace? From the growing practice of mediation to the global art of hip hop, this Encounter explores the role of creativity in transforming conflict

Regaining confidence in western culture

All the podcasts from Radio National’s shows.

A Concept Map of Microsoft Office 2007

A cool concept map of MS Office 2007 resources by MS Office evangelist, Don Campbell.

Recent Publications from IMF

Some recent publications from the IMF which are well worth a read;

Global Financial Stability Report- Market Developments and Issues

World Economic Outlook-Financial Systems and Economic Cycles
(analytical chapters)

Doha Development Agenda and Aid for Trade; “This paper summarizes recent developments in the Doha Round negotiations, and aid for trade. As requested by the Development Committee last September, it reviews existing mechanisms for cross-country and regional aid for trade needs. It proposes possible options to overcome the coordination and capacity problems affecting regional cooperation.”

Corruption and Technology-Induced Private Sector Development; “This paper asks whether corruption might be the outcome of a lack of outside options for public officials or civil servants. We propose an occupational choice model embedded in an agency framework to address the issue. We show that technology-induced private sector expansion leads to a decline in publicly supplied corruption as it provides outside options to public officials who might otherwise engage in corruption. We provide empirical evidence that strongly shows that technology-induced private sector development is associated with a decline in aggregate corruption. This suggests that the decline in publicly supplied corruption outweighs the potential increase in privately supplied corruption that could result from private sector expansion.”

Insuring Public Finances Against Natural Disasters--A Survey of Options and Recent Initiatives; “Natural disasters can put severe strain on public finances, in particular in developing and small countries. But catastrophe insurance markets increasingly offer opportunities for the transfer of such risks. Thus far, developing countries have only tepidly begun to tap these opportunities. More frequent and intensive use of insurance markets may be desirable because it could help introduce an important element of predictability in the post-disaster public finances of disaster-prone developing countries. Against this background, the paper surveys the various available insurance modalities and reviews recent initiatives in developing and emerging market countries. It also identifies some key challenges for the insurance community, donors, and international financial institutions (IFIs).”

Prospects for the World Economy-address By Rodrigo de Rato
Economic Policies and Global Prosperity: Challenges for Asia and the IMF- address by John Lipsky

Latest IMF survey

For comment; Why can’t the international financial institutions release a joint economic outlook? IMF deserves credit for putting online most of its publication unlike the OECD, World Bank, or the ADB.

Related;
Chief Economist Jean-Philippe Cotis, OECD on their recent assessment of economic outlook (podcast)
Asian Development Outlook 2006 Update
Labor Markets in Asia: Issues and Perspectives, recent publication of ADB-not available on the web.

Some Podcasts

The history of scientific discoveries; The author of a book called 'Who Discovered What When', David Ellyard, discusses the history of discoveries in science

TCS podcasts- the latest is with Dierdre McCloskey

Regaining confidence in western culture

Reforming Public Services

Facing the evidence - part one; Only one in two patients receives the healthcare they should receive according to the evidence. One in ten patients receives care that isn't recommended and which is potentially harmful. In the first part of this series about getting health professionals to practice with evidence, Associate Professor Alex Barratt takes a close look at the catastrophic errors that have occurred when evidence has been ignored, and why evidence based practice is still not being implemented in consultation rooms near you. Read the transcript.

Drug-driving; why Australia is the world's leader when it comes to random saliva drug testing for drivers

Free Gardeners, Odd Fellows and Druids: a history of health insurance in Australia

Celebrating 50 years of television

Gaia and accelerating climate change; It was in the late 1960s that James Lovelock first suggested the Earth acted as a single organism. He named his observation, Gaia. He was ridiculed and the idea was ignored for decades. It wasn't until the end of the 90s that a new branch of science grew out of his theory; that of Earth System Science. Now, as the effects of climate change have become obvious for all to see, James Lovelock has taken his theory further in a book, The Revenge of Gaia. Lovelock claims we've passed the point of no return with climate change.

Peter Singer, Professor of Bioethics at Princeton University, debates his views on life and death with a panel of experts

How can we resolve the tensions between the different communities in Europe in the light of the growing threat from Islamic extremists, sometimes dubbed the 'Enemy Within'? Hisham Hellyer is a policy analyst, academic and commentator, based at the University of Warwick as an Associate Fellow, the American University in Cairo as a Visiting Professor and Trinity College in Dublin as a Senior Research Fellow. His research interests include European Muslim communities, the interplay between Islam and modernity, European social policy and political philosophy. In his latest book on European Muslims (due to be published by IB Tauris in March 2007 under the title of ''Islam in Europe: Multiculturalism and the European 'Other'), he argues that Europe must come to terms with all of her history, past and present, and that Muslim communities should work to be integral to, rather than simply 'integrated' parts of, Europe.

History of Israel-Palestine conflict

Globalization’s Assassin

A discussion with senior World Bank economist, Branko Milanovic, who says there are growing fears in both rich and poor countries about the impact of globalisation. He shifts the focus from economics to migration - from the movement of goods and services to the movement of people. The real hot-spot, he says, is Europe, where the fear of job losses to low-pay countries, coupled with ethnic and cultural dilution from immigration, will rock Europe's welfare state economy to its foundations. Listen to the podcast from Late Night Live, Radio National.

related;
Branko Milanovic's posts
Why Globalization Is in Trouble, Part 1 and Part 2
Worlds Apart: Book Discussion
THE THREE CONCEPTS OF INEQUALITY DEFINED
Branko Milanovic columns at Project Syndicate
What Can Foreign Aid Do For the World’s Poor?
Martin Wolf’s Forum on Globalisation
Income Distribution and Trade Policy
General and Conceptual Discussions of Poverty, Inequality & Globalization
Explaining the Gains from Globalization
Inequality around the world

Podcast of the Day- Diplomats and Parking fine corruption

The Case of the Unpaid Parking Ticket- podcast of the Tim Harford article in Slate.

Or listen to a Tim’s interview discussing the issue online;

“There's a depressing conclusion and there's an optimistic conclusion. The depressing conclusion is there's nothing you can do about corruption because, well, you know, these guys from Chad and Bangladesh, they're just corrupt. That's what a lot of people, I think, have read this paper and thought that. But I take a different view. Because there's a kicker right at the end of the paper, which is what happened when the law changed. There was the Clinton-Schumer Amendment in 2002. It meant that, OK, you couldn't fine people for committing parking violations. But you could, and you would, tow their cars. And you would actually deduct the parking fines from each country's allocation of foreign aid. So they really started to take a stand on this.

And guess what? Personal morality matters, but enforcing the law matters, too. Because when the amendment was passed, all of these parking violations, by all of these ambassadors, immediately fell by 90 percent. So there is hope for improving the world and stamping out corruption after all.”

There was an interesting letter in this week’s The Economist;

“SIR – In international events bronze medallists usually get little attention (“A ticket for corruption”, August 12th). However, when describing a new corruption ranking based on parking violations by UN diplomats you singled out Chad, the third-highest offender, and ignored Kuwait, the gold winner, which had twice as many infractions. I take solace in finding that my country's diplomats committed zero violations. Manuel Navas, Bogotá, Colombia”

Related;

Diplomats and parking fines;

“A study* by Raymond Fisman and Edward Miguel, economists at Columbia University and the University of California, Berkeley, gives a rare picture of how people from different cultures perform under new cultural norms. For instance, between 1997 and 2002 diplomats from Chad averaged 124 unpaid parking violations; diplomats from Canada and the United Kingdom had none. The results from 146 countries were strikingly similar to the Transparency International corruption index, which rates countries by their level of perceived sleaze. In the case of parking violations, diplomats from countries with low levels of corruption behaved well, even when they could get away with breaking the rules. The culture of their home country was imported to New York, and they acted accordingly.

The same applied to high-corruption countries. Their diplomats became increasingly comfortable with parking where they liked; as they spent more time in New York, their number of violations increased by 8-18%. Overall, diplomats accumulated 150,000 unpaid parking tickets during the five years under review.

Yet any moral superiority New Yorkers may feel should be tempered by the behaviour of the American embassy in London. Last year, embassy staff stopped paying the congestion charge—now £8, or over $15—for bringing cars into central London. The growing pile of unpaid charges now stands at $716,000.”

Blogs discussing the above paper; PSD blog, Marginal Revolution, Healthcare Economist

How Did Suharto Steal $35 Billion?

Why Is Chicago So Corrupt?

UN Diplomats Owe $18 Million in Parking Tickets

In The Economist this Week: Katrina, FEMA, and Corruption

The Oil-for-Food Scandal

Adventures in Cheating-A guide to buying term papers online

Some recent columns of Tim Harford;
Explaining the huge rise in teen oral sex
'Product sabotage' helps consumers
Overpaid, underworked and in charge

Good Inaugurals

The John Curtin Institute of Public Policy has just established the journal Public Policy.

Via Andrew Leigh

Good Magazine- your subscription money goes to a charity of your choosing. See Jeffrey Sachs article and their blog.

Via Pienso

Asia's Economic Success- Perspiration or Inspiration?

“For China and India, where the typical citizen is still a farmer and not an assembly line worker or a call center employee, continued productivity growth will come from the shift out of agriculture, but because a substantial portion of the population will still be employed in agriculture in these poor Asian economies for some time, an important objective of policy should be to improve agricultural productivity. For the richer Asian countries, the typical worker will increasingly be a stockbroker or a shop assistant, not a manufacturing worker. The focus there should be on improving service sector productivity. The problem here is service sector productivity has been trending downwards. Again, while governments should create an enabling environment for productivity growth by providing citizens broad-based access to education and finance as well as securing private property, they should also open to agriculture and services, especially open these to foreign competition as well as to domestic competition, so that these sectors have the same chance to generate the strong productivity growth that manufacturing has done in much of Asia.”

- Raghuram Rajan, Economic Counselor and Director of Research,IMF
Press Briefing on the Analytic Chapters of the World Economic Outlook

Podcasts Carnival

Dr Karl Sauvant - World Investment Prospects to 2010: Boom or Backlash? (Radio Economics). Here is special edition of the report

Jospeh Stiglitz: making globalisation work; Nobel Prize winning economist Joseph Stiglitz has written a follow-up to his best-selling book "Globalisation and it Discontents" which looks at the current problems with globalisation and the forces of reform at work. Related posts by Tyler Cowen on Making Globalization Work, or Joe Stiglitz watch, part II and Joe Stiglitz watch

Sri Lanka; With violence once again erupting in Sri Lanka, Rear Vision traces the historical roots of the conflict. Guests include Jonathan Spencer, Professor of Anthropology of South Asia , University of Edinburgh, Dr. Jayadeva Uyangoda,Professor and Head, Department of Political Science and Public Policy, University of Colombo, Dr. Paikiasothy Saravanamuttu, Executive Director of the Centre for Policy Alternatives, an independent, nonpartisan, public policy centre with a focus on peace and governance, Colombo

Books That Shook the World - Plato's Republic

Anthony Arnove; The Logic of Withdrawal

Christopher Scanlon on The Joint Strike Fighter

Australia and the nuclear renaissance; Nuclear is back. Australia, with its abundant ore and 'good guy' status could become a key member of the uranium enricher's club. But what would the neighbours think? And how would the twin threats of weapons proliferation and waste disposal be addressed?

John Mortimer (Edinburgh International Book Festival)

Polash Larsen's review of Londonstani, by Gautam Malkani

Engineering wonders: tunnels and bridges

Pharmaceutical design

Over-fished or over-regulated?; According to marine biologist Dr Walter Starck, Australia has the most over-managed, heavily restricted and least productive fishery industry in the world. He'll be speaking at the upcoming Australian Environment Foundation inaugural conference. We're also joined by chair of the foundation, Don Burke, to hear why Australia needs another environment group.

Guantanamo on stage

Australia On The Map Part One: The Siren South; This is the first program in the Australia On The Map series, exploring early Dutch exploration of the Australian coastline. This year marks the 400th Anniversary of the first mapping of our northern coastline by Dutchman Jan Lodewijkszoon van Rosingeyn and the crew of the Duyfken

Jess Adkins has a lab full of cucumbers made of stone. They are, in fact, drill cores of corals from all over the world. He analyses these with surprising results, getting a remarkably accurate story of past climates going back thousands of years. This young professor from Caltech (the California Institute of Technology) has some amazing stories to tell of adventure and exploration

Jane Goodall is one of the best-known observers of animal behaviour. She revolutionised the field in the 1960s by watching chimpanzees in the wild. What now does she make of their relationship with humans? And what are their prospects? Will they really become extinct outside zoos within a generation?

