Interview with Robert Lucas on the global financial crisis and the great recession
17 Dec 2014 Leave a comment
in budget deficits, business cycles, economic growth, fiscal policy, global financial crisis (GFC), great depression, great recession, macroeconomics, monetarism, monetary economics Tags: bank runs, GFC, great depression, great recession, Robert E. Lucas
My bullet train trip deep into the Japanese mountains
15 Dec 2014 Leave a comment
in fiscal policy, transport economics
My first trip on the bullet train was zipping from Tokyo to Kyoto and Osaka and then to Hiroshima. A great experience was my trip to Japan in 1993. An excellent tourist destination. I recommend Japan to anyone as a tourist destination. The language barrier is not a problem – there are plenty of English signs.
When I returned to Japan as a student in 1995, the last of my bullet train trips was into the Japanese mountains.
The class field trip travelled on a spur on the Bullet train to the Yamagata city in Yamagata prefecture.
This bullet train line weaved its way through the mountains and rarely hit any sort of speed. The bullet train was no faster than the ordinary Japanese trains I have taken through the mountains in Japan.
When I asked my Professor of Land Transport when we are heading back from our field trip at an isolated rural train station waiting for the Bullet train, why was the Bullet train to such a remote place, he said that the Secretary General of the Liberal Democratic party always wanted the Bullet train to come to his home district.
Yamagata prefecture has a population of about 1 ½ million. Yamagata city has a population of about a quarter of 1 million. That is smaller than Greater Wellington.
The final station in this spur into Yamagata prefecture has a population of 40,000. Perhaps a Bullet train should come to my suburb in the eastern suburbs of Wellington?
Ideas and Growth Lecture with Nobel Laureate Robert E. Lucas Jr
12 Dec 2014 1 Comment
in economic growth, fiscal policy, macroeconomics, Robert E. Lucas Tags: ideas and growth, Robert E. Lucas
Tom Sargent’s Keynote Address BYU CPEC 2012 on taxation and redistribution
11 Dec 2014 Leave a comment
in fiscal policy, labour economics, labour supply, macroeconomics, public economics Tags: taxation and the labour supply, Tom Sargent
The shape of the welfare state in the USA
08 Dec 2014 Leave a comment
in fiscal policy, income redistribution, labour economics, labour supply, politics - USA, public economics, welfare reform Tags: effective marginal tax rates, Obama care, poverty traps, welfare reform
One in five Americans on Medicaid; this image does not include those on Medicare –those over 65 who get their healthcare paid by the government.
The Grumpy Economist: What’s wrong with macro?
06 Dec 2014 Leave a comment
in business cycles, fiscal policy, global financial crisis (GFC), great recession, macroeconomics, monetary economics, politics - USA Tags: Macroeconomics
Operations Research and The Revolution in Aggregate Economics – Edward Prescott 2012
18 Nov 2014 Leave a comment
in applied welfare economics, business cycles, economic growth, fiscal policy, global financial crisis (GFC), great depression, great recession, macroeconomics Tags: Edward Prescott, real business cycle theory
The extension of recursive methods to dynamic equilibrium modelling spawned a revolution in aggregate economics.
This revolution has resulted in aggregate economics becoming, like physics, a hard science and not exercises in storytelling.
Operations research played a major role in the development of practical methods to model dynamic aggregate economic phenomena and to predict the consequences of policy regimes.
Subsequently recursive methods were used to develop a quantitative theory of aggregate fluctuations and other aggregate phenomena.
Average Marginal Income Tax Rates for New Zealand, 1907-2009 (WP 12/04) — The Treasury – New Zealand
07 Nov 2014 Leave a comment
in applied price theory, fiscal policy, politics - New Zealand Tags: Marginal tax rates, public economics, public finance
Note: Average marginal tax rate calculations exclude the impact of ACC levies, the Benefit system and the Family Tax Credit (FTC) system which, at various times since the 1970s, involved lump sum transfers to lower income families with children that were withdrawn at higher income levels at rates of up to 30c/$, thereby adding to effective MTRs.
