One could not say it any better:
Archive for the ‘Blogs to Read’ Category
This blog was a supporter of the charter-cities project floated by Prof. Romer. It got some support from Honduras which became the first country to allow chart-cities. There were some grand plans to get the project going with things like transparency commission with people like George Akerlof, Romer, Nacy Birdsall of CGDEV etc. The region selected to develop charter-city was called REDs. The color RED got another meaning…
There were sceptics from day one over the project which grew once Honduras was selected as the first country for experimentation.
Acemoglu/Robinson in their wnf blog have been running series of posts on central planning.
They started the topic in early August questioning why Soviet Union picked up central planning which was inefficient way to create institutions. The usual theme is that Bolsheviks were influenced by Marx and hence implemented central planning in USSR. So it is seen that central planning existed because of Marxian ideology.
You knew back even then A/R duo would be unimpressed and point instead to the role of political power and centralised institutions in picking central planning.
So, in the recent post they say central planning existed because of control:
The association between horses and wealth was forged millennia ago. In fact, the first people known to celebrate hierarchies of power, whose inequalities of wealth were integral to their society and culture—the people you could call the first 1 percent—were the first people to ride horses.
Horse domestication occurred before written history and left few clear archaeological remains. Based on Sumerian seals with the earliest known depictions of people on horseback, riding has traditionally been dated to the Bronze Age, around 2000 B.C., in Mesopotamia.
Read the piece for further details..
There has been super fireworks following Romney’s remarks in recent Israel visit.
He gave reasons why Israel has developed and Palestine has not:
I was thinking this morning as I prepared to come into this room of a discussion I had across the country in the United States about my perceptions about differences between countries. And as you come here and you see the GDP per capita for instance in Israel which is about 21,000 dollars and you compare that with the GDP per capita just across the areas managed by the Palestinian Authority which is more like 10,000 dollars per capita you notice a dramatic, stark difference in economic vitality. And that is also between other countries that are near or next to each other. Chile and Ecuador, Mexico and the United States.
He cites culture as one of the main reason for development.
Culture makes all the difference. And as I come here and I look out over this city and consider the accomplishments of the people of this nation, I recognize the power of at least culture and a few other things.
He also cites work of Jared Diamond and Steven Landes as well. Read the post for more details.
This has led to some interesting discussion:
- Acemoglu/Robinson on Why Nations fail blog react saying culture is not the reason. They of course list the importance of education and institutions for Israel’s development. For Palestine they are not sure.
Jared Diamond clarifies that Romney got his book/research wrong. And even Landes’s book. He stresses on the importance of geography in development (which Acemoglu does not agree to). And within geog, you have many factors - latitude, access to sea, agriculture.
Though I do not agree to Diamond’s comments on India:
What does this mean for Americans? Can we assume that the United States, blessed with temperate location and seacoasts and navigable rivers, will remain rich forever, while tropical or landlocked countries are doomed to eternal poverty?
Of course not. Some tropical and subtropical countries have become richer despite geographic limitations. They’ve invested in public health to overcome their disease burdens (Botswana and the Philippines). They’ve invested in crops adapted to the tropics (Brazil and Malaysia). They’ve focused their economies on sectors other than agriculture (Singapore and Taiwan).
Conversely, geographic advantages don’t guarantee permanent success, as the growing difficulties in Europe and America show. We Americans fail to provide superior education and economic incentives to much of our population. India, China and other countries that have not been world leaders are investing heavily in education, technology and infrastructure. They’re offering economic opportunities to more and more of their citizens. That’s part of the reason jobs are moving overseas. Our geography won’t keep us rich and powerful if we can’t get a good education, can’t afford health care and can’t count on our hard work’s being rewarded by good jobs and rising incomes.
Not sure where that analysis on India came from.
Krugman reacts to his Poland visit remarks.
Here is a recent report on job creation from Romney’s econ advisers. The advisers are all top names – Glenn Hubbard of Columbia University’s , Greg Mankiw of Harvard University, John Taylor of Stanford University and Kevin Hassett, of the American Enterprise Institute. They should be offering to write statements as well for Romney.
Whatever the criticism, many things to learn and debate from all this discussion. Keep them coming Gov. Romney!!
A super post on econ history by Catherine Rampell of Economix Blog.
She puts up a photo of a NY Herald clip of 1837 which is just amazing and so true even today.
Whether we may agree to his views or not, no one really comes near Paul Krugman when it comes to simplifying economics.
In his recent post, he helped understand Optimal Currency Area on which Euro was supposed to be based.
Frances Woolley in this superb article points to a nice case from Canada’s bus route pricing. It seems private sector is not doing a proper job.
One of the ideas that I find it hardest to get through to people is that there is nothing intrinsically efficient about private sector provision. Without competition, the private sector is just as prone to waste and inefficiency as the public sector. The only difference is the form that waste takes.
The private sector will tend to jack up prices to maximize profits. That’s wasteful because high prices deter people from consuming goods, even if those goods benefit consumers. Think, for example, of pharmaceuticals, where the monopoly power created by patent protection leads to prices so high that some people are not able to take medications that would prolong their lives, or improve their life quality.
The public sector has its own forms of waste – without shareholders pushing for high profits and low costs, it is more vulnerable to capture by rent-seeking employees. The point is that there is little evidence to suggest that the public sector is intrinsically more wasteful than the private sector.
For competition, information matters:
Unfortunately, when people grasp the point that competition is good, they fall into another trap: believing that more providers and fewer regulations automatically generate pressures for lower prices and higher quality. Competition is only effective if people are fully informed. Given two bus companies with publicly available safety records, consumers can make a fully informed choice, and reward the company that offers the best service at the lowest price.
The quality of goods such as health care or education is, however, extremely difficult to measure. Some pundits seemed to be astounded when English universities reacted to fee de-regulation by charging the maximum fees allowed. It was obvious that this was going to happen! People, in the absence of other information, use price as a signal of quality. Above all, they want the best possible quality education. No university is going to advertise itself as “Cheaper than Oxford, and almost as good.” When price indicates quality, people are reluctant to cut prices.
A super blog which brings some amazing insights..
Lots of discussions going on in Latvia. Some call it success and others a disaster.
The first camp econs say Latvia shows how economy can gain if fiscal austerity is done well. They also add pegged exchange rate system can work provided one can do internal adjustment which other Eurozone economies have failed in doing. The second camp says if Latvia is a success model, then one should not really bother about growth in depressions. Its economy has grown but is still way below the pre-crisis levels etc. The first is looking at %ages and second at absolute numbers..
Here are the views: