So Paul Krugman laments in his post that policy makers across Europe have blindly signed up to the "Austerity only" ticket. He cites some evidence which I find fairly convincing. I just want to raise the point that what he says cannot be used as a critique against the Monti government.
Basically what he's saying is that Monti was installed as a puppet of European creditor nations to make sure that austerity would be imposed and the country's government debt would be continued to be serviced. They put in Monti to get their money back. The facts are however, Krugman says, that austerity policies don't work. In fact, the linked vox.eu article shows research indicating that financial markets panicked, forcing southern Europeans into austerity. Had the ECB acted sooner, markets would have calmed earlier, and austerity would not have been needed. I find this research quite convincing (that may be a result on the extreme scarsity of data based research on this subject, combined with the extreme abundance of ideologic brainwash).
To come back to my point: You have to give Monti the benefit that he was called in to put out a fire, illustrated in the bottom graph on this page:
http://countryeconomy.com/risk-premium/italy
It illustrates how much more the Italian government had to pay to debt finance than Germany on the eve of Berlusconi's exit in November 2011. The country was actually on the verge of bankruptcy, as a result of a financial market panic, not a change in fundamentals. The spread was widely cited as unsustainable. This is not the same as George Osborne talking about Britain being in danger of potential bankruptcy and the continued need for austerity, a belief which is not at all widely held. Krugman's critique applies to Britain, I would say.
Don't bring in Monti in november 2011 and there is all sorts of hell breaking loose. Default and dismemberment of the euro for example. Big costs all around.
The Krugman critique applies to policy makers in creditor countries. It applies to Monti if you believe that he had any leverage at the ECB and could have forced them into guaranteeing Italian (and other southern european bonds) earlier. Which is unlikely at best.
Oct
20
A Nation of Real Estate Agents
UPDATE: Following up on a comment below, I used another data source, ONS JOBS02 for the labor market statistics. I report the findings below.
I read a series of articles related to the goings of the UK housing market, the likely effects of the new Help To Buy scheme, the 10% increase in mean London house price over the last year, and employment statistics. I failed to reproduce some numbers cited in the economist (below). This post talks about this.
It all starts with this blog post on the economist:
http://www.economist.com/blogs/buttonwood/2013/09/house-prices
It talks about many things, amongst which employment and housing completions, and how the UK seems likely to be embarking on another round of debt-fueled growth.
I read a series of articles related to the goings of the UK housing market, the likely effects of the new Help To Buy scheme, the 10% increase in mean London house price over the last year, and employment statistics. I failed to reproduce some numbers cited in the economist (below). This post talks about this.
It all starts with this blog post on the economist:
http://www.economist.com/blogs/buttonwood/2013/09/house-prices
It talks about many things, amongst which employment and housing completions, and how the UK seems likely to be embarking on another round of debt-fueled growth.
Jun
15
Pizza Dough for 14 people
For loss of a better place, I'll store my recipe for homemade pizza dough here. This will make dough for 14 people.
2kg strong white flour (no self-raising or other extras) 4 sachets of yeast, 7g each (not the super fast bicarbonate stuff) Salt Sugar Olive Oil Water The main problem is to get the right consistency, i.e. how much water to add. You'll have to do some experiments here.
2kg strong white flour (no self-raising or other extras) 4 sachets of yeast, 7g each (not the super fast bicarbonate stuff) Salt Sugar Olive Oil Water The main problem is to get the right consistency, i.e. how much water to add. You'll have to do some experiments here.
Jun
12
Austrian Army Retreats from UN Mission at Syrian Border
I've got some questions regarding this issue, maybe someone out there has a clue.
The Austrian contingent was 300 out of 1000 soldiers
source: http://www.guardian.co.uk/world/2013/jun/06/israel-angry-austria-golan-heights.
The Austrian contingent was 300 out of 1000 soldiers
source: http://www.guardian.co.uk/world/2013/jun/06/israel-angry-austria-golan-heights.
Jun
7
Income Distribution in London
Inspired by the Institute of Fiscal Studies' "Where do you fit in" application, where people can find out their position in the UK's income distribution, I wanted to find out how the picture in London looks like. Quite different. If you are in a very high percentile nationwide, high incomes of mainly financial sector employees in London make sure that you find yourself a couple of ranks further down.
May
19
Update to PSID panel builder for R: psidR
I just pushed the most recent version of the PSID panel data builder introduced a little while ago. Got some user feedback and made some improvements. The package is hosted on github.
News:
I added a reproducible example using artificial data which you can run by calling 'example(build.panel)'. This means you can try out the package before bothering to download anything and it provides a simple test of the main function.
News:
I added a reproducible example using artificial data which you can run by calling 'example(build.panel)'. This means you can try out the package before bothering to download anything and it provides a simple test of the main function.
Apr
29
Stats in the Court Room Hands on Tutorial
I got intrigued by the numbers presented in this news article talking about the re-trial in the Amanda Knox case. The defendants, accused and initially convicted of murder, were acquitted in the appeal's instance when the judge ruled that the forensic evidence was insufficiently conclusive. The appeals judge ignored the forensic scientist's advice to retest a DNA sample, because
"The sum of the two results, both unreliable… cannot give a reliable result," he wrote.
"The sum of the two results, both unreliable… cannot give a reliable result," he wrote.
Apr
18
130 litres of gasoline to produce fertilizer used for 1 acre of corn
I just finished reading the extraordinary book tomorrow's table by P. Ronald and Raoul Adamchak. (I linked to Ronald's blog). In this post I wanted to quickly redo a calculation Adamchak does on page 16, where he explains to his students how much energy is required to produce the fertilizer used to grow one acre of corn using conventional agriculture (as opposed to organic methods).
Apr
14
PSID data set builder for R
Economists frequently use public datasets. One frequently used dataset is the Panel Study of Income Dynamics, short PSID, maintained by the Institute of Social Research at the University of Michigan.
I'm introducing psidR, which is a small helper package for R here which makes constructing panels from the PSID a bit easier.
One potential difficulty with the PSID is to construct a longitudinal dataset, i.e. one where individuals are followed over several survey waves.
I'm introducing psidR, which is a small helper package for R here which makes constructing panels from the PSID a bit easier.
One potential difficulty with the PSID is to construct a longitudinal dataset, i.e. one where individuals are followed over several survey waves.
Mar
6
Transaction Costs when Buying a House in the UK
I was recently asked by a friend whether it's worth to buy a house in the UK. That is, assuming they could put down the money, whether it was worth buying as opposed to renting. Apart from obvious things like the expected length of stay in one place, the interest on mortgages and how prices might develop and so forth, they were interested in particular in the amount of transaction costs they were likely to face: fees, taxes and so forth.
Feb
25
A follow up on Krugman and Italy
So Paul Krugman laments in his post that policy makers across Europe have blindly signed up to the "Austerity only" ticket. He cites some evidence which I find fairly convincing. I just want to raise the point that what he says cannot be used as a critique against the Monti government.
Basically what he's saying is that Monti was installed as a puppet of European creditor nations to make sure that austerity would be imposed and the country's government debt would be continued to be serviced.
Basically what he's saying is that Monti was installed as a puppet of European creditor nations to make sure that austerity would be imposed and the country's government debt would be continued to be serviced.
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