Comment: The average marginal tax rate has been pretty stable in New Zealand since about 1990 excepting for a drop in the late 1990s and then an increase in 1999.
via http://www.treasury.govt.nz/publications/research-policy/wp/2012/12-04
An Open Letter to Paul Krugman | David K. Levine
31 Oct 2014 3 Comments
in budget deficits, business cycles, comparative institutional analysis, economics of religion, fiscal policy, global financial crisis (GFC), great recession, macroeconomics
Some graphs on the great deviation on both sides of the Atlantic
31 Oct 2014 Leave a comment
in economic growth, Euro crisis, fiscal policy, global financial crisis (GFC), great depression, macroeconomics Tags: Eurosclerosis, GFC, Great Geviation, great recession
Figure 1: Actual and potential GDP in the US
Sources: Congressional Budget Office, Bureau of Economic Analysis
Figure 2: Actual and potential GDP in the Eurozone
Sources: IMF World Economic Outlook Databases, Bloomberg
HT: Larry Summers
Friday graph: why Ireland is broke
31 Oct 2014 5 Comments
in fiscal policy, global financial crisis (GFC), macroeconomics, monetary economics Tags: GFC, Ireland
I am planning to blog on why the Irish economic crisis of recent years was caused exclusively by government, and in particular, government responses that made an ordinary recession into a depression
This is a graph courtesy of the Institute of Public Affairs in Melbourne, an impressive Australian thinktank.
It comes from the Irish government’s own 140 page ‘National Recovery Plan‘ published last week.
It is amazing reading.
- From 2000 to 2009 average public sector salaries increased 59%
- In 2004, 34% of income earners were exempt from tax. In 2010, 45% were exempt
- In 2007 property taxes generated 6.7 billion euros. In 2010 that figure will be 1.6 billion
- In 2009 interest on government debt was 8% of tax revenues. In 2014 it will be 20%.
Naysayers try to tell you that the Celtic Tiger was a myth and that free-market policies brought the Irish economy down.
The truth is exactly the opposite. Liberalisation caused the Irish economy to surge until a return to big government crushed it. Membership of the eurozone, poor banking regulation and the government guarantee of…
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A Perspective on Ireland’s Economy
19 Oct 2014 Leave a comment
in business cycles, fiscal policy, global financial crisis (GFC), macroeconomics, Public Choice Tags: GFC, Ireland
Dot point 4 is the key. The bank guarantee caused the depression.
Philip Lane is Professor of International Macroeconomics at Trinity College Dublin. He is also a managing editor of the journal Economic Policy, the founder of The Irish Economy blog, and a research fellow of the Centre for Economic Policy Research. His research interests include financial globalisation, the macroeconomics of exchange rates and capital flows, macroeconomic policy design, European Monetary Union, and the Irish economy.
Last week he visited New Zealand as a guest of the Treasury, the Reserve Bank, and Victoria University. During his visit he presented this guest lecture on the troubled Irish economy, drawing on his recent report to the Irish Parliament’s finance committee on ‘Macroeconomic Policy and Effective Fiscal and Economic Governance’.
Some highlights from his talk (also reported here by Brian Fallow in the New Zealand Herald) were:
- Ireland’s is a real depression: 15% fall in GDP 2007-2010
- The Celtic Tiger 1994-2001 was no…
View original post 216 more words
Paul Krugman (1998) on the fiscal politics of the minimum wage/living wage movement
19 Oct 2014 Leave a comment
Earl A. Thompson on fiscal and monetary policy in the Great Recession
09 Oct 2014 Leave a comment
in budget deficits, business cycles, economic growth, fiscal policy, great recession, macroeconomics, monetary economics Tags: crowding out, Earl A. Thomson, fiscal policy, great depression, great recession, permanent income hypothesis, Ricardian equivalence
Utopia, you are standing in it! 
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