Celebrating humanity's flourishing through the spread of capitalism and the rule of law
06 Jul 2015 Leave a comment
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.
10 Jun 2015 Leave a comment
in business cycles, currency unions, economic growth, Euro crisis, global financial crisis (GFC), great recession, macroeconomics Tags: Eurosclerosis, France, Germany, Italy, Spain
Spain's economic growth is being touted as a success story. Don't tell the Spaniards: on.wsj.com/1M45yzI http://t.co/pm4DAd1qkF—
Nick Timiraos (@NickTimiraos) June 03, 2015
06 Jun 2015 Leave a comment
in defence economics, war and peace Tags: Germany, World War II
Occupation zones in Germany, 1947. The territories east of the Oder-Neisse line, ceded to Poland & the Soviet Union http://t.co/iY3aHRaCga—
History Facts 247 (@historyfacts247) June 05, 2015
04 Jun 2015 Leave a comment
in economic history, labour economics, unions Tags: British economy, France, Germany, Italy, trade union density, union power
Figure 1: French, German, Italian and British trade union densities, 1960 – 2013
Source: OECD Stat Extract
03 Jun 2015 Leave a comment
in economic growth, economic history, job search and matching, labour economics, labour supply, macroeconomics, unemployment Tags: Eurosclerosis, France, Germany, Italy
Figure 1: French, German and Italian unemployment rates, 1956 – 2013
Source: OECD StatExtract.
28 May 2015 Leave a comment
in economic history, politics - USA, public economics, taxation Tags: British economy, France, Germany, growth of government
Figure 1: Tax revenue as percentage of French, German, British and US GDP, 1965–2013
Source: OECD StatExtract.
24 May 2015 Leave a comment
in economics of love and marriage, labour economics, labour supply, occupational choice, population economics Tags: economics of family, Germany, household production, marital division of labour, marriage and divorce
The gender gap in housework narrows as men in Germany approach and enter retirement family-studies.org/how-mens-retir… http://t.co/5Q8IaHkSC4—
Inst. Family Studies (@FamStudies) May 04, 2015
21 May 2015 Leave a comment
in economic history Tags: British economy, France, Germany
Figure 1: French and German real GDP per capita are as percentage of British GDP per capita (1990 Int. GK$PPP), 1820 – 2010
Source: The Maddison-Project, http://www.ggdc.net/maddison/maddison-project/home.htm 2013 version.
18 May 2015 Leave a comment
in transport economics Tags: bicycle, Germany
Own a bike
Jordan 5%
Egypt 18%
Turkey 26%
Russia 42%
UK 50%
US 53%
India 62%
Germany 80%pewresearch.org/fact-tank/2015… http://t.co/XRd5V8lY2o—
Conrad Hackett (@conradhackett) May 15, 2015
12 May 2015 Leave a comment
in applied price theory, economic growth, economic history, great depression, labour economics, labour supply, macroeconomics, politics - USA, Public Choice, public economics, taxation Tags: Edward Prescott, Euroclerosis, France, Germany, labour supply, Robert Lucas, taxation and labour supply
Figure 1 shows that Americans work the same hours per year pretty much the entire post-war period. By contrast, there is been a long decline in hours worked in Germany and France. The large drop in 1992 was German unification.
Figure 1: annual hours worked per working age American, German and French, 1950 – 2013
Source: OECD StatExtract and The Conference Board Total Economy Database™,January 2014, http://www.conference-board.org/data/economydatabase/
The long decline seemed to tally with the disproportionately sharp rise in the average tax rate on labour income, including social security contributions in France and Germany. When tax rates on labour income, including social security contributions stabilised in about 1980, hours worked stabilised in all countries.
Figure 2: average tax rate on labour income,USA, Germany and France, 1950 – 2013
Source: Source: Cara McDaniel.
Some pander to the great vacation theory of European labour supply. This is the hypothesis of a large increase in the preference for leisure in the European Union member states. That is, mass voluntary unemployment and mass voluntary reductions and labour supply by choice by Europeans. They just decided to work less.
