Economics Archive

Ergas’ Analysis Shows Up The Dilettantes

Henry Ergas  nails, with forensic thoroughness, the nonsense that passes for regulation review at the Federal level. In truth, it’s a nonsense at all levels of government, but the Feds are the paradigm case under the current government. The way in which he does it – seriously, looking to the long term –  calls to […]

Y=C+I+G

Steve Kates at Catallaxy Files and assorted other Austrian-influenced economists have been banging on about how it can be misleading   to drive policy based on the national accounting identity  Y=C+I+G (and extensions). At its most banal the identity implies that – in theory – total income in an economy equals total expenditure. It’s the […]

Gleeful Embrace of Others’ Suffering

Mark Thoma is an ideological economist. Most are; economists in general come to economics with their politics fixed, looking to rationalise what they already believe (harsh call). But Prof Thoma is up there with econ-shrieker Krugman, and occasional over-the-topper Brad DeLong. Thoma approvingly quotes another economist, Robert H Frank, writing in the NY Times about […]

ABC: Criticise Any Government But Ours

So the ABC is whingeing about their news site being blocked by India on the grounds it may stir up public unrest (read, ethnic violence). I await with unrealistic expectation that the ABC will defend other Australians’ rights to speak in a way that embarrasses the Australian government. And I await the equally important statement […]

Self Defeat – The Essential Finkelstein

One of the joys of watching policy development is how it completely ignores the infinite flexibility of the people it seeks to regulate. Every policy should go through a rigorous Response Scenario attack from the most creative public-private team imaginable. Just to work out what the best-and-brightest would do to subvert the policy goal. And […]

Interesting Idea, Lousy Source

Voters don’t realise that electing a new government has the limited effect of changing about eight people in a single Minister’s office, who may oversee 15,000 entrenched public servants. So Godwin Grech’s suggestion  of a post-election spill of all SES-level public servants is worth considering. Pity that coming from him it undermines its own argument […]

Doctors Aren’t Always Right on Healthcare

As much as I agree with medico concerns over increasing levels of administrative costs, it doesn’t follow that there needs to be less organisational management in health delivery. Scratch most hospital specialists and you find a visceral dislike of administrators – not as individuals, but as a functional class. If you’ve ever experienced some of […]

Latest Tax Talk Needs More

As an open economy our corporate tax rate has to be on a par with comparable countries. But  this latest policy suggestion from Treasurer Swan’s  business tax working group looks like a good idea that’s undercooked. The plan: drop the tax rate by 2% and fund the $3.6bn a year by reducing concessions in research, […]

Nope, It Still Represents Culture

So now some more serious discussion emerges on Israel’s comparative economic performance after Mitt Romney’s culture comment, and Jordan Weissmann in The Atlantic  highlights four concrete reasons behind Israel’s success: Learning from hyperinflationary disaster: …”crafted a grand bargain that slashed government spending, massively devalued the currency, and severed the tie between wages and prices. It […]

EPA v Solar Bonus Scheme: Something’s Rotten

Just thought I’d mention a bit on government spending priorities, now that Kevin Gosper has made it clear just how unable lifetime insiders are to make a considered decision about what’s important. More money on elite sport, or should we put it to the NDIS, which is struggling against a government profligacy unseen in this […]

Rational-Actor Model The Core Question

Direct statement of the core challenge facing economics from one of the top (not so young) young economists, Xavier Gabaix  at Big Think.  The whole post  is great,  with eight economists identifying theoretical directions (and follow the links). The most central open question in economic theory, as I see it, is how to model realistic […]

Culture Matters: Why Do We Pretend Otherwise?

Another Romney storm in an American teacup. But it’s one that recurs in the world of social policy and economics. Romney made some remarks about culture and prosperity in Israel, comparing the economic effects of Israeli and Palestinian cultures. It may have been a hand-waving generalisation that you wouldn’t accept from a student, but it […]

Nudge Fads, Behavioural Econ & Paternalists

Tyler Cowen links to an interesting paper on economic research that relies on behavioural economics. Behavioural Economics identifies psychological biases that lead to irrational decisionmaking, and frequently leads to suggestions of ‘nudge policy’, where policymakers use those biases to drive policy outcomes. Only problem is, nudge approaches aren’t part of a transparent policy discussion, and […]

Ignorance, Vested Interest and Age-Old Rhetoric

There has been a firestorm over Pres. Obama’s remarks on success and reward, which culminated in this beauty: If you’ve got a business, you didn’t build that. Somebody else made that happen. Full video here, but an extract: If you were successful, somebody along the line gave you some help. There was a great teacher […]

Hard Truths About Public Sector IT

Despite the major changes to Information Communications Technology (ICT) strategy in the NSW public sector, everywhere I turn lately I’ve been hit with the great unstated barrier: lousy execution. Changes to strategy are great: common platforms, sensible IT architecture planning, decent systems to eliminate duplicated projects and so on are an absolute must. But a […]