Lee Edwards; BP now stands for Beyond Petroleum. The company says it is proud of its diversification from fossil fuels. But will solar be enough to make a difference? Dr Lee Edwards runs BP's solar research from his base in Chicago and he foresees cities which are self-reliant through the sun and alternative sources rather than through a dependence on oil. But will BP withstand competition from less green rivals?

Western Democracies and Voter Cynicism

Derek Denton: The Dawning of Consciousness

Muslim feminism

Teachers and Performance Pay
featuring Andrew Leigh, Economist,Australian National University Co-author of "How and Why has Teacher Quality Changed in Australia?"

Why teach grammar in school?

Anyone who had a heart would know their own language; Another chance to hear virtuoso grammarian Geoff Pullum on the logic of standard English usage...as described in The Cambridge Grammar of the English Language.

Cliches: are they worthless? The poet Chris Wallace Crabbe on the brass razoos in the currency of conversation.

The quality of public debate

Media and governments

Climate change; Dr Barrie Pittock of the CSIRO talks about climate change and risk management and what to do about climate change

The David Hicks Case; Former attorney-general Kep Enderby QC looks at the imprisonment of David Hicks at Guantanamo Bay

Tea with Glen Matlock; The confessions of a middle aged Sex Pistol.

Rebuilding Lebanon

Michael Whelan, S.M.; He helped found Spirituality in the Pub, a network of groups across Australia that meet to discuss all kinds of spiritual issues with the aim of deepening faith and transforming lives. For Michael Whelan, a priest in the Society of Mary congregation, conversation is a vital instrument of change, and he talks about his own spiritual development away from moralism and toward mysticism

Bad Hair day: principles and politics in international cricket

Africa's struggle for political evolution

Middlebury "Symposium on Terror and Mass Media" sessisions;
Douglas Birch, Baltimore Sun Correspondent on The Politics of Terror

The Media's Role in Promoting or Fighting Terrorism
Ahmed Abdella, Senior producer and reporter for Al- Arabiyya Television

Is Terrorism Challenging Press Freedom?
Pierre-François Mourrier, director of research for the Office of the French President

Non-proliferation of Weapons of Mass Destruction
Hans Blix, Chairman of the WMDC (Weapons of Mass Destruction Commission) addresses a conference at the Fletcher School, Tufts University

James Madison and the Spirit of Republicanism
Colleen Sheehan, Villanova University

Schiavo and the Shibboleth of Privacy
Daniel N. Robinson, Oxford University; Georgetown University

John Marshall and the Myth of Marbury
Robert Lowry Clinton, Southern Illinois University-Carbondale

Lessons from the Lincoln Administration for the War on Terror
Michael Stokes Paulsen, University of Minnesota Law School, on "The Emancipation Proclamation and the Commander-in-Chief Power: Lessons from the Lincoln Administration for the War on Terror

Media Coverage of Climate Science: Broader Lessons for Science Journalism? (VIDEO)

Nature podcasts; Male infertility, Bird flu's structural secrets and silent spread, cryptic Martian spots explained, the ethics of egg donation, Warmth-seeking bees, Poincaré unpickled and more

National Geographic Podcasts, National Geographic World Talk

Scientific American podcasts, Science Talk episodes

Naked Scientist podcasts

Equality of opportunity among states

Robert H. Wad reviews Economic Justice in an Unfair World: Toward a Level Playing Field by Ethan B. Kapstein;

“Focusing on poverty is inadequate, Kapstein argues, because it does not put relations between states front and center. "It is governments," he writes, "that sign treaties and agreements, impose sanctions and boycotts, and make war and peace, and it is governments that -- for good or for bad -- are ultimately accountable for their actions at home and abroad." In other words, a theory of global distributive justice must emphasize relations between states and the kinds of economic arrangements states subscribe to. Individuals are not the only moral agents; states are also moral agents, with duties and responsibilities to one another as well as to their citizens.

Kapstein's goal is to present an alternative framework of global justice, one that centers on equality of opportunity among states. He refers to this framework as "liberal internationalism" and calls for an international economic system that is "inclusive, participatory, and welfare-enhancing for all." This order, Kapstein writes, "would give the smallest and poorest states greater voice in the system than they have at present," including in the governance of international organizations.

Building on the work of the political theorist Charles Beitz, Kapstein distinguishes two different social compacts: the domestic one between a state and its citizens, which expresses a society's basic principles of economic justice, and an international one among states, which determines the context in which countries pursue their domestic compacts. Some theorists of international relations hold that relative power, especially military power, shapes the international compact entirely. But Kapstein points out that powerful states do not always operate with a bit-better-than-the-law-of-the-jungle morality. In fact, they often forgo immediate relative gains in the interest of building a system of interactions that all participants view as reasonably fair. The resulting stability of expectations brings benefits for powerful states while increasing the common good. By way of evidence, Kapstein cites studies of the Tokyo and Uruguay Rounds of trade negotiations finding that the most powerful countries did not press their full advantages. Steered by the goal of promoting greater market access for all countries, they gave up more than they got.

The social arrangement that, in Kapstein's view, guarantees inclusiveness and participation and is "welfare-enhancing for all participants" is a global regime of free trade. In other words, free trade is the social arrangement that has the potential to best achieve justice in interstate relations and to fulfill each state's domestic social compact.

Kapstein believes that free trade can generate the highest attainable economic growth -- because it maximizes the scope of opportunity and equalizes opportunities for all potential participants -- and that high economic growth is good for the poor as well as the nonpoor. But he is also aware that despite the expansion of free trade, the growth rates of poor countries have not converged with those of rich countries, as free-trade advocates had predicted they would (the experiences of East Asia and, more recently, South Asia notwithstanding). Some of the continuing disparity -- owing to persistent low growth in a majority of poorer countries -- results from domestic politics and policies and from geography. But a good part, Kapstein argues, is due to the fact that rich countries have rigged the trade regime; far from being a level playing field, it is distinctly tilted against producers in poor countries…”

Via Peinso- a cool new development issues blog.

Watch or listen book event featuring Kasptein and Deepak Lal at Cato.

Related;

Excerpt from the Book, and Chapter 1 of the book

Daniel Dreszner’s short review of the book

Interesting papers by Ethan B. Kapstein;
The Economics of Young Democracies: Policies and Performance
Behavioral Foundations of Democracy and Development
The Political Economy of International Cooperation: A View From Fairness Economics
A Global Third Way Social Justice and the World Economy
Models of International Economic Justice

The Case for Open Industrial Policy- webcast of an event featuring Robert Wade

Morality and Capitalism

The Truth about Globalization and Inequality

Globalization is Working?

Mean Republicans and Median Democrats

The latest column of John Allen Paulos’, “Who’s Counting:It's Mean to Ignore the Median”;

“Believe it or not, the difference in the way the Democrats and Republicans react to the performance of the U.S. economy is clarified by a mathematical distinction studied in elementary school. The distinction is between the mean, which the Republicans emphasize, while the Democrats prefer the median. Before turning to the economy, let me review a little fourth-grade arithmetic….

The relevance of this distinction is apparent in the just-released figures on the U.S. economy for 2004, the latest year for which there is complete data. The Republicans chortle that the economy grew at a healthy rate of 4.2 percent. (It's slowed since then.) The Democrats point to data from the Census Bureau for the same year (and earlier as well), indicating that the real median family income fell and that poverty increased…

Still, this lopsidedness is neither necessary nor inevitable, and it bodes ill for civil society. Almost 2,400 years ago Aristotle, seeing the discord between ancient Greece's rich and poor, applied his idea of the golden mean to call for an equitable (but not equal) income distribution. For purposes of stability, he favored establishing a strong middle class and government policies to assist in this establishment.

A little game from the field of behavioral finance illustrates the class resentment Aristotle described. The so-called "ultimatum game" generally involves two players: One is given a certain amount of money, say $100, by an experimenter, and the other is given a kind of veto. The first player may offer any nonzero fraction of the $100 to the second player, who can either accept or reject it. If he accepts it, he is given whatever amount the first player has offered, and the first player keeps the balance. If he rejects it, the experimenter takes the money back…”

Podcast of the Day-Crisis of Abundance

Crisis of Abundance: Rethinking How We Pay for Health Care- Arnold Kling’s book presentation at Cato;

“If you follow the video or audio all the way through to the Q&A, you will hear a Congressional aide's rant against economic analysis of health care. I chose not to respond, and I think that was the right choice. The book explains why health care is an economic issue, and I would leave it at that. Frankly, I thought that the audience Q&A did not add much. Just as with comments on blog posts, the first one often sets the tone, so that it's important to get a good question first.”

Listen to the podcast. Here is a discussion of the book at Tech Central Station. Also a Cato interview Arnold Kling.

Related:
Podcasts; Cogan on Improving the Health Care System, The Economics of Medical Malpractice
Sylvia Allegretto, an economist at the Economic Policy Institute and author of "The State of Working America," talks with Bloomberg's Tom Keene from Washington about her analysis of the U.S. labor market. Listen to the podcast.

Dead Meat is a 25 minute short film which shows the reality of health care under Canada's socialized medical system
Economics of Obesity
In praise of US health care
Unhealthy America
Charlie Rose interview with New York City Commissioner for Health & Mental Hygiene, Thomas Frieden
Economics of Health Care posts at Econlog, Economist’s View, Café Hayek, Marginal Revolution
Healthcare Economist blog
Health Courts: Exploring the Concept
The Health Report- podcasts from Radio National.
Voluntary C-Sections Result in More Baby Deaths
Health Care Costs

Health Financing Revisited: A Practitioner's Guide
Health Insurance in Francophone Africa

GAO reports;
Hispanic Access to Health Care: Significant Gaps Exist
Preventive Health Care for Children: Experience From Selected Foreign Countries
Canadian Health Insurance: Lessons for the United States
Health Care Spending Control: The Experience of France, Germany, and Japan
Health Insurance: Bibliography of Studies on Health Benefits for the Uninsured

India - Five-year roadmap to fuller rupee convertibility

The Hindu reports;

“The Reserve Bank of India (RBI) Committee, headed by S. S. Tarapore, on Fuller Capital Account Convertibility has recommended that the scheme should be implemented in a five-year period in three phases and at the end of the five-year period ending in 2010-11, "there would be a comprehensive review to chalk out the future plan of action".

The committee, whose report was submitted to the RBI on July 31 and which was made public on Friday, recommended that the annual limit of remittance by individuals to open foreign currency accounts overseas be raised to $50,000 in phase one from the current level of $25,000 and further raised to $100,000 in phase two and $200,000 in phase three. Difficulties in operating this scheme should be reviewed, it observed. Since this facility straddles the current and capital accounts, the Committee recommended that "where current account transactions are restricted, that is, gifts, donations and travel, these should be raised to an overall ceiling of $25,000 without any sub-limit".

"All individual non-residents should be allowed to invest in the Indian stock market through SEBI registered entities including mutual funds and portfolio management Schemes who will be responsible for meeting Know-Your-Customer norms and the money should come through bank accounts in India". It recommended allowing non-resident corporates also to invest in Indian stock markets in the same manner the RBI allowed non-resident individuals...”

Related;
Fuller Capital Account Convertibility Report. See also the ‘Dissent’ piece by Surjit Bhalla in the report.
Ajay Shah's blog- has a roundup of the report
A Monetary Policymaker's Passage to India

India's RBI to Consult Government on Rupee Conversion
The rupee; fear of freedom
Are free capital movements a good idea?
India: Selected Issues- IMF February 2006
India Development Policy Review 2006
India: Country in Brief
Should India go for Capital Account Convertibility?
India-Research Publications from World Bank
How to solve the RBI problem
Subsidizing inefficiency
Doing Business India-Dealing with Licenses-The steps, time, and costs of complying with licensing and permit requirements for ongoing operations in India- It takes 20 steps and 270 days to complete the process, and costs 678.5% of income per capita.

Recent edition of Foreign Exchange TV show with focus on India- Arvind Panagariya interviewed in the show.
Time for India to reduce inequality
Economic and Political Weekly
Mukherji, Joydeep. "Economic Growth and India's Future."
New Economist posts on India

Books, publishers and blogs

Frederic Sautet at The Austrian Economists notes that Routledge announced that 100 of their (successful) books will be published in paperback.

Related;
Blogs of publishers; Oxford University Press, MIT Press, Penn Press Log, Uni. Of California Press blog, The Chicago blog, Yale Press blog, University of Nebraska blog, Harvard Press

Miscellaneous; The Future of the Book, NPR Books, Bookslut, Searchblog, Copyfight

Google Book Search driving surfers to booksellers

Iraq Book List

Teacher Librarian Wiki

Various websites where you can get online books FREE

Afghanistan- on the road to a narco-state?

