19 Jul 2015
by Jim Rose
in business cycles, economic growth, economic history, fiscal policy, job search and matching, labour economics, macroeconomics, unemployment
Tags: Celtic Tiger, equilibrium unemployment rate, Eurosclerosis, Germany, Ireland, Italy, natural unemployment rate, Rance, Spain
Figure 1 shows large contrasts in time path of equilibrium unemployment rates. For example, French and Italian equilibrium unemployment rates haven’t changed much since about 1986.
Figure 1: equilibrium unemployment rates, France, Germany, Italy, Ireland and Spain, 1968 – 2016
Source: OECD Economic Outlook June 2015 via OECD StatExtract..
Figure 1 also shows some fortuitous ups and downs in the German equilibrium unemployment rate. This estimate was available only from after German unification.
The equilibrium German unemployment rate rose from 6% to above 8% on the eve of the global financial crisis. Fortunately for Germany, major labour market reforms brought the equilibrium unemployment rate down as Germany moved into the global financial crisis.
The Spanish equilibrium unemployment rate had been terrible since about 1980, started to fall in the 1990s, then skyrocketed even before the onset of the global financial crisis – see figure 1.
There have been ups and downs in the Irish equilibrium unemployment rate – see figure 1. It was as high as 14% at the end of the Irish great depression of the 1970s and 1980s. The equilibrium Irish unemployment rate was 8% at the heyday of the Celtic tiger then slowly rose in the lead up to the global financial crisis.
18 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, comparative institutional analysis, economics of bureaucracy, economics of regulation, industrial organisation, law and economics, property rights, Public Choice, rentseeking, survivor principle
Tags: doing business, Eurosclerosis, Greece
15 Jul 2015
by Jim Rose
in Euro crisis, global financial crisis (GFC), great recession, job search and matching, labour economics, labour supply, macroeconomics, unemployment, welfare reform
Tags: equilibrium unemployment rate, Eurosclerosis, natural unemployment rate, unemployment duration
10 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, comparative institutional analysis, constitutional political economy, currency unions, fiscal policy, global financial crisis (GFC), income redistribution, liberalism, macroeconomics, Marxist economics, Public Choice, public economics, rentseeking
Tags: Eurosclerosis, expressive voting, Greece, rational ignorance, rational irrationality, sovereign default
06 Jul 2015
by Jim Rose
in budget deficits, business cycles, currency unions, economic growth, Euro crisis, financial economics, fiscal policy, global financial crisis (GFC), macroeconomics
Tags: bank runs, banking panics, Eurosclerosis, Germany, Greece, sovereign defaults
Greece is a tiny part of the European economies so it doesn’t matter that much to the rest of the European Union what happens to Greece. The only people will notice the sovereign default of Greece once the breathless journalism has died down are Greeks themselves as they rebuild their banking and monetary system against a background of a government run by coffee shop Marxists.
06 Jul 2015
by Jim Rose
in budget deficits, business cycles, currency unions, economic growth, Euro crisis, fiscal policy, labour economics, labour supply, macroeconomics, unemployment
Tags: Eurosclerosis, Greece
05 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, comparative institutional analysis, economics of regulation, entrepreneurship, industrial organisation, international economics, law and economics, property rights, survivor principle
Tags: doing business, Eurosclerosis, Italy, rule of law, Russia, transitional economies
Figure 1: Doing Business rankings, Russia and Italy, 2014
Source: World Bank Doing Business 2015.
It is rather disturbing that it is a lot easier to register property and enforce contracts in Russia than in Italy and far harder to pay your taxes in Italy. Once again, Italy’s saving grace is the ability to trade across borders Because of its membership of the European Union.
03 Jul 2015
by Jim Rose
in applied price theory, applied welfare economics, currency unions, economic growth, economics of bureaucracy, economics of regulation, Euro crisis, health and safety, income redistribution, industrial organisation, labour economics, law and economics, minimum wage, occupational regulation, property rights, Public Choice, rentseeking, survivor principle, unions, welfare reform
Tags: cost of doing business, Eurosclerosis, Greece, Italy, PIGS, Portugal, Spain
Figure 1: Doing Business rankings, PIGS, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are a dog of a place to enforce a contract. The long-suffering taxpayer is better off paying taxes in Greece than in Italy! Not surprisingly, trading across borders is the greatest strength in doing business in the PIGS. The European Union does have some benefits.
Figure 2: Doing Business rankings, Greece and Italy, 2014
Source: World Bank Doing Business 2015.
All in all, Italy and Greece are equally bad places to do business and Italy is much worse when it comes to taxes. About the only saving graces of Italy is the registration of property and the protection of minority interests in companies.
Figure 3: Doing Business rankings, Spain and Portugal, 2014
Source: World Bank Doing Business 2015.
Spain and in particular Portugal are much better places to do business than Italy and Greece.
29 Jun 2015
by Jim Rose
in economic history, entrepreneurship, income redistribution, politics - USA, Public Choice, public economics, rentseeking
Tags: Eurosclerosis, taxation and entrepreneurship, taxation and investment, taxation and the labour supply, top 1%
28 Jun 2015
by Jim Rose
in comparative institutional analysis, constitutional political economy, economics of bureaucracy, economics of regulation, industrial organisation, Public Choice, rentseeking, survivor principle
Tags: cost of doing business, endogenous growth theory, Eurosclerosis, Spain
20 Jun 2015
by Jim Rose
in economic growth, fiscal policy, human capital, labour economics, labour supply, macroeconomics, politics - USA, public economics
Tags: endogenous growth theory, EU, Eurosclerosis, laffer curve, optimal tax theory, taxation and entrepreneurship, taxation and investment, taxation and the labour supply
13 Jun 2015
by Jim Rose
in budget deficits, currency unions, economic growth, Euro crisis, fiscal policy, labour economics, labour supply, macroeconomics
Tags: ageing society, early retirement, Eurosclerosis, Greece, labour force participation, old age pensions, older workers, social insurance, taxation and the labour supply, welfare state
A country that spends nearly a fifth of its GDP on old-age pensions with surprisingly few people over the age of 55 working should not be surprised when it finds itself in financial difficulty.
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