This is not the first outing for the great vacation theory of labour supply. In the late 1970s, Modigliani dismissed the new classical explanation of Lucas and Rapping (1969) of the U.S. great depression in which the 1930s unemployment was voluntary unemployment – the great depression was just a great vacation – with the following remarks:
Sargent (1976) has attempted to remedy this fatal flaw by hypothesizing that the persistent and large fluctuations in unemployment reflect merely corresponding swings in the natural rate itself.
In other words, what happened to the U.S. in the 1930’s was a severe attack of contagious laziness!
I can only say that, despite Sargent’s ingenuity, neither I nor, I expect most others at least of the non-Monetarist persuasion, are quite ready yet. to turn over the field of economic fluctuations to the social psychologist!
As Prescott has pointed out, the USA in the Great Depression and France since the 1970s both had 30% drops in hours worked per adult. That is why Prescott refers to France’s economy as depressed. The reason for the depressed state of the French (and German) economies is taxes, according to Prescott:
Virtually all of the large differences between U.S. labour supply and those of Germany and France are due to differences in tax systems.
Europeans face higher tax rates than Americans, and European tax rates have risen significantly over the past several decades.
Countries with high tax rates devote less time to market work, but more time to home activities, such as cooking and cleaning. The European services sector is much smaller than in the USA.
Time use studies find that lower hours of market work in Europe is entirely offset by higher hours of home production, implying that Europeans do not enjoy more leisure than Americans despite the widespread impression that they do. Europeans did not work less. They worked more on activities that were not taxed.
04 May 2015 Leave a comment
in currency unions, economic growth, economic history, Euro crisis, macroeconomics Tags: Eurosclerosis, France, Germany, Italy, post-war reconstruction
Figure 1: Real GDP per German, Italian and French aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1950-2013
Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics
Figure 2: Real GDP per German, Italian and French aged 15-64, converted to 2013 price level with updated 2005 EKS purchasing power parities, 1.9 per cent detrended, 1950-2013
Source: Computed from OECD Stat Extract and The Conference Board, Total Database, January 2014, http://www.conference-board.org/economics
A flat line in figure 2 means real GDP growth of 1.9% per year, which is trend growth. A rising line means growth that is higher than trend rate; a falling line means growth at below the trend rate of 1.9%. 1.9% is the trend rate of growth of the USA in the 20th century. Figure 2 shows that:
28 Apr 2015 Leave a comment
in business cycles, economic growth, Euro crisis, global financial crisis (GFC), great recession, macroeconomics, politics - USA Tags: British economy, Canada, Eurosclerosis, France, Germany, Italy, Japan, recoveries from recessions
UK recovery: stronger than Italy, weaker than US & Canada. http://t.co/C0TEsbzMm3—
Jonathan Portes (@jdportes) April 28, 2015
22 Apr 2015 Leave a comment
in Euro crisis, macroeconomics, population economics Tags: ageing society, European Union, Eurosclerosis, France, Germany, labour demographics
BofA-ML: Working age population projections, a serious problem for Germany http://t.co/eStgQePoVP—
Fabrizio Goria (@FGoria) March 30, 2015
17 Apr 2015 Leave a comment
in economics of regulation, Euro crisis, global financial crisis (GFC), great recession, job search and matching, labour economics, macroeconomics, unemployment Tags: employment law reform, employment protections laws, Eurosclerosis, Germany
#Unemployment rate in #OECD area fell to 7.0% in Feb, w/42.9mn people jobless bit.ly/1FNK0W5 #stats http://t.co/RPUqvlR3mQ—
(@OECD) April 13, 2015
The countries with the more liberal labour markets are recovering fastest from the Great Recession and the Global Financial Crisis.
EZ unemployment rates http://t.co/vnfti1hhqe—
(@cigolo) March 31, 2015
This includes Germany where there were major labour market reforms a couple of years before the onset of the Global Financial Crisis. For that reason, German unemployment rates didn’t rise much in 2008 and after and are now falling quite rapidly because of their labour market liberalisations. Germany has the lowest unemployment rate in Europe.
UK youth unemployment high but lower than 20 other EU member states. #Budget2015 http://t.co/eBa8W9rr6C—
RBS Economics (@RBS_Economics) March 18, 2015
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