Archive for October 24th, 2017

Don’t fall for anything called Tax Reform….

October 24, 2017

Jeff Deist of Mises Institute has a piece. It applies to India which is struggling with its GST which ironically was billed as the biggest economic reform of the country:

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Do we understand comparative advantage?

October 24, 2017

Cafe Hayek Blog points to this interesting article by Prof Deirdre McCloskey.

Prof McC makes two major points. One Comparative advantage is not about competition but cooperation. Two, we often confuse between absolute and comparative advantage.

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How perverse incentives led to a soccer match teams scored self-goals in order to qualify!

October 24, 2017

Superb post in Managerial Econ blog:

Presumably, the primary goal of any sport governing body is to provide adequate incentive for competitors to do battle on the field (court, pitch, etc.), each striving for victory. Things don’t always turn out that way. 

My all time favorite example of the strangest (incentive-driven) spectacle in sport is from the 1994 Shell Caribbean Cup involving a match between Barbados and Grenada. 

A very poorly-conceived (though well-intentioned) tournament rule stipulated that any goals scored in overtime (and, by virtue of a sudden-death rule, there could only be one) would count double, as if the team scored two goals. The idea was to reward teams in close matches. This simple rule led to a very strange match.

Read the post in details…

Political economy of central bank appointments: Case of Italy..

October 24, 2017

One just pointed the case of Sweden where there was friction between ruling and opposition parties over appointment of central bank chief.

We are seeing similar frictions in Italy too. Moreover when it comes to such matters, how can Italy be behind? Just that this one has its own Italian drama as well.

The ruling and political party are in a friction over extension of tenure the current central bank governor:

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