"If this thing gets out of hand, you could move from a narco-economy to a narco-state," - Doug Wankel, director, US drugs control office

Things are going good for poppy cultivators in Afghanistan;

"Opium cultivation in Afghanistan rose 59 percent in 2006, largely due to a dramatic increase in the troubled southern provinces, the United Nations Office on Drugs and Crime (UNODC) said on Saturday…

The Afghan Government, the Parliament and partner nations have made it clear that legalizing cultivation or buying up the opium crop for medical purposes is not an option under current circumstances. The price differential between the legal market, where opium costs about $20-30 per kilo, and the illegal one, where the price is $100, would lead to even greater cultivation and the massive diversion of supplies to the black market..."

NYT also reports on the report;

“He said the increase in cultivation was significantly fueled by the resurgence of Taliban rebels in the south, the country’s prime opium growing region. As the insurgents have stepped up attacks, they have also encouraged and profited from the drug trade, promising protection to growers if they expanded their opium operations. “This year’s harvest will be around 6,100 metric tons of opium — a staggering 92 percent of total world supply. It exceeds global consumption by 30 percent,” Mr. Costa said at a news briefing…

He said the harvest increased by 49 percent from the year before, and it drastically outpaced the previous record of 4,600 metric tons, set in 1999 while the Taliban governed the country. The area cultivated increased by 59 percent, with more than 400,000 acres planted with poppies in 2006 compared with less than 260,000 in 2005….
Afghanistan is already the world’s largest producer of opium, and 35 percent of its gross domestic product is estimated to come from the narcotics trade..”

Related;
Colombia's 'Drugs and Thugs'
Deconstructing Afghanistan
Afghanistan Reconstruction
Afghanistan's Uncertain Transition from Turmoil to Normalcy
South Asia Monitor: The Reconstruction of Afghanistan: A Fight for Survival
Afghanistan; Country in Brief – World Bank
Afghanistan's opium output: what problem?
Afghanistan’s Other War
Life in Afghanistan
Afghanistan-It's rough up north; "In Juma Bazaar, near Maimana, a commander called Rahmatullah Rais, loyal to General Dostum's Jumbesh party, rules the roost. Locals claim that, like most commanders, Mr Rais levies a produce tax, which he calls zakat, after the Muslim tithe to feed the poor, according to his whim. They also say he grabs their water, which after four droughts in five years is a precious resource, and accuse him of the murder of six men in the town earlier this year. Mr Rais denies involvement in the killings and says he hasn't levied zakat for a decade."
Afghanistan: a country on the move
World Drug Report 2006

Hail the Google Books!

“In the 1970s, the Khmer Rouge regime in Cambodia decimated cultural institutions throughout the country. Khmer Rouge fighters took over the National Library, throwing books into the street and burning them, while using the empty stacks as a pigsty. Less than 20 percent of the library-home for Cambodia’s rich cultural heritage- survived.”
- University of Michigan President Mary Sue Coleman

A new feature of the Google’s Book Search makes out-of-copyright works available for downloading and printing.

Juan Cole raises a couple of problems with Google Book project;

“One problem: I am already finding poorly done books, where every other page is blurred beyond reading. This is very bad because I don't know when it would ever be corrected, and no one would have an incentive to carry out this sort of project once Google has…

A second, general problem with Google is that on the whole it is no good at searching by date. Why is that so hard to put in a search engine? Is it that programmers just don't appreciate the desirability of being able to study instances of the word "liberte" in France, 1700-1789? You can put dates in the searches, but in my experience that doesn't return satisfactory results. If Google wants the project to have maximum impact, they need to address this problem. (It would be nice to address it in their general web search engine, too. Have you ever tried to find a document put up on the Web in 1998, where you don't remember whole search strings?) Otherwise, I see a business opportunity for a historian who has good programming skills…”

Related;

Google, the Khmer Rouge and the Public Good; Mary Sue Coleman’s speech- highly recommended, gives also a history of JSTORE.

Making of America Books

Wikimania Conference

Overselling the Web: Development and the Internet- a new book that is coming up, published by a World Bank economist, Charles Kenny.

Podcast of the Day- Gene Sperling’s Labor Market

Gene Sperling, senior fellow at the Center for American Progress talks with Bloomberg's Tom Keene from Washington about his approach to analyzing the strength of the labor market and the outlook for the midterm elections. Listen to the podcast.

Related;
Pro-Growth Progressive-book presentation at Google
Sperling interview with Charlie Rose
Could I ever become a Democrat?-Tyler Cowen
A article on the book by Sperling

Authors, Books, Reviews, & Chapters

A collection of links on books and reviews.

Books Online
Trigonometric Delights

U.S. Trade Strategy -Free Versus Fair by Daniel W. Drezner,

Chapters Online

The Next Great Globalization: How Disadvantaged Nations Can Harness Their Financial Systems to Get Rich by Frederic S. Mishkin
Chapter 1 - THE NEXT GREAT GLOBALIZATION: A FORCE FOR GOOD?

Expert Political Judgment: How Good is It? How Can We Know? By Philip E. Tetlock
CHAPTER 1 Quantifying the Unquantifiable
John Kay review of the book

Economics and the Law, Second Edition: From Posner to Postmodernism and Beyond
By Nicholas Mercuro & Steven G. Medema
Chapter 2 CHICAGO LAW AND ECONOMICS

The State of Working America 2006/2007

Book Reviews

Reviews of Good and Plenty-The Creative Successes of American Arts Funding by Tyler Cowen at Weekly Standard and by Donald Boudreaux

Review of Claus Offe, REFLECTIONS ON AMERICA-Tocqueville, Weber and Adorno in the United States Translated by Patrick Camiller

Brain Science and the Moral Order
Interview with Mark Hauser
What Do Animals Think About Numbers?
A Universal Moral Grammer: a case for Intention Predicates, Consequence Predicates and Action Predicates?

Review of Judith Harris’ No Two Alike: Human Nature and Human Individuality

Review of ‘The White Man's Burden-Why the West's Efforts to Aid the Rest Have Done So Much Ill and So Little Good’ at IMF and CATO

Review of The Moral Consequences of Economic Growth, Benjamin M. Friedman,

Institutions and the Path to the Modern Economy: Lessons from Medieval Trade by Greif, Avner

Glyn Morgan, The Idea of a European Superstate: Public Justification and European Integration (Princeton University Press 2005), at Crooked Timber and John Quiggin

Review of Unspeak

DEEPAK LAL'S REVIVING THE INVISIBLE HAND: A REVIEW

Review of THE WAGES OF DESTRUCTION: The Making and Breaking of the Nazi Economy by Adam Tooze

Book Quotes from Fischer Black and the Revolutionary Idea of Finance by Perry Mehrling at Voluntary Exchange

Random Book Quotes at Core Economics.

Brad De Long on Econospinning

Review of Mao's Last Revolution By Roderick MacFarquhar and Michael Schoenhals

Naguib Mahfouz obituary

More on Amartya Sen’s Illusions of Identity by Fazeer

Markets in Everything- Slave Trade

“It took 400 years to import 12 million African slaves to the New World. In just the past 10 years 30 million people have been trafficked in SE Asia alone. The “people trade” affects at least 4 million humans valued at $10 billion a year.”- Illicit by Moises Naim

August 23rd was the International Day for the Remembrance of the Slave Trade and its Abolition

Related;
The Slave Trade map
Moisés Naím on writing ILLICIT
TRAFFICKING FROM RUSSIA & THE CIS: History & Trends
Trafficking in Persons Report
The State Department as hallway monitor
Convention for the Suppression of the Traffic in Persons and of the Exploitation of the Prostitution of Others
Trafficking in human beings-Interpol
Trafficking in human beings: Global Patterns
Multimedia
The Dark Side of Globalization
Drugs, Security, and Development

Worldmapper

Territory size shows the relative tourist profits made, in US dollars;

"The seven highest earning territories (per person) are islands: Bahamas, Palau, Barbados, Seychelles, Cyprus, Malta and Hong Kong. The highest net earnings are made in Spain where a profit of US$33 billion was made in 2003 which is more than twice the profit made by the second highest tourist earner: the United States."

From Worldmapper – a cool set of maps via Thoughts about K4D-they also have the data files in EXCEL.

Ahead of His Time -Robert Mundell

The latest F&D magazine from the IMF is out. The focus is on demographics, it has also got a profile of Robert Mundell. Some excerpts below;

“He also stays strongly rooted in academia, much beloved by generations of students who have deeply valued how much he has been willing to give of himself to help them grow. He was a professor at the University of Chicago (where he was also Editor of the Journal of Political Economy) from 1966 to 1971—a time famous for its economic talents, including several other future Nobel Prize winners. "As a teacher, he was both stimulating and irritating," says Mussa, explaining that Mundell liked to tease his students with "intelligent questions that weren't entirely well structured and therefore didn't have clear answers." Since 1974, he has been a professor at Columbia University.

David Bloom, Harvard professor of economics and demography and a former Columbia colleague, recalls that the most interesting conversation he ever had with Mundell was about the effect of cross-country demographic imbalances (in age) on international capital flows—a topic that Mundell isn't normally associated with but finds enormously important for macroeconomic performance. In fact, Mundell developed a four-generation model that shows that if one country has a demographic shock, it creates a wave of interest rate changes that bring on, in an open economy, compensating capital movements. The model also highlights the role that the U.S. baby boom has played in U.S. balance of payments and budget deficits, as there was high demand for resources (some of which were internally generated and some of which flowed in from abroad) associated with investing in children.”

Related;
The Works of Robert Mundell
Mundell’s Home Page; some of books are being digitized like this one International Economics, Robert A. Mundell, New York: Macmillan

Carnival of Podcasts

A couple of podcasts mostly from Radio National Australia; please note some of discussions start at the end or middle of the audio. Also if you don’t download now, it might not be available next week.

Why don't Americans like soccer?; Economist Allen R Sanderson says that Americans appreciate competitive market forces and incentives that reward ability, hard work and ingenuity, in sport as well as business, and soccer just doesn't make the grade. John Birmingham reflects on the Australian view of the European game.

Future of trade liberalisation; With the latest GATT attempts to further open up international trade, the DOHA Round, collapsing some weeks ago, Alan Oxley explains what went wrong and what might happen next

The rise of the carbon traders

John Taylor, former undersecretary for international affairs at the U.S. Treasury and now an economics professor at Stanford University, talks with Bloomberg's Tom Keene from Palo Alto, California, about the outlook for the central bankers' annual conference this week in Jackson Hole, Wyoming, and China's economic growth.

Stephen Roach, chief global economist at Morgan Stanley, talks with Bloomberg's Tom Keene in New York about the state of China's economy, banking system and political environment.

The Nature of Belief : Australian Science Festival Debate

Nazi New Religions, Pt 1

Christian Relics and the Historical Jesus

Conflict: What good is it?

Vietnam Remembered

Travel in the Age of Terrorism

A narrative for a long war

Peter Timms reviews How to Look At a Painting, by Justin Paton

Understanding Design

Airlines consider legal action against British Airports Authority

George Pell - Islam and Western Democracies

Susan Windybank - Welfare or Defence?

Lady Wisdom, the Desert and the Shell

International AIDS Conference

Sri Lanka: Militant nationalism and the current conflict

Why Foreign Aid Isn't Working in Africa

Postcard: The Democratic Republic of Congo

A Human Rights Act for Australia?

Intentional Marriage

Striking a patriotic chord; Michael Connors on the lyrics of those national anthems most footballers failed to sing before their World Cup matches

America's first dictionary 200 years on

Current TV

Embedded in the BBC

Reporting the Middle East

Financial literacy and accountability

Conscription, procurement and the economics of defence

Francis Wheen; Books that Shook the World - Marx's Das Kapital

A philosopher looks at Buddhism

Spinoza's heresy

What is Morality?

Keeping the Peace: The U.N. Security Council

Conflict Resolution

No Light For Eurotunnel?

Virgins, Vampires & Superheroes

Generation Y Spirituality

Spiritual Classics Pt 7: Sikhism

Women's Sport: Underpaid, underrated and under the radar

The Mystery of the Fluctuating Gas Price, featuring Thomas A. Firey

Save the Coral Reefs?, featuring Patrick J. Michaels

The Future of Medicaid, featuring Jagadeesh Gokhale

Doha Misconceptions

IMF has released a policy discussion paper clarifying what it sees as misconceptions on trade issues; “Trade Issues in the Doha Round: Dispelling Some Misconceptions”- it addresses the following four issues-

- Developing countries would benefit more from liberalization by rich countries than they would from their own liberalization. In fact, research shows that developing countries have much to gain from their own trade reforms.

