Archive for the ‘Economics – macro, micro etc’ Category

Martin Luther King’s 95 theses to protest against catholic church vs. Steve Keen’s 33 thesis to protest against economics

December 19, 2017

Brilliant post by Frances Coppola.

How Prof Steve Keen who has long dissented against current economics teaching has taken a leaf from one one of the buggest dissents/protests in human history:

Five hundred years ago, so legend has it, a dissident priest called Martin Luther nailed a list of 95 “theses” to the door of the Castle Church in Wittenburg. His action launched the Protestant Reformation. 

Last week, the dissident economist Steve Keen “nailed” a list of 33 Theses to the door of the London School of Economics. His aim was to launch a Reformation in economics as significant as the religious Reformation that Luther started. It was a bold gesture.


However, Coppola finds the the 33 theses disappointingt:



Impact of Brexit on UK households

December 19, 2017

Research by Michael Sposi and Kelvinder Virdi of Dallas Fed:

The effects of Brexit through higher barriers to trade could cost British households the equivalent of 428 British pounds annually or
$580 in 2016 prices. Effects across the rest of the EU would vary, but countries that trade extensively with the United Kingdom, such
as Ireland, stand to incur the greatest losses.


Pink seats for women in Bangalore buses (and how did pink become the colour for girls/women?)

December 18, 2017

To avoid men from sitting in women reserved seats on buses, the authorities have decided to color the reserved seats as pink:

Women passengers travelling in BMTC buses will no longer need to argue with men travelling in seats reserved for them.

The BMTC has decided to change the colour of seats reserved for women to pink. The move comes in the wake of increasing complaints against men travelling in seats meant for women passengers.

Speaking to reporters on Tuesday, transport minister H M Revanna said all new buses will have women-only seats in pink. “We will extend the initiative to the remaining buses in a phased manner,” he said.


This question has always been of interest to me: When and how did Blue become color for boys and pink for girls?

Here is a piece which shows how it all started (based on the book by Jo B. Paoletti, a historian at the University of Maryland: Pink and Blue: Telling the Girls From the Boys in America)

Why have young children’s clothing styles changed so dramatically? How did we end up with two “teams”—boys in blue and girls in pink?  “It’s really a story of what happened to neutral clothing,” says Paoletti, who has explored the meaning of children’s clothing for 30 years. For centuries, she says, children wore dainty white dresses up to age 6. “What was once a matter of practicality—you dress your baby in white dresses and diapers; white cotton can be bleached—became a matter of ‘Oh my God, if I dress my baby in the wrong thing, they’ll grow up perverted,’ ” Paoletti says.

The march toward gender-specific clothes was neither linear nor rapid. Pink and blue arrived, along with other pastels, as colors for babies in the mid-19th century, yet the two colors were not promoted as gender signifiers until just before World War I—and even then, it took time for popular culture to sort things out.

For example, a June 1918 article from the trade publication Earnshaw’s Infants’ Department said, “The generally accepted rule is pink for the boys, and blue for the girls. The reason is that pink, being a more decided and stronger color, is more suitable for the boy, while blue, which is more delicate and dainty, is prettier for the girl.” Other sources said blue was flattering for blonds, pink for brunettes; or blue was for blue-eyed babies, pink for brown-eyed babies, according to Paoletti.

In 1927, Time magazine printed a chart showing sex-appropriate colors for girls and boys according to leading U.S. stores. In Boston, Filene’s told parents to dress boys in pink. So did Best & Co. in New York City, Halle’s in Cleveland and Marshall Field in Chicago.

Today’s color dictate wasn’t established until the 1940s, as a result of Americans’ preferences as interpreted by manufacturers and retailers. “It could have gone the other way,” Paoletti says.

So the baby boomers were raised in gender-specific clothing. Boys dressed like their fathers, girls like their mothers. Girls had to wear dresses to school, though unadorned styles and tomboy play clothes were acceptable.

Amazing research people keep doing…

Economics alone cannot dictate Test cricket..

December 18, 2017

It is not very often that we hear the words economics and cricket in one article/interview.

BCCI CEO – Rahul Johri – in this interview speaks about the need to keep test cricket going even if economics do not support the 5-day version:


Travelling along the ancient silk road today…what does it look/feel like?

December 18, 2017

Fascinating photo essay by Paul Salopek.

He travels through the old silk route:


Rediscovering Friedman’s Capitalism and Freedom

December 18, 2017

Peter Lewin reminds how Friedman questioned JFK’s famous words against all odds:

I first read the following paragraph as a nerdy college student sometime between 1966 and 1968:  

In a much quoted passage in his inaugural address, President Kennedy said, ‘Ask not what your country can do for you – ask what you can do for your country.’ It is a striking sign of the temper of our times that the controversy about this passage centered on its origin and not on its content. Neither half of the statement expresses a relation between citizen and his government that is worthy of the ideals of free men in a free society.”

This is the first paragraph of chapter one of Milton Friedman’s classic little book Capitalism and Freedom (C&F), first published by the University of Chicago Press in 1962, and since republished numerous times unaltered. The italics are mine.

