1. MR pointsto this crazy finding. Both Japan’s and Canada’s Philips curves looks like their countries !
2. WSJ Blog explains why Fed has been intervening in markets lately. WSJ has some excellent assorted links for the day.
3. Mankiw revisits National Income Accounting.
4. BS carries an excellent interview of Hernando De Soto, the Peruvian economist who made world take notice of importance of property rights.
India has fuzzy property rights, but so does China. So, why does so much foreign investment go into China?
I don’t have a view about India but it is not possible to have a market economy without fungible property rights. At the end of the day, a market economy is nothing but the exchange of property rights. Lots of countries have sections where these rights don’t exist, but they know how big this section is — I don’t think you know how big this section is in India.
In the case of China, 250 to 300 million people on the east coast do have property rights and that’s why they’re doing well. In the western and northern parts, a billion people don’t have such rights and that is why there is much less economic activity there, and that’s why the Gini coefficient is so high there, that’s where the revolts were (there were 75,000 revolts in China last year). Where you don’t have formal property rights, people tend to encroach upon your rights. Marx’s diagnoses and policies were all wrong, but his predictions were right!
5. Shayamal Majumdar in BS shares how Google uses technology for recruiting.
6. Cyril Shroff opposes reforms in legal markets. Ajay Shah scoffs at the idea and argues Shroff was a great beneficiary of market liberalisation in India. Nobody wants to let others share the pie.