- Tariff reductions on a multilateral basis could wipe out a large portion of trade between rich countries and developing countries as a consequence of preference erosion. On the contrary, research shows that the magnitude of any erosion is small in aggregate and is of concern for only a few countries and products.

- Agricultural subsidies in many Organisation for Economic Co-operation and Development many (OECD) countries are more damaging than other types of policies, such as tariffs. Actually, import tariffs in OECD countries harm developing countries much more than either production or export subsidies, with the exception of subsidies on cotton. Export subsidies in OECD countries actually benefit developing countries that are importers of subsidized products because they reduce the price of imported goods.

-The recipients of agricultural subsidies in rich countries tend to be small, lowincome farmers. The facts, based on data for both the United States and the European Union, are that a disproportionately large share of government support goes to wealthy farmers.

This and That

Some articles worth reading;

Don’t box yourself in when making decisions by John Kay

“For people in business and in financial services it might be a disturbing conclusion, but even in very simple cases, it is impossible to be certain that a particular mathematical representation of a real problem is a correct description.”

Tourists tell Britain: you’re a rip-off

Forget the World Bank, Try Wal-Mart

The American Standard of Whining by Virginia Postrel

Airports debacle worsened by greed and neglect by Joseph Stiglitz

Seven Questions: Somalia’s Struggle

Multiculturalism: unfolding tragedy of two confusions By Amartya Sen

"The history of multiculturalism offers a telling example of how bad reasoning can tie people up in terrible knots of their own making. The importance of cultural freedom, central to the dignity of all people, must be distinguished from the celebration and championing of every form of cultural inheritance, irrespective of whether the people involved would choose those particular practices given the opportunity of critical scrutiny, and given an adequate knowledge of other options and of the choices that actually exist in the society in which they live. The demands of cultural freedom include, among other priorities, the task of resisting the automatic endorsement of past traditions, when people – not excluding young people – see reason for changing their ways of living."

The 9/11 ReportA GRAPHIC ADAPTATION BY SID JACOBSON AND ERNIE COLÓN

The Preservation Paradox By Tim Harford

Iraq Runneth Over What Next? By Daniel L. Byman and Kenneth M. Pollack

"The debate is over: By any definition, Iraq is in a state of civil war. Indeed, the only thing standing between Iraq and a descent into total Bosnia-like devastation is 135,000 U.S. troops -- and even they are merely slowing the fall. The internecine conflict could easily spiral into one that threatens not only Iraq but also its neighbors throughout the oil-rich Persian Gulf region with instability, turmoil and war."

Most Expensive Rental Markets In America 2006
"As in 2005 (see " Most Expensive Rental Markets In America 2005"), the New York metropolitan area, which includes New York City and its surrounding counties, topped our list, with an average price of more than $27 per square foot for a high-end apartment.

In Manhattan specifically, the average rent came in at a whopping $48.33 per square foot--an estimate supported by July figures from Citi Habitats, a New York City-area real estate agency. The median monthly rent for a studio apartment in Manhattan is more than $1,900, according to Citi Habitats. If it's a three-bedroom spread that you're after, prepare to fork over somewhere in the neighborhood of $5,000."

Housing prices

The Fame Motive

Personality Traits of the Best Software Developers

Writing about your relationship could help it last

The Female Brain By Louann Brizendine-Chapter One
The Birth of the Female Brain

On the Web, Pedophiles Extend Their Reach

Sane Mutiny: The Coming Populist Revolt

The Economist advises Amazon

The latest edition of The Economist looks at the prospects of Amazon;

“Amazon's product range is expanding in much the same way as online sales are. As people become more accustomed to shopping on the internet, they are ordering a greater variety of goods and services from a wider range of websites. In America online sales were up by 25% in 2005 over the previous year, reckons Forrester, a research company. Travel is now by far the biggest category, worth some $63 billion last year, followed by computer equipment and software ($14 billion), cars ($13 billion), clothing ($11 billion) and home furnishings ($8 billion).

Amazon's challengers come from two directions. First, other online retailers are growing rapidly and appear in various forms. Many of the dotcoms are invading each others' turf. From auctioning people's old stuff, eBay now also hosts fixed-priced virtual shops offering new goods for sale. And Google is adding more shopping-type services, such as Froogle, a shopping-comparison service, and more recently its new Checkout payments system, which rivals eBay's PayPal.

Second, traditional retailers are rapidly getting their online acts together. This pits Amazon against giant retailers with huge purchasing power, like America's Wal-Mart and Britain's Tesco. These “multichannel” retailers make a virtue of their ability to offer both “bricks and clicks”. Many provide online customers with the option of picking up goods from the shop down the road. This is proving popular with web buyers who want things immediately or are keen to avoid shipping costs and staying in to accept a delivery. Circuit City, a big American electricals chain, expects in-store pick-ups to account for more than half its online sales this year…

The battle for downloads is becoming more intense. The market for digital music is dominated by Apple's iTunes, which is also likely to expand into video. Microsoft is entering the music-download business with a digital player, called Zune. On August 8th Nokia bought an American digital-music distributor, Loudeye, to develop its own service for its music-enabled handsets. The Finnish telecoms-equipment company says these are now selling roughly twice as fast as Apple's iPods. Video downloads are available online from some sites, such as Movielink.com, which is owned by five big film studios. News Corp's websites, including MySpace.com, are planning to sell films and shows from the group's Fox network. …

A video service could resemble a downloadable version of Netflix, a Californian company that pioneered online video rentals. Netflix's customers compile online lists of videos they want to see and receive them in the post. When the DVDs are returned in their pre-paid envelopes, the next titles are sent. With no late fees, Netflix has pummelled Blockbuster's store-based video-rental model.

Netflix is also exploring how to deliver movies online. Amazon has already copied the Netflix postal model in Britain and Germany and it has dropped hints that it may launch a postal service in America: Mr Bezos told Wired magazine last year that Amazon was well placed to do so “...and we wouldn't have to pay heavy marketing fees.” The same could be said about video downloads. Although Mr Bezos has discussed his strategy in the past with The Economist, the company did not respond to requests for an interview…

“The need to own music in a physical form, whether it's to play in other music systems, to minimise the chances of losing it or just because they like to have a physical collection, remains very strong amongst internet users,” says Alex Burmaster, the research company's European internet analyst…

a subsidiary called Amazon S3 rents out temporary storage by the terabyte to other websites…

Another Amazon subsidiary, BookSurge, is busy courting publishers to have their works scanned into digital files…

A new “e-reader” device from Sony has a special screen that mimics the way light falls on a printed page. The size of a paperback, it can store several hundred novels…

Unless the pioneer of online retailing can provide downloadable media it risks being “disintermediated”—rather as only a decade ago high-street bookshops, music and video stores were disintermediated by Amazon itself.”

My bet is on Amazon’s BookSurge.

Related;
A 2001 interview with Jeff Bezos (video)
The Future of Gadgest (video)
Communicating the Skype way
Profiting from obscurity; What the “long tail” means for the economics of e-commerce
A METHODOLOGY FOR ESTIMATING AMAZON'S LONG TAIL SALES
Interview with Chris Anderson (starts at the end of the show)
Chris Anderson and the Long Tail (Econ Talk)
Screening the Latest Bestseller
Ads Coming to Textbooks;

"Now, a small Minnesota startup is trying to shake up the status quo in the $6 billion college textbook industry. Freeload Press will offer more than 100 titles this fall _ mostly for business courses _ completely free. Students, or anyone else who fills out a five-minute survey, can download a PDF file of the book, which they can store on their hard drive and print.

The model faces big obstacles. Freeload doesn't yet have a stable of well-known textbook authors across a range of subjects, and it lacks the editorial and marketing muscle of the "Big 3" textbook publishers (Thomson, Pearson, and McGraw-Hill). Its textbooks don't come with bells and whistles such as online study guides that bigger publishers have spent millions developing in order to lure professors _ who assign textbooks and are the industry's real customers."

Insults as Education

Alex Tabarrok is running some Gordon Tullock insults- my favorites from the list;

“The other day Gordon asked me to read one of his papers and I pointed out a few typos. "Excellent," he said, "this will surely be your greatest contribution to economics."

From Eric Crampton;

"Tullock and I share a birthday. Walking over to Buchanan House for a seminar, I told him we had something in common. He replied, "We'll have to do something about that, won't we." When I later asked what he'd planned on doing about it, he informed me that he'd contacted some folks from upstate who'd arranged to have me shot. At his 80th birthday celebrations, I thanked him for throwing me such a great birthday party; he laughed and told me I'd be receiving the bill for the event in the mail.

My favorite Tullock insult, though, was levied at Walter Block. Block was presenting a paper at the Southerns in 1999. The paper was coauthored with Tom DiLorenzo; Walter, in his preamble to the presentation, noted that since his coauthor wasn't there, all the errors in the piece were his. Tullock shot up, pointed at Walter, and said "DiLorenzo wrote the whole thing then, didn't he!"

From Tyler Cowen;

"Every day (we are both in) Gordon passes my door and barks out "Work harder!" That's just one of many..."

For Comment; Is Tullock's little book, ‘The Economics of Non-Human Societies’, worth a read/does he give any original insights in the book?

Related;
Milton Friedman insults Gary Becker
Our colleague Gordon Tullock
You're not politically viable!!!
Economic Freedom and Economic Growth
James Buchanan the Great
James M. Buchanan—The Creation of Public Choice Theory
James Buchanan on Conservatives and Liberals
The Quotable Gordon Tullock
Tullock Festschrift
Interview with Tullock
Rothbard as a Teacher
Gordon talks with Milton Friedman on education reform (video)

The Truth about Globalization and Inequality

According to P. Sainath;

“India is a classic example of engineered inequality. On 20 October, The New York Times had a front page lead celebrating the birth of a class of people in India who spend their weekends at malls. It failed to mention that this year, India slipped three places in the human development ranking of the United Nations. We now stand at rank 127. This year’s UN Human Development Report had found that for the bulk of the Indian population, living standards are lower than those of Botswana – or even the occupied territories of Palestine. So while some of the richest people in the world live in India, so do the largest number of the world’s poor.

The euphoria over one good monsoon (actually, we’ve had several these past 15 years) seems to have erased any debate in the media on what’s happening in Indian agriculture. Small farms are dying. Investment in agriculture is down. Rural credit has collapsed and debt has exploded. Many are losing their lands as a few celebrate at the malls. In March this year, as Professor Utsa Patnaik points out, the per person availability of foodgrain was lower than it had been during the notorious Bengal Famine of 1942-43.

Thousands of farmers have committed suicide since the late 1990s. In a single district of Andhra Pradesh, Anantapur, more than 2400 farmers have taken their own lives since 1997. Elsewhere in India, like in Gujarat or Mumbai, the loss of countless jobs in industry is boosting religious fundamentalism. In the 2002 violence in Gujarat in which over 1500 lives were lost, many of the rioters were workers from shut-down textile mills.
The huge new inequalities are feeding into existing ones: For instance, in a society where they are already disadvantaged, hunger hits women much harder. Millions of families are making do with less food. In the Indian family women eat last. After they have fed their husbands and children. With smaller amounts of food being left over now, poor Indian women are eating even less that they did earlier. The strain on their bodies and health becomes greater. Yet, health care is ever more expensive.”

According to Phillipe Legrain;

"Wade points out that absolute income gaps are widening and argues that this is a matter for concern. Really? Consider again his example of economy A, where the average income is $10,000, and economy B, where it is $1,000. Their relative income is 10:1 and the absolute gap between them is $9,000. Suppose B grows at a racy 10 per cent a year. Its income will rise by $100 to $1,100. If the absolute gap between A and B is not to widen, A can add at most $100 to its income of $10,000, which means growth cannot exceed 1 per cent. In short, because A starts off so much richer than B, even if B booms the absolute gap between them will initially widen unless A stagnates—and if A stagnates, B is unlikely to boom, since A’s demand for its exports will also stagnate. Perhaps Wade wants the gap between rich and poor to shrink through economic stagnation in rich countries—if so, he should say so explicitly. But surely what is happening now is preferable: rich countries are growing steadily, but poor countries are growing faster, and thus catching up in relative terms. If this continues, they will eventually narrow the absolute gap too. For example, if B grows at 10 per cent a year for 30 years, its income will rise to $17,449; while if A grows at 2 per cent a year over the same period, its income will rise to $18,114.”