I credit this book, more than any other work, with transforming my thinking about the meaning of freedom.

I can still recall, after half a century, the shock that this paragraph produced in me as I read it.I could scarcely believe that Friedman had the temerity to so brazenly criticize that most admirable and dynamic of world leaders, the young, charismatic prince of the free world, the prophet of a new tolerant age, John Fitzgerald Kennedy. What could he possibly mean?


Time to read the book again..

The role of industrial policy in South Korea’s industrialisation

December 15, 2017

Nathaniel Lane, Post doc student at MIT looks at the topic:


The changing geography of US manufacturing during the 20th century

December 13, 2017

Fascinating research by Profs Nicholas Crafts and Alex Klein.

They look at how economic geography has changed in US manufacturing from 1880-1997:

Religious faith can help people to build better cities?

December 12, 2017

Prof. Chris Ives and and PhD candidate Andre Van Eymeren think so and here is how.


Does finance lead to economic growth? Summary of literature…

December 12, 2017

Alexander Popov of ECB looks at the biggest question on finance: does it lead to economic growth and if yes how?

He sums up the literature so far:

This paper reviews and appraises the body of empirical research on the association between financial markets and economic growth that has accumulated over the past quarter-century. The bulk of the historical evidence suggests that financial development affects economic growth in a positive, monotonic way, yet recent research endeavors have provided useful and important qualifications of this conventional wisdom. Moreover, the proliferation of micro-level datasets has enabled researchers to study more precise links between theory and measurement. The paper highlights the mechanisms through which financial markets benefit society, as well as the channels through which finance can slow down long-term growth. 

Nice bit..

How Haiti helps us think differently about history

December 7, 2017

Prof Malik Gaechlem of MIT in this piece:

Back in the 18th century, Haiti was the most lucrative sugar-growing territory in the world, a key hub in the transatlantic economy, and, like the United States and France, the site of a democratic revolution. Battles over modern rights, slavery, and global commerce all figure prominently in Haiti’s history, though relatively few people know it. 

To MIT historian Malick Ghachem, this is both an oversight and an opportunity. Ghachem, a Haiti expert, thinks we too often treat the country as a blank spot on the historical map. Then again, his teaching and writing help fill this void by connecting Haiti to the larger historical currents that have shaped our world.

“The fundamental responsibility of the historian is to uncover a story, put it in a new perspective, and show why it was important,” Ghachem says.

Indeed, Haiti, once a French colony called Saint-Domingue, became the first country with universal legal equality, after its slave rebellion. But its path toward this breakthrough was complex. As Ghachem chronicled in his first book, the French feared such a possibility for years and instituted a legal regime that sought to keep slavery intact by controlling manumission — the freeing of slaves by their owners — while only occasionally punishing planters for their brutality.

And there was both planter and slave unrest during the 1720s in Haiti, as Ghachem chronicles in a second book he is now completing. Back then the colony, like others in the Atlantic, was controlled by a monopoly trading company — in this case, the French Indies Company — and it was a white rebellion against the company’s slave-trading monopoly that helped produce Haiti’s large-scale sugar plantations. Studying Haiti as an integral part of this transatlantic world adds depth and nuance to our knowledge about democracy and globalization — for readers and MIT undergraduates alike.

“Our students want to learn something that’s going to make them think differently,” Ghachem says. “And Haiti is good for that. It’s an unfamiliar place to a lot of people, a place that doesn’t figure in the calculus of a lot of disciplines. If you want to think about economic history or international law or human rights and you bring Haiti into the picture, it disturbs the conversation and upsets the terms of the debate.”

Hmm..History/Economic history of countries is mostly interesting.

Here is his interview held earlier where he talks about How history helps solve today’s issues..

The 1% vs 99% problem in US has been existing for much longer than thought…

December 7, 2017

John Mervin of BBC has a list of quotes of chairpersons of Federal Reserve.

Marriner Eccles (1934-48) quote remains as relevant as ever:

Marriner Eccles (in office, 1934-48) was a banker in Utah, whose testimony to Congress calling for government action to solve the US’s financial and economic woes brought him to the attention of President Roosevelt, and eventually the job of transforming the US’s central bank.

Mr Eccles once said: “The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out, the game will stop.”

US has been having this concentration of wealth in 1% and overborrowing for rest 99% for a much longer time than imagined….

The Principle of Comparative Advantage 200 years on: Introducing a new eBook

December 6, 2017

Prof. Simon Evenett of University of St. Gallen has edited an e-book to celebrate and debate Ricardo’s comparative advantage idea which completes 200 years in 2107.

He says the idea is to figure its relevance today:


Primer on European Banking Union..

December 6, 2017

Riksbank economists – Markus Ehrenpil and Mattias Hector- have a short primer on the EBU:

The Banking Union is the result of the work within the EU on improving regulation and supervision of the financial sector that began after the financial crisis. The purpose of the Banking Union is to create a structure for the joint supervision and management of banks in crisis, together with a joint system for deposit insurance. Large parts of the Banking Union are now in place, but some work remains to be done before the European Banking Union is fully up and running.