Related;
What to Read: Inequality and Development in a Globalizing World- A Syllabus
Inequality Does Cause Underdevelopment
Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence
The global redistribution of income
New Economist blog's posts on Inequality.
Everybody Loves a Good Drought: Stories from India’s Poorest Districts- Book Review

Multimedia;
Why Inequality Matters in a Globalizing World- Nancy Birdsall
How Unequal Can America Get Before it Snaps- Robert Reich
Economic Growth, Inequality and Poverty: Findings from a New Dataset
Perspectives on Growth, Inequality and Poverty
Poverty, Inequality and Growth in the Era of Globalization
World Inequality in the Second Half of the 20th Century
Globalization, Growth, and Poverty: Building an Inclusive World Economy
Hans Rosling at TED
Gapminder
The Globalisation of Inequality – Sainath

Amartya Sen’s Advice to Indians

Outlook India has an interview with Amartya Sen- some excerpts below (free with registration);

“The consumption pattern of urban middle-class Indians is becoming increasingly similar to their counterparts of the West. From household goods to food to cultural products, there is now a close resemblance between Indians and those in the West. Are Indians becoming increasingly similar to their counterparts in the West? If so, what are the perils of this trend?

The increase in global contact and association has led to much greater homogeneity of the consumption of the rich across the world—it is not an isolated trend exclusive to India (you see it in Rio, Accra and Johannesburg as well as in Mumbai and Shanghai). This is, in a basic form, an age-old phenomenon. I have discussed in my book The Argumentative Indian how the consumption pattern of rich Indians changed in the early centuries AD, because of the trade in luxury products from China (with plentiful references in Indian literature, including Kalidasa and Bana), to Chinese silk, Chinese fruits, Chinese cosmetics used by the rich. But this is happening on a much larger scale in the contemporary world.

The basic problem is not what commodities the rich spend their money on, but that the economic gap between the rich and the poor is so large and also that it is growing (it has not grown as fast as in China, but it has certainly grown in significant ways). In fact, it is the existence and the expansion of this gap that we have to address. This may be an inevitable part of the price to pay to retain high-skill technical experts within the country and realism may well require that this connection be taken into account. But social ethics also demands that we examine—with realism but also with a sense of equity—what is really inescapable and what can be done to reduce the divergent fortunes of the rich and very rich on the one hand, and the poor and very poor on the other. This is not just a matter of the commodity pattern of the consumption of the rich.

Having said that, however, I should also mention that there is still at least one special problem in the hold of modern Western consumption patterns on the rich in India—and in other poor countries. The labour component in the production of these 'modern amenities' is often quite low in comparison with the older patterns of luxury consumption (for example, widespread services provided directly by unskilled labour), and this can have a negative effect on labour demand and through that on employment. This is not in itself a strong enough reason to curb that type of consumption through government control, but it is a reason to pay special attention to the critical role of employment generation in the process of economic development and to see what can be done to address this issue.

Even as India strives to become a global power, politically and economically its social indices remain poor. In terms of human development, India lags far behind. Has India become less caring? How does it dovetail with India's quest to become a global power? And what kind of future do you envisage for the poor as India changes?

You are absolutely right to point to India's relatively poor record in human development. This is not a new phenomenon, so it is not a question of India becoming 'less caring' than in the past, but the old problem of the neglect of social facilities and of the development of human capabilities which has not been adequately addressed or removed. It is hard for me not to feel frustrated when I look at some of the things I wrote in the media in the 1950s and early 1960s—grumbling about illiteracy, lack of basic health facilities etc...they still remain relevant. I would have loved to have become a purveyor of obsolete problems, but alas these problems are not obsolete even now. More attention is certainly being paid by the present government to elementary healthcare and other basic failures in capability formation. But much more needs to be done, without shutting off other good things like the expansion of Indian industries, extension of its global economic connections, development of more technological sectors, greater attention to physical infrastructure. These too are potentially helpful developments for reducing economic deprivation, but they are not adequate in themselves in eliminating India's handicap in human development.

Post-9/11, India's democratic example has been hailed worldwide. Yet the last 10-15 years have seen the emergence of unstable polity, rise of religious fundamentalism, and the trend among lower castes to move away from mainstream parties like the Congress. What explains the strengthening of the politics of identity? Do you think this in itself is a reaction to globalisation, and the shift in our politics from concentrating on 'poor India' to 'shining India'?

This is an important subject, but I don't think it is globalisation that is the source of the problem here. Indeed, as a successful democracy, India's ability to tackle these problems demands democratic politicisation of issues of poverty and social backwardness, which is entirely compatible with a more thriving participation of India in the global world. The exploitation of divisive identities, by focusing on our contrasts and conflicts, neglecting other identities that unite people in different ways, is a phenomenon that has plagued the world persistently. The field of divisive action has changed, but the basic problem of the exploitability of one division or another—forgetting everything else—remains. World War I was fed by the division of national identities, with the British, the Germans and the French tearing each other apart. Now the most exploited source of belligerent identity is linked to religious divisions, and here, despite tendencies in that direction unleashed particularly by religious majoritarianism, India's democracy has helped to reduce and restrain the divisive exploitation of communal differences.

Indeed, in the reading of the outcome of the 2004 general elections, while there are many local factors involved, it would be hard to overlook the real presence of a general disapproval in the country of communal fanaticism (especially after what happened in Gujarat in 2002). Nor can we overlook a strong desire to reassert a commitment to the poor rather than taking the 'shining' of the middle classes to be itself adequate. More can, however, be done in these respects and they demand greater political engagement with the entire population—not just some sections of it to the exclusion of others. However, you are also absolutely right that the fragmentation of lower caste movements into divisive groups, rather than providing a united front for social equity, has been a negative influence. It is the task of the socially committed political leaders of today to focus more fully on the shared challenges of economic poverty, social deprivation, gender inequality and other defects that require a joint approach, rather than a divisive outlook that splits the deprived groups into mutually hostile segments.

To what extent is this change in perception an outcome of globalisation, where knowledge of English has become a skill that counts. A large number of Indians, even in villages, want to go through the English system of education. What do you think could be the perils of this trend?

Certainly globalisation has made English something like a lingua franca of the world. We have to accept that, without seeing globalisation and the spread of English as a necessarily problematic phenomenon. Indeed, I do not see the wide interest in learning English as a regressive force, since the use of the English language both allows India to speak to the world and serves as the medium through which Indians from across the country can share their technical knowledge and social and political dialogue. If the interest in English were to eclipse the interest in India's enormously rich languages, with its rich literature and long histories, that would be a loss, but that is not the situation now and future dangers too can be avoided through giving the issue our conscious attention. It is possible to be both interested in the richness of India's own culture and heritage and take an interest in the cultures and achievements of the rest of the world, in exactly the way that Rabindranath Tagore discussed so eloquently and convincingly. There is no necessary conflict between 'the home' and 'the world', if we continue to stand on our own feet and look at the world with interest and involvement, rather than with docility and slavishness.

What has to be watched, however, is the possibility that the role of English acts as a serious barrier for the underprivileged to get their voices heard whenever they are expressed in other languages. The linguistic divide can also contribute to the strengthening of economic divisions. These are, however, issues that can be addressed through intelligent and humane government policy, rather than our seeing them as inescapable problems that make the use of English irresistibly retrograde.

The attributes of power you'd want India to acquire?

I fear I am not a great believer in power as a source of redemption. Power is mainly the dividing line that separates the powerful from the powerless. Having been on the powerless side in the world for so long, I hope India does not get too hung up on cultivating power to be on the other side! The really important powers to acquire would come not so much from India's nuclear arsenal or missiles, but from our ability to help in solving the problems that ail the world today, which, alas, are too plentiful. We have something to offer through our experience of a working democracy (not just the rhetoric of democracy, delivered through invading armies) and sustained secularism (tested but still thriving in India), and these are not negligible issues in the thoroughly messed-up world today. If we do try to be good global players in the confused world in which we live, then a bigger global voice for India would indeed be an excellent thing.

There is a further issue about power. There is a positive role for the empowerment of the underprivileged groups within India—the landless labourers, the subjugated housewives, the economically deprived making a precarious living, the social underdogs maltreated by the privileged, and others.If we are concerned with inequality, then inequality of power must command our attention. And if a reduction of inequality of power within India is seen as making India as a whole more "powerful," then we may sensibly want "more power" in that rather special sense. We have to think more critically and more fully about exactly what powers we want, in what sense, and precisely what we want to do with power. Having more power is not a virtue in itself.”

Related;
Google has a couple of good Amartya Sen videos.
India through its calendars

This and That across the Web

Some things that caught my eye across the web;

F. A. Hayek, intellectual father of the Wikipedia
Getting Things Done Software Systems
Fallacious arguments for low levels of tariff protection
Southern bluefin tuna & Japan
Double-Tongued Dictionary
Jill Carroll's story
Some TV is worth watching
The Relentless Application of Self-Interest
Survey of Professional Forecasters
Supply-side Economics at 25
WATCHING LEBANON-Washington’s interests in Israel’s war by SEYMOUR M. HERSH
Albert Hirschman
What an Electric Vehicle Costs
How do oil price shocks affect the economy?
An update on the Chicago Climate Exchange
Excel in-cell bar graph
Errors in economics a reason for modesty: Baumol
Health Care Costs
The trade balance, the current account balance, and other definitions
A Roundup of Interesting Economics Links
Liberal agonies
Oil Shock; Micro and Macro
Retail Sales and Nominal GDP
Times Cover Art

The Jordanian Stock Market—Risk Diversification versus Performance?

“Thriving capital markets are the lifeblood of capitalism, with all of that economic system's attendant benefits. Capitalism is the best method yet devised of generating growth, raising living standards and reducing poverty.”
-Anne O. Krueger

A recent working paper from IMF on the “The Jordanian Stock Market--Should You Invest in it for Risk Diversification of Performance?” concludes;

“This study finds that the Amman Stock Exchange is integrated with Arab markets but not with other emerging and developed stock markets. We used both bivariate and multivariate cointegration approaches in our analysis. The multivariate approach shows that Arab stock markets are cointegrated and that they share one long-term equilibrium relationship. The bivariate approach shows that the Jordanian market is individually cointegrated with most Arab markets with the exception of Tunisia and Morocco. However, the results also show that the ASE is not cointegrated with other emerging and developed stock markets.

From this, we conclude that the Arab stock markets are integrated in an economic sense but that the integration is incomplete. The analysis found that there are five common stochastic trends driving the six stock markets. The five common stochastic trends could be attributed to outside factors determining the stock markets or to barriers to investment and trading among the countries. The countries in the study have common cultural characteristics; they also have implemented several deregulation and privatization projects, and have intensified trade and financial relations. All of these factors may have contributed to existing market integration. As cooperation among these countries increases, it is likely that the number of outside common trends will decrease and that the stock markets will become even more integrated.

Our findings have some implications for international portfolio diversification. Overall, the results suggest that investing in several Arab stock markets may offer limited opportunity for further long-term risk diversification. Investors desiring to diversify their portfolios vis-à-vis developed and other non-Arab emerging stock markets may be able to achieve additional diversification by investing in Jordan. The ASE compares favorably with many other Arab markets in terms of investment restrictions, transparency, and the regulatory environment, and has had relatively low historical price volatility. The study also shows that the Jordanian market is Granger-caused by the markets in Saudi Arabia and Kuwait. Thus, outside investors could get indirect exposure to these markets by investing in Jordan.

Our results also have important policy implications for Jordan. The fact that the ASE is cointegrated with the other Arab markets could be due to the fact that global investors see these markets as close substitutes, and the analysis shows that they are. Jordan should thus continue enhancing the transparency and the effectiveness of regulation and supervision of its capital markets so as to distinguish itself further from other markets. This would be important, as Jordan will likely rely on foreign capital inflows in the foreseeable future. Moreover, it would tend to reduce any potential contagion from adverse regional developments.

Finally, there are areas where future research might be useful. One issue that could be investigated is when the Jordanian stock market became integrated with Arab markets under study and why. Another topic could be the role of banks in the Jordanian market, and Arab Bank, in particular.”

For Comment; The more we can tie the countries in the Middle East economy, the better chances for peace in the region. One possible area is tourism. What are other possible areas for cooperation? And western media are very fond of people like Queen Rania inviting them to forums and discussions ranging from middle east politics to Islamic reformation. How does the average Arab view this or are they reflecting the view of the general Arab population or not?

Related;

Counterterrorism and stockmarkets

NEW WORLD BANK ECONOMIC PLAN FOR JORDAN

The 30 most influentional people in Jordan

Creating Incentives for Israeli-Palestinian Peace

“Suppose all government tourist-generated revenues from all of Jerusalem were divided according to a fixed formula between the two sides. For instance, Israel's current population is about 6.3 million. The populations of Gaza and the West Bank are 2.9 million. Proportionality argues that about 31 percent of tourist revenue go to Palestine and 69 percent to Israel. This division is only one possible allocation. The key is that this pooled revenue be shared according to a prearranged fixed formula.

A revenue-sharing arrangement ties the wealth flowing to the Palestinians to their ability to enforce a tourist-friendly atmosphere. Tourist income ebbs and flows with violence. As the record low tourism in Bethlehem over the recent Christmas holiday makes clear, when peace is lacking, tourism declines. In an arrangement that ties revenue to tourism, both Palestinians and Israelis have incentives to minimize violence. Because tourism is currently so much weaker in Palestinian areas, the incentive is asymmetric. A fixed revenue-sharing arrangement, regardless of where the tourist income is generated, gives both sides an interest in seeing the pie expand and gives the Palestinian leadership reasons to control the Intefada and terrorism.”

Jordan - Development policy review : a reforming state in a volatile region

Amman- the most expensive city in the Arab World

Economy of Jordan according to Wikipedia version, and according to the King

Reform in Muslim Societies- featuring Queen Rania (video)

Discussions with King Hussain- Charlie Rose and at World Affairs Council

Doing Business – Jordan; Starting a business-
“The challenges of launching a business in Jordan are shown below. Entrepreneurs can expect to go through 11 steps to launch a business over 36 days on average, at a cost equal to 45.9% of gross national income (GNI) per capita. They must deposit at least 1011.6% of GNI per capita in a bank to obtain a business registration number.”

Compare with Israel;
“Entrepreneurs can expect to go through 5 steps to launch a business over 34 days on average, at a cost equal to 5.3% of gross national income (GNI) per capita. There is no minimum deposit requirement to obtain a business registration number.”

Some Stock Exchanges in the region; Israel, Palestine, Egypt, Saudi Arabia, UAE

Arab Monetary Fund

Learn from the England

In earlier post I commented that Brookings had suggested that State Department should follow DFID’s lead in the development aid. Now Posner suggests, “We Need Our Own MI5”;

“Intelligence succeeded in part because of the work of MI5, England's domestic intelligence agency. We do not have a counterpart to MI5. This is a serious gap in our defenses. Primary responsibility for national security intelligence has been given to the FBI. The bureau is a criminal investigation agency. Its orientation is toward arrest and prosecution rather than toward the patient gathering of intelligence with a view to understanding and penetrating a terrorist network….

The bureau's tendency, consistent with its culture of arrest and prosecution, is to continue an investigation into a terrorist plot just long enough to obtain enough evidence to arrest and prosecute a respectable number of plotters. The British tend to wait and watch longer so that they can learn more before moving against plotters.

The FBI's approach means that small fry are easily caught but that any big shots who might have been associated with them quickly scatter. The arrests and prosecutions warn terrorists concerning the methods and information of the FBI. Bureaucratic risk aversion also plays a part; prompt arrests ensure that members of the group won't escape the FBI's grasp and commit terrorist attacks. But without some risk-taking, the prospect of defeating terrorism is slight.

MI5, in contrast to the FBI (and to Scotland Yard's Special Branch, with which MI5 works), has no arrest powers and no responsibilities for criminal investigation, and it has none of the institutional hang-ups that go with such responsibilities. Had the British authorities proceeded in the FBI way -- rather than continuing the investigation until virtually the last minute, which enabled them to roll up (with Pakistan's help) more than 40 plotters -- most of the conspirators might still be at large, and the exact nature and danger of the plot might not have been discovered. We need our own MI5, not to supplant but to supplement the FBI…”

More at their weblog.

“America faces decades of red ink”

“The nearest thing to eternal life we’ll ever see on this earth is a government program.”
- President Ronald Reagan

I wonder why Americans politicians are not listening to their Comptroller General. Following are excerpts from a recent speech David Walker gave World Future Society conference (emphasis mine);

“But, first, I think it’s important to understand how myopia or shortsightedness can undermine a nation’s willingness and ability to act. In the case of the United States, strong economic growth, modest inflation levels, relatively low interest rates, and our current superpower status have given many policymakers and the American public a false sense of security about our nation’s current position and future prospects. Even though we know a demographic tsunami is building silently offshore—I’m referring to the impending retirement of our baby boom generation—America continues to party on and pile up record levels of debt….

In this spirit and in an effort to lead by example, GAO has published an unprecedented report called “21st Century Challenges” that asks a series of probing, sometimes provocative, questions about current government policies, programs, and operational practices. The report brings home how much of the U.S. government reflects organizational models, labor markets, life expectancies, transportation systems, security strategies, and other conditions that are rooted in the past…

The same goes for many tax policies. For example, just this summer, the U.S. government announced it will stop collecting a 3-percent tax on long-distance telephone calls. This doesn’t seem particularly startling until you realize that the tax had been introduced in 1898 to help pay for the Spanish-American War—a war that lasted only a few months!..

To better meet Congress’ information need on these emerging issues, GAO has developed an approach we call “grounded foresight.” We believe that to be credible, foresight work must have a strong factual and conceptual basis. Such work needs to ground all trends in evidence. After all, everyone’s entitled to their own opinion but not to their own facts! At the same time, such work also needs to clearly convey the uncertainty that’s inherent in foresight analysis.

Several key tools are available to encourage a forward focus. These tools include strategic planning, key national indicators, and scenario planning. Unfortunately, not all governments, including my own, have taken full advantage of these tools…

So what themes or trends does GAO expect to concentrate on in the coming years? Perhaps the most urgent issue is America’s worsening financial condition and growing long-term fiscal imbalance. Long-term fiscal analyses by GAO and our sister agency in the legislative branch, the Congressional Budget Office, show that federal deficits will grow to unsustainable levels in as little as two decades. At that point, without significant policy changes, federal deficits could reach 10 percent or more of our economy. States and local governments face increasing future fiscal pressures as well. Largely because of our aging population, rising health care costs, and relatively low revenues as a percentage of the economy, America faces decades of red ink.

Clearly, a crunch is coming and eventually all of government will feel its impact. If America continues on its current course, it’s only a matter of time before our ship of state hits the rocks. To put us on a more prudent and sustainable long-term path, the federal government must begin to make tough choices in connection with budget systems, legislative processes, entitlement programs, spending patterns, and tax policies. There’s no way we will grow our way out of our fiscal hole. The sooner we begin to act, the better because, as the world’s largest debtor nation, time is working against us.

As a citizen, a senior government official, and a father and grandfather, I take America’s fiscal imbalance very seriously. It’s not just a matter of numbers, it’s also about values. It’s easy to forget that deficits eventually have real-life consequences for real people, including our own children and grandchildren….

In the 21st century, an effective governance structure recognizes that more and more policy challenges require multilateral action. We’re also going to need greater coordination among various levels of government and the private and citizen sectors both domestically and internationally. The plain but simple truth is that no nation in today’s world, including the United States, can or should go it alone.

Beyond changing our governance approaches, we also need to consider how we keep score. In my view, key national and outcome-based indicators can help policymakers better assess a nation’s status, its progress over time, and its position relative to other nations on issues like public safety, health care, housing, education, and the environment. Such indicators can help guide strategic planning, facilitate foresight, inform agenda setting, enhance performance and accountability reporting, and encourage more informed decision making and oversight, including much-needed and long-overdue efforts to reengineer the base of our federal government….

If we expect to successfully tackle the tough issues I’ve described tonight, we’ll need more leaders in the United States and elsewhere with four key attributes. These attributes are courage, integrity, creativity, and stewardship.

By courage, I mean people who state the facts, speak the truth, and do the right thing even if it isn’t easy or popular. By integrity, I mean people who practice what they preach and lead by example. People who understand that the law and professional standards represent the floor of acceptable behavior. People who set their sights higher and strive to do what’s right. By creativity, I mean people who can think outside the box and see new ways to address old problems. Individuals who have foresight and can help others see the way forward. Finally, by stewardship, I mean people who don’t just generate positive results today but who also leave things better positioned for the future when they depart their jobs and this earth. That’s what real stewardship is all about, and we don’t have enough of it today.”

I think the Mr. David Walker should be invited for next year’s TED conference. Going over the World Future Society’s website I wasn’t impressed. They can learn a thing or two from the TED conference.

Related;
World Future Society conference review
Top 10 Forecasts from Outlook 2006
Why Sustainability, not Terrorism, Should Be Our Real Security Focus

Should we subsidize busking?

In an earlier post I enquired about street musicians, and now David Tufte has a great post on the economics of busking;

“Believe it or not, busking was actually the best money I ever made as a musician. In London you could consistently make 10-20 pounds per hour ($15-30 at that time, and about $30-60 after adjusting for inflation). If you were serious, it was possible to do this about 4 hours per day, which works out to $25-50K per year, tax free. Few musicians of any caliber make that much. The money you got varied a lot by location: touristy and entertainment areas did the best because people had money to toss and time to listen. Amounts varied less by time of day: congestion tended to discourage individual donations.

Of course ... you had to sell your soul to do it. In London, the best spots were controlled by groups that were willing to defend turf (although this didn't happen much). Essentially, gangs had evolved endogenously to cartelize the market. No one called them gangs or cartels, so I'll stick to groups.

The system worked like this. In London, much busking occurs in the underground. Everyone knew the best spots - decent acoustics, lots of traffic, a big enough area to work, and so on. In the morning, someone from a group would show up and claim a spot for the day. They brought a notebook, and took reservations for one hour slots throughout the day. There was some openness about getting a slot, but the best way to keep that spot working for your group was for everyone to be on the list and to show up on time in order to transfer the spot to the next person. It was often easier to get a slot if the pubs were open, since the competition was likely to be lighter.”

Read the whole post.

I came across the following comment on a post of Tyler Cowen on arts finding;

“In Berlin last year I heard (1) a busker in a U-bahn station proving that you can play Bach's organ music on a squeeze-box, pleasurably, and (2) a string quartet busking outside KDW and gathering a decent crowd for, again, Bach. In Stowmarket, in deepest rural England, I heard a busker play Ellington's "It don't mean a thing" on the electric guitar, to a sizzling standard. I'm left wondering why my tax is extorted to subsidise ballet and opera, and the crude nonsense passed off as painting and sculpture.”

For Discussion; If buskers make people happy, should we be subsidizing them? What do the happiness economists think about it?

Related;
A Busker’s Notes
Losing my Religion - Tube Busker

Trade and CGE Models

The Economist a couple of weeks back had a good article on economic models;

“Economic models fall into two broad genres. Macroeconomic models, the distant descendants of Phillips's machine, belong mostly in central banks. They capture the economy's ups and downs, providing a compass for the folks with their hands on the monetary tiller. The second species, known as computable general equilibrium (CGE) models, largely ignore the vagaries of the business cycle. They concentrate instead on the underlying structure of production, shedding light on the long-term repercussions of such things as the Doha trade round, a big tax reform or climate change…

Trade's virtuous effects are of two distinct kinds. First, trade helps countries make the most of what they already have. It frees countries to allocate their resources—whether they be cheap labour, fertile land or educated minds—as efficiently as possible. But, secondly, trade can also allow countries to accumulate resources more quickly. Indeed, the biggest prizes lie in faster growth, not heightened efficiency; in accumulation and innovation, not allocation.