Just like anything European, it is quite complicated. We see both forces of making things European yet keeping them local remaining…

South Indian bank uses blockchain for remittances…

December 5, 2017

One can say blockchain is like an operating system on which several apps cab be made. Bitcoin is one such app. Banks and governments have mostly opposed bitcoin as it takes away enormous monetary powers from them.

However, authorities are warming up to using other apps on the blockchain . Singapore central bank chief highlighted how AP govt can use blockchain technology.

Thrissur-based South Indian Bank recently tested blockchain for remittances:


Uncovering drinking habits of 16th century Ireland..

December 1, 2017

Fascinating research by Dr Susan Flavin:

You spend years “burrowing away on dusty documents”, then a line in your research – admittedly attention-grabbing – about workers in Ireland in the 16th century quaffing rations of 14 pints of beer a day, gets noticed, and suddenly historian Dr Susan Flavin is getting calls from all over the place. Images of burly stone masons lurching around drunkenly wielding medieval hammers and chisels come to mind.

Flavin, a lecturer in early modern history at Anglia Ruskin University, has been researching 16th century social and economic history for years, and says today that people have “jumped on” the beer angle. She’s had an offer from someone who wants to recreate a 16th century oat brew and send her bottles, and a well-known craft brewery has also offered help in recreating the methods, for which she’s hoping for research funding.

So, if people routinely quaffed large quantities of beer daily, were most people going about their daily business three sheets to the wind? Flavin’s research shows beer was a vital source of calories and nutrition for workers. For example records from January 1565 show stone masons working at a quarry in Clontarf, Dublin, were provided with an allowance of 14 pints of ale per day by the proctor of Christ Church Cathedral. Gives a whole new meaning to plastered.

“People drank beer because it was a source of calories, as well as for thirst and social reasons,” says Flavin. “It was seen as good for energy and health, and was thought to have restorative properties.” She calculates that 16th century beer may had a high calorific value, providing between 400-500 calories per pint, compared to 180-200 calories in a pint today.

Stone masons were engaged in hard physical labour all day and people thought that beer made hardworking men sweat, which was regarded as good, she says. It may also have been sweeter and nourishing.


Her work on food habits:


A primer on the rise of populism and a way forward

November 30, 2017

Gulzar posts about why rise of populism is closely linked to inequality and gulf between 1% and 99%.

Why is it happening? But this consensus was accompanied by a less benign bipartisan elite convergence (more of it latter) which effectively ended up capturing the economic and political establishment. 
The rapid and fairly inclusive economic progress achieved in the period helped underpin this consensus and paper over fissures that were developing due to forces like trade liberalisation, globalisation, de-unionisation, and skill-biased technological changes. But once growth started slowing, for a variety of factors, these fissures started to show up.
But mainstream political parties, captives as they had become of elite interests, failed to see the breakdown in social consensus. The liberal elites too became caught up in their rhetoric.    
Nothing has been more emblematic of this isolation of elites from the electorate than the staggering levels of economic inequality, which has been widening at a rapid pace since the millennium. As the graphic below shows, in the US, the share of national income going to the top 1% has nearly doubled from 11% in 1980 to 20% in 2014. 
Fair amount of graphs etc to emphasise his point.
What is the way out? Gulzar quoting Prof. Rodrik says “the most promising solution may be to let the house burn down completely!”…




How to Succeed in Business (According to a 15th Century Trade Merchant)

November 30, 2017

In 1458 a trade merchant Benedetto Cotrugli from Venice (where else?) wrote this book: The Book of the Art of Trade. It has now been translated in English and not surprisingly most of the lessons apply even today.

Julia Hanna in HBSWK writes:


An interdisciplinary model for macroeconomics

November 29, 2017

Andy Haldane and Arthur Turrell of Bank of England in this paper:

Macroeconomic modelling has been under intense scrutiny since the Great Financial Crisis, when serious shortcomings were exposed in the methodology used to understand the economy as a whole. Criticism has been levelled at the assumptions employed in the dominant models, particularly that economic agents are homogeneous and optimising and that the economy is equilibrating. This paper seeks to explore an interdisciplinary approach to macroeconomic modelling, with techniques drawn from other (natural and social) sciences. Specifically, it discusses agent-based modelling, which is used across a wide range of disciplines, as an example of such a technique. Agent-based models are complementary to existing approaches and are suited to answering macroeconomic questions where complexity, heterogeneity, networks, and heuristics play an important role.

 Lots of stuff to figure in the paper..

How old style chits still work as money: A case from Bangalore Buses..

November 28, 2017

With all this rise of digital/crypto currencies, the world is increasingly becoming complicated to figure. So stories of simple money forms are always welcome.

Rajagopalan Venkataraman of Times of India writes on how a Bangalore city bus conductor manages the currency show in his/her bus economy:


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