By their nature, CGE models are better suited to capturing the first effect than the second. They provide “before and after” snapshots of the economy at two points in time. They are therefore good at capturing the one-off gains that might arrive from a redeployment of the economy's resources. They are much less good at capturing the continuing gains that result from a faster accumulation of capital, or a quickened pace of productivity growth. Most trade models, indeed, hold productivity fixed…”

Oxfam recently had a new paper up critiquing the CGE modelling in trade- Modelling the Impact of Trade Liberalisation; A Critique of Computable General Equilibrium Models, by Lance Taylor and Rudiger von Arnim, New School for Social Research;

The paper presents a review and critique of the most widely used trade models based on computable general equilibrium (or CGE) models. The emphasis throughout is on methodology. The paper provides concise analytical arguments explaining the fundamental weaknesses of CGE models, paying particular attention to the way that CGE models conceptualise and measure welfare. The authors also show that the manner in which the World Bank uses CGE modelling is highly problematic, making implausible assumptions about elasticities, the exchange rate, and macro causality. World Bank models assume that the most central macro-economic indicators do not change in response to any liberalisation scenario. The authors argue that this is negligent, especially in developing countries with historically large trade deficits, significant debt problems, and a large informal economy with underemployment in modern sectors. The authors also identify a particular inconsistency inherent in the use of ‘Armington’ specifications of elasticities in CGE models. They show that, even if the Bank’s welfare measures and macro causal scheme are accepted, the welfare gains that liberalisation is supposed to induce are estimated incorrectly in LINKAGE, GTAP, and other trade models that adopt the popular Armington specification of imperfect competition between trading partners…

CGE models can be useful quantitative supplements to experimental thinking about the importance of different potential causal linkages among economic variables at the country or world level. However, mechanically churning out ‘projections’ of welfare gains or any other indicator subject to one single set of causal assumptions and parameter values is a fundamental misuse of a sometimes helpful tool.”

Related;

Economic modeling and trade negotiations

World trade; In the twilight of Doha

Weighed in the balance; The Doha round of world trade negotiations was supposed to lift many millions out of poverty. It looks unlikely to do so

F&D edition focusesd on Trade

Demystifying Modelling Methods for Trade Policy

Assessing World Bank Support for Trade 1987-2004: An IEG Evaluation

The Future of Trade after Doha: What’s in It for Developing Countries?- video presentation

EcoMod has short training courses on CGE

“It is good to be an economist, it is better to be a social scientist”

Richard Easterlin’s book The Reluctant Economist should be more widely read; some excerpts from the first chapter (emphasis mine) -

“Economic theory, as taught to undergraduate and graduate students, starts from the assumption that preferences are given and unchanging. Yet a little reflection by economists on their graduate school experience should disabuse them of this notion. Graduate school not only teaches subject matter but also the values of the economics profession – what are the important subjects of economic research, what is the status hierarchy of the profession, which individuals are the proper role models. Graduate training is indoctrination (Klamer and Colander 1990; Reder 1999)…

I took two courses from Kuznets, one in statistics, which chiefly conveyed a strong skepticism toward the field and urged the use of simple, understandable methods, and one in economic development, which was essentially a course in general economic history. This development course, too, transmitted a strong sense of skepticism, not, however, toward economic history but toward economic theory. Kuznets’s basic point was simple: the “givens” of economics – technology, tastes, and institutions – are the key actors in historical change, and hence most economic theory has, at best, only limited relevance to understanding long-term change. In Kuznets’s view, what was then called “development theory” – even the widely hailed work of Schumpeter – lacked concrete empirical reference.

I was impressed by Kuznets’s intellect, as were graduate economics students generally, but these courses did not make me into a Kuznetsian. Rather, it was chiefly what Kuznets wrote. As a graduate student, I collaborated on several studies of national income with Raymond T. Bowman, the economics department chairman and a great admirer of Kuznets. Thanks largely to Bowman’s urging, I also did a thesis under Kuznets’s direction on conceptual aspects of the measurement of economic growth. As a result of these two lines of work, I read virtually everything Kuznets had written on national income and economic growth. It was this reading that demonstrated for me the scope, depth, and brilliance of Kuznets’s mind.

Kuznets believed that insight into other times and places started not from economic theory but from knowledge of the facts – especially quantitative facts. It is typical of Kuznets that one of his rare speculative pieces, “Towards a Theory of Economic Growth,” is mostly devoted to summarizing the facts that growth theory must explain. In the present age of endogenous technical change and the “new” growth theory, this article remains well worth reading (Kuznets 1955, see also Kuznets 1966).

Kuznets also believed that it is important to know the scholarly literature of specialists in the study of other times and places. As work on my dissertation led to a growing interest in economic development and away from macroeconomic policy, Kuznets channeled me into an interdisciplinary seminar on South Asia, where I came into contact with scholars doing humanistic and social science research on India and came to know some leading Indian scholars such as N. V. Sovani. Kuznets also encouraged my tutelage in the literature of economic history by Daniel Thorner, who was himself an eminent scholar of Indian economic history…

This three-year project affected my development in two ways. For one thing, it gave me my first practical experience in economic measurement. I learned firsthand what had already been clear from Kuznets’s writings: that there is no measurement without theory (Kuznets 1948a, b). I also came to respect the mission of the NBER as originally conceived by Mitchell. This was to build a broad quantitative base of economic measures that would further the “cumulation of economic knowledge” (Burns 1948; Kuznets 1947, 33–4). In my personal experience, the value of this philosophy is demonstrated by the fact that, in economic history, the most often cited work of mine is still my estimates of state income done in the 1950s as part of the Kuznets–Thomas project.

But these notions about the importance of economic measurement ran strongly against the tide of mainstream economics. I can still remember the shock and sense of betrayal I felt one day when economic theorist George Stigler, himself an NBER staff member and eventual Nobel laureate, opined that a doctoral dissertation providing historical estimates of the U.S. balance of payments was not appropriate for a Columbia University Ph.D. in economics….

But economics alone is not enough -- and this is why I am a reluctant economist. We cannot comprehend the world about us without knowledge of the facts and insights provided by the other social sciences. Economics is a starting point, but only a starting point, in the application of social science to the world’s problems. As I reflect on my own philosophy, instilled by Kuznets and molded by experience, it boils down to a few words -- it is good to be an economist, it is better to be a social scientist.”

Related;

"The Story of a Reluctant Economist” in Michael Szenberg and Lall Ramrattan (eds.), Reflections of Eminent Economists.

Why Isn't the Whole World Developed?

"The Economics of Happiness,” Daedalus, 2004

Some Blog coverage of writings by Easterlin; Aplia Econ Blog, Environmental Economics, Canadian Scorecard Weblog, Economics Unbound, The Fly Bottle, Happiness and Public Policy

On Kuznets; from Econlib, Biographical Memoir of Kuznets

*Somebody needs to expand the Wikipedia article on Kuznets. I also checked the Google Book search and Amazon search inside the book on The Reluctant Economist; it seems to me that the Amazon is the better one, with Google being more restricted.

‘Free the Curricula, Free the Textbooks’- A Wikiality?

Two articles on the history of Wikipedia via Marginal Revolution; The Hive and Can Wikipedia conquer expertise?

Another explanation from The Economist;

“This success has made Wikipedia the most famous example of a wider wiki phenomenon. Wikis are web pages that allow anybody who is allowed to log into them to change them. In Wikipedia's case, that happens to be anybody at all. The word “wiki” comes from the Hawaiian word for “quick”, but also stands for “what I know is...”. Wikis are thus the purest form of participatory creativity and intellectual sharing, and represent “a socialisation of expertise”, as David Weinberger, who is currently writing a book on collaborative intelligence, puts it.

Among the new media, wikis are the perfect complement to blogs. Whereas blogs contain the unedited, opinionated voice of one person, wikis explicitly and literally allow groups of people to get on the proverbial “same page”. This is the main reason for the failure of a Los Angeles Times experiment with wikitorials, described in the previous article. Wikis are good at summarising debates, but they are ill-suited for biased opinion.”

Here’s Colbert’s attempt at explaining the Wikipedia; see also this video.

The major innovation I’m looking forward is when the Wikibooks gets a real take off- I don’t think it’s wikiality!

Related Links;

Best coverage of the Wikipedia amongst the blogs is at at Ross Mayfield’s Weblog.

Wikimania 2006: Opening Session with Jimmy Wales

Ten - or maybe a dozen - Things that Will Be Free

Wikimedia Foundation

Internet encyclopaedias go head to head; Jimmy Wales' Wikipedia comes close to Britannica in terms of the accuracy of its science entries, a Nature investigation finds.

The Faith-Based Encyclopedia

A couple of interesting posts by John Quiggin; Wikipedia and Sausages, Wikipedia-economics-category-project, When co-operation trumps competition

The Wealth of Networks

Multimedia;
Digital Maoism; here is the transcript.
Interviews from a Survey of New Media in The Economist; Andreas Kluth, technology correspondent
David Sifry, Founder and CEO, Technorati
Chris Anderson, Editor-in-Chief of Wired
Jerry Michalski, founder and president of Sociate
Paul Saffo, Director, Institute for the future

Researching with Wikipedia- introductory videos

Brion Vibber has worked on MediaWiki and Wikipedia's; an engineers view

Somebody Not Happy with Wikipedia

The Academy of Economic Blogs

A worth reading list of recent posts for economics students from across the blogs;

The Dismal Science of Freedom

What future for European jobs?

Advice for taking economics exams – for high school students.

Fridays Academy from Poverty and Growth Blog; the latest is on Inflation

From Mahalanobis; Measuring Sector TFPs, Podcasts- Economic Growth, Schooling, Random Lecture Notes; Hypothesis Testing

Boudreaux on the Minimum Wage

The Fight Against Global Poverty

Lazy Thinking

Milton and Rose Friedman

An Army of Consumers

Tragedy of the Commons

"Comparative Advantage, Comparative Advantage, Wherefore Art Thou, Oh Comparative Advantage?"

How Would You Solve the Deficit Problem?

McCloskey: "The Bourgeois Virtues"

'That Devil from the West'!

Postwar Economics

A Tale of Two Dragons- China’s Trade Surplus and Inflation

What Matters and Why?

Krugman and Income Inequality

Related; Econ4u

It all depends on who you’re!

Russ Roberts at Café Hayek recently posted a puzzle of a tourist who goes to a remote island for a vacation where barter is practiced- they don’t use money.

Here’s something that recently happened;

“International supermodel Kate Moss and a cohort of celebrity friends ran up a $500 000 bill when they stayed at Huvafen Fushi resort last week. But the owners reportedly agreed to forgo any payment in return for positive press publicity.”

Be sure to check the answer to the puzzle here.

Other blogs discussing the puzzle; The Stalwart, The Faren Report

Related; Kate splashes out on Maldives detox

Worth Reading… It’s All Numbers

Links to a couple of articles and blog posts that discusses mathematics and statistics in the news;

Putting a Number on Happiness- The Numbers Guy.
More on the Happy Planet Index.

"The 200,000 people of Vanuatu -- a South Pacific nation composed of 83 islands, with an agricultural economy and corporate headquarters of file-sharing service Kazaa -- are the happiest on earth, according to a wave of recent articles….

The problem is, no one has asked Vanuatuans how happy they are. The ranking was based on extrapolating happiness levels from other countries."

I'm told that in Bhutan for the census they include a question on happiness. From a small sample of people I've met Bhutanese seem more happy than the one Vanuatuan I've met.

Cheney's One Percent Doctrine- John Allen Paulos

"Suskind describes the Cheney doctrine as follows: "Even if there's just a 1 percent chance of the unimaginable coming due, act as if it is a certainty. It's not about 'our analysis,' as Cheney said. It's about 'our response.' … Justified or not, fact-based or not, 'our response' is what matters. As to 'evidence,' the bar was set so low that the word itself almost didn't apply."

How a statistical formula won the war (via The Amateur Economist)

Lying with Statistics: Today's Example

Recent UN Reports on Development Themes

It continues to puzzle me the number of reports that continue to be published on development themes by multilateral agencies; the following list is only from the UN.

There is lot of talk about harmonization of donor practices- shouldn’t multilateral agencies harmonize production of research and reports?

The World Economic and Social Survey (WESS) 2006;

“According to the World Economic and Social Survey 2006, in the industrialized world, the income level over the last five decades has grown steadily while it has failed to do so in many developing countries, thereby causing a rise in already high world inequality.

Greater income divergence is partly explained by a rising number of growth collapses. Countries with weak economic structures and institutions and low infrastructural and human development have less capacity to gain from global markets

The importance of strong institutions and good governance for economic growth is now widely recognized. But contrary to some prescriptions, immediate institution of large-scale reform is not a necessary condition for growth, or even sometimes beneficial in the short run. The experience of China and Vietnam indicates that incremental reforms, if credible and perceived as steps along the way to further change, can be highly effective in shepherding strong and sustained growth.”

Millennium Development Goals Report 2006

World Economic Situation and Prospects 2006

“The world economy is expected to continue to grow at a rate of 3 per cent during 2006. The United States economy remains the main engine of global economic growth, but the growth of China, India and a few other large developing economies is becoming increasingly important. On average, developing economies are expected to expand at a rate of 5.6 per cent and the economies in transition at 5.9 per cent, despite the fact that these economies may face larger challenges during 2006.

Driven by higher oil prices, inflation rates have edged up worldwide. Core inflation rates, which exclude the prices of energy and food, have been more stable, indicating that the pass-through of higher oil prices to overall inflation is limited.”

Building Inclusive Financial Sectors for Development (The Blue Book)

THE LEAST DEVELOPED COUNTRIES REPORT, 2006

"UNCTAD´s Least Developed Countries Report 2006 argues that the development of domestic productive capacities and concomitant expansion of productive employment opportunities is the key to sustained economic growth and poverty reduction in the least developed countries (LDCs).

The Report calls for a paradigm shift from a consumption- and exchange-oriented approach to poverty reduction towards a production- and employment-oriented approach. It analyzes three basic constraints on the development of productive capacities in the LDCs -- poor physical infrastructure; weaknesses of the domestic private sector and supporting financial systems and knowledge systems; and insufficient demand and thus underutilization of domestic resources and capabilities as well as weak incentives to invest and innovate -- and it identifies some key policy priorities to overcome these constraints, including the mobilization of underutilized domestic potentials and a re-balancing of the sectoral allocation of aid."

For the latest UN publications see the UN Pulse blog. This is one area where other international agencies may follow
UN's lead- institutions like the WorldBank don't have a blog covering their new publications in a systematic way.

Here you can look at the titles that are popular at World Bank and IMF. This guide is also very useful- RESOURCES FOR LIBRARIANS IN DEVELOPING COUNTRIES.

Interview with Five Economists

Russ Roberts interviews Robert Barro. Listen to the podcast and see the additional readings. Cyberlibris is reading Robert J. Barro's latest book: Nothing is Sacred: Economic Ideas for the New Millenium. Be sure to comment about the puzzle at the end of the podcast.

Jagdish Bhagwati on immigration

Anwar Ibrahim- fired practitioner

Judge Posner- lawyer economist; the interview starts around the middle of the program

Larry Summers- a not so well liked economist (by some) who had two Nobel laureate uncles. See related post ‘Fearful Pig’ is resigning as the President.

Note; Some of the podcasts are available for limited time, so download now.

How to get free access to JSTOR!

According to Kevin Kelly,

“The New York Public Library is not the only major library to offer memberships to non-residents. If you live anywhere in California, I recommend getting a library card to the San Francisco Public Library, which is free, and which does give you access to the coveted JSTOR online journals. Only downside: you need to show up at the library in person to get your card.”

(via Strategic Board- a great search tool for blog posts)

Related;

JSTOR: A History by Roger C. Schonfeld

Robots and writers and Googlers, oh my!- a lot of Google Talks are being put online

55 Ways to Have Fun with Google

Scientific publishing- Creative destruction in the library; Free access to research is proving more expensive than hoped. But it is spreading, nevertheless- PubMed Central, PLoS One, BioMed Central

Open Access to Research

Free the Journals

Fame vs Fortune: Micropayments and Free Content

Sharing the Online Community

More on Survey Design

Andrew gives some advice on question-wording effects of survey design and avoiding double-barreled questions- issue mentioned talks about a CBS News poll on Iraq.

Earlier I commented about a useful book on the topic Survey Design and a review of the book.

If You Had One Day to Live

My high school teacher used to tell of the joke that if you had one day to live you would want to spend the day in the statistics class- it would seem so much longer.

I wish he had shown this video – Statz 4 Life. (via SSS blog)

Related;

Statistics 101, Como se dice "I hate statistics"?, The Law of One Price

The scholars behind the stout; That fundamental ideas in applied mathematics would be developed in a brewery sounds sufficiently improbable, but the story is true and intriguing. The statistical technique most often used to study events of low probability was discovered by a Polish mathematician and an employee of the Guinness brewery.

History of Monte Carlo

Learning Economics with Milton Friedman

Free to Choose (via DBRB)

Capitalism and Freedom and Milton Friedman on Limited Government (via Division of Labour)

A conversation with Milton Friedman

Interview with Milton Friedman

Related earlier posts;

An Email from the Michael Jordan of Economics

The Secret of Gary Becker

One million dollars or all the world's knowledge of economics?

Quote of the Day- Economists are not boring

Armchair Economics Reading List

Is 'Chalk and Talk' the Best Way to Teach Economics?

The following paper suggests that the ‘chalk and talk’ is still the preferred option for educating budding economists- the median of 83 percent remaining almost the same over the last 10 years.

A Little More Than Chalk and Talk: Results from a Third National Survey of Teaching Methods in Undergraduate Economics Courses by Michael Watts and William E. Becker. Here’s the abstract;

“In 1995, 2000, and 2005 the authors surveyed U.S. academic economists in the United States to investigate how economics is taught in four different types of undergraduate courses at postsecondary institutions. They looked for any changes in teaching methods that occurred over this decade, when there were several prominent calls for economists and post-secondary instructors in other fields to devote more attention and effort to teaching, and to make greater use of active, student-centered learning methods, with less use of direct instruction or “chalk and talk.” By 2005, although standard lectures and chalkboard presentations were clearly still the dominant teaching style in all types of economics classes, there was evidence of slow growth in the use of other teaching methods, including classroom discussions (especially teacher-directed discussions) and computer-generated displays (such as Power Point). A growing number of instructors provided students with a prepared set of class notes. Computer lab assignments were increasingly common in econometrics and statistics courses, and Internet database searches were used by a growing (though still small) minority of instructors in all types of classes. Classroom experiments were used by a small share of instructors in introductory courses, but almost never in other kinds of courses. Assignments or classroom references to the popular financial press, sports, and literature, drama, or music were used somewhat more often. Cooperative learning methods were rarely used in most types of courses.”

For Comment; How would economics teaching be like a decade from now? What incentives can we give for instructors to move away from the ‘chalk and talk’ style of teaching?

How to be a good student of Economics

“What makes a good student? It takes more than mathematics. Just because acolytes learn the intricacies of formal reasoning doesn’t mean they necessarily will have anything to say. But then, neither does background knowledge of specifics seem to have to do with it. Apt pupils come from all walks of life, and one of the best young economists of recent years lived in the former Soviet Union until he was sixteen. Scientific temperament is a plus (“desire to seek, patience to doubt, fondness to meditate, slowness to assert, readiness to reconsider, careful to dispose and set in order,”, was how Sir Francis Bacon described it long ago). But the essential gift among those who will have an impact is an aptitude for “thinking economically,” for translating every problem into one that can be addressed by means of the discipline’s standard kit of tools, devising new tools as required.”

David Warsh, “Knowledge and the Wealth of Nations”, p. 11-12, emphasis mine.

Related:

Getting a PhD in Economics, is it worth it? Professors Wendy Stock and John Siegfried discuss with James Reese aspects of the process of getting a PhD in Economics. Areas covered: How much will academic economists make over their lifetime? What is the chief reason for dropping out of a Ph.D. program? What is the reason for the dreaded ABD all but dissertation barrier? Is getting a PhD in economics worth the cost? Wendy and John coauthored articles entitled "Attrition in Economics Ph.D. Programs" and "Time-to-Degree for the Economics Ph.D. Class of 2001–2002." Download the podcast while it is free.

It's the humanity, stupid- Tim Harford interviews Gary Becker

Great Minds in Economics: Paul Samuelson

The Power of Survey Design

In a previous post I mentioned about the book by Giuseppe Iarossi on survey design. Here is a link to the video and a podcast of the book presentation.

Related;
Did you see the broken light?
Two posts from Junk Charts; When nothing works and Glass Half Full

Central Banks Teaching Economics

New York Fed has a new feature on their website; Course Readings for University Educators. You pick a course and the relevant readings come up. A great idea other central bankers should copy (via Harry Clarke).

Economists and Journalists

“Report on government as you would report to your siblings on the rental agent your mother hired to handle her Florida condo.”

I found Susan Rasky and Brad De Long’s list of advice to economists and journalists quite interesting. Federal Reserve Bank of Minneapolis also conducts a course for journalists- Supply, Demand & Deadlines – which I think is a great idea for other central banks to follow.

The best thing may be to just read op-eds and columns written by economists and well known economic columnists. I’ve tried to give a sample below;

Tyler Cowen’s latest Economic Scene column - Investing in Good Deeds Without Checking the Prospectus.

John Quiggin’s -When co-operation trumps competition- explains how the internet is changing our ideas about innovation

Virginia Postrel- Cash for kidneys -Legalizing incentives could encourage transplant donations, says a healthy donor.

Thomas Sowell , Random thoughts- When you have 90 percent of what you want, think twice before insisting on the other 10 percent.

John Kay- The Magic Kingdom could save Venice from destruction. If Venice were owned by the Disney Corporation, Venice would not be in peril

Paul Krugman- The Phantom Menace

Truth, bullshit and economics - Samuel Brittan

Edward Lotterman- Supply and Demand Effects Vary by Market

Arnold Kling- Are You a Conservative? Try this test.

Steven E. Landsburg- How Much Should Hotel Web Access Cost? Sometimes it's free. Sometimes it's $20 a day. Why?

Tim Harford- Buy! Buy! Buy! Sell! Sell! Sell! The rational explanation for stock market frenzies and crashes.

Yahoo Finance has columns by Charles Wheelan

Martin Wolf , David Warsh,, Daniel Gross, Sebastian Mallaby are also good.

Steven Levitt- Freakonomics

Sachs, Rogoff, Stiglitz, Schiller and Brad De Long have columns at Project Syndicate.

Rogoff’s open letter to Stiglitz is a classic.

Andrew Liegh has some advice for budding op-ed writers.

Let us know your favorite columnists.

Journal Editors and Book Editors

Every edition of the Australian Economic Review has a section called ‘For The Student’- the latest one looks at the world of economic publishing ; From Manuscript to Publication: A Brief Guide for Economists (freely available online for now) by John Creedy;

“Journal editors are not selected according to their knowledge of the printing and publishing business, or even their administrative abilities. Many therefore know little, and care even less, about those aspects. If journal editors face no sanctions, have little knowledge of the technical and commercial aspects of publishing, and have no financial incentives regarding outcomes, it is inevitable that factors such as power, influence and ego play a role, thereby damaging the selection process. Many editors nevertheless do provide a valued and disinterested service to the scholarly community. It is perhaps surprising how well the system generally works, though there are huge variations in editorial standards.

Book editors are, in contrast, paid professionals whose remuneration depends on the sales of books they commission. There is thus a clear market sanction. There is indeed much mobility within the industry, as successful editors are ‘headhunted’. Book editors typically know the publishing business well from many points of view, having often ‘worked their way’ through a number of departments.

The behaviour patterns of the different editors are therefore, not surprisingly, quite distinct. Journal editors simply wait for submissions to arrive. With limited space available, emphasis is given to the selection process involving the rejection of a large proportion of submitted papers. Editors are generally, though not always, well known and often highly regarded academics. They are confident of their own ability to make judgements regarding the quality of papers submitted, though an important role is played by referees, as discussed below. Furthermore, an editor may consult an editorial board before making a final decision, but this is not common. Journal editors have little, and merely distant, contact with authors. Given the search for original highquality papers, past reputations of authors typically count for little.”

Related;

What are the top economics journals? The American Economic Review and Journal of Political Economy are the two most important journals according to Tyler Cowen.

Broader, Deeper; But four new journals will appear, about two years from now. Their titles have only just been announced (pending a copyright check). The plan is to call each the American Economic Journal: the subtitle to follow the colon. It's clear that the formulators hope the new "aggregate field journals" will render old boundaries more porous, and cause new distinctions to evolve.

Tom Maschler - the writer's business; Today, what do publishers want, or the secrets of the book trade. Tom has been a publisher all his working life—revered for being chairman of Jonathan Cape when it was the best literary publishing house in Britain. He introduced Gabriel Garcia Marquez, Thomas Pynchon, Joseph Heller, Tom Wolfe and Kurt Vonnegut to British readers. Doris Lessing, John Fowles, Arnold Wesker, Roald Dahl, Ian McEwan, Julian Barnes, Martin Amis, and Salman Rushdie were also part of the Cape line-up during his reign. As the story goes, booksellers would simply buy whatever he had to offer just because of his reputation. But since he retired from the publishing world he for the first time went over to the other side of the fence and wrote a book. It's called Publisher and he wrote it because he was recruited by an agent. Listen to the podcast.

Book Recommendation; Writing for the Information Age: Elements of Style for the 21st Century by Bruce Ross-Larson

Note: I’ve classified this post under a new category called ‘Academy’ with a view to present primers and ‘explainers’ to Econ 101 students. I would also suggest reading regularly the 5 blogs - Greg Mankiw’s, Austrian Economists, Aplia Econ blog and EconLog.