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Showing posts from January, 2011

The economics zeitgeist, 30 January 2011

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This week's word cloud from the economics blogs. I generate a new one every Sunday, so please subscribe using RSS or the email box on the right and you'll get a message every week with the new cloud.

The words moving up and down the chart are listed here.
I summarise around four hundred blogs through their RSS feeds. Thanks in particular to the Palgrave Econolog who have an excellent database of economics blogs; I have also added a number of blogs that are not on their list. Contact me if you'd like to make sure yours is included too.
I use Wordle to generate the image, the ROME RSS reader to download the RSS feeds, and Java software from Inon to process the data.
You can also see the Java version in the Wordle gallery.
If anyone would like a copy of the underlying data used to generate these clouds, or if you would like to see a version with consistent colour and typeface to make week-to-week comparison easier, please get in touch.

The economics zeitgeist, 23 January 2011

Image
This week's word cloud from the economics blogs. I generate a new one every Sunday, so please subscribe using RSS or the email box on the right and you'll get a message every week with the new cloud.
The words moving up and down the chart are listed here.
I summarise around four hundred blogs through their RSS feeds. Thanks in particular to the Palgrave Econolog who have an excellent database of economics blogs; I have also added a number of blogs that are not on their list. Contact me if you'd like to make sure yours is included too.
I use Wordle to generate the image, the ROME RSS reader to download the RSS feeds, and Java software from Inon to process the data.
You can also see the Java version in the Wordle gallery.
If anyone would like a copy of the underlying data used to generate these clouds, or if you would like to see a version with consistent colour and typeface to make week-to-week comparison easier, please get in touch.

The CRIMBITS countries

Jim O'Neill at Goldmans has graciously decided to admit four, no doubt very grateful, new countries into the BRIC category.

Brazil, Russia, India and China have done quite well over the nine years since the BRICs were invented. The caveat is Russia, which remains highly dependent on oil and gas prices, and has institutions which are, shall we say, not fully trusted by everyone. But the other three have been firmly endorsed by events as serious players - well beyond the traditional emerging markets category.

The lucky new candidates are South Korea, Turkey, Mexico and Indonesia.

I am slightly surprised to see South Korea in here, as it's already an OECD member, with GDP per capita on a par with several European countries (though not quite caught up with any of the Western European EU members). It is ranked around 32nd in the world in GDP per capita - depending on exchange rates - higher than any of the original BRICs (Russia at 54 is the highest of those). But I guess if it hel…

The economics zeitgeist, 16 January 2011

Image
This week's word cloud from the economics blogs. I generate a new one every Sunday, so please subscribe using RSS or the email box on the right and you'll get a message every week with the new cloud.
The words moving up and down the chart are listed here.
I summarise around four hundred blogs through their RSS feeds. Thanks in particular to the Palgrave Econolog who have an excellent database of economics blogs; I have also added a number of blogs that are not on their list. Contact me if you'd like to make sure yours is included too.
I use Wordle to generate the image, the ROME RSS reader to download the RSS feeds, and Java software from Inon to process the data.
You can also see the Java version in the Wordle gallery.
If anyone would like a copy of the underlying data used to generate these clouds, or if you would like to see a version with consistent colour and typeface to make week-to-week comparison easier, please get in touch.

Ben behaving oddly

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Ben Goldacre (@bengoldacre) does some amazing work combatting folk mythologies in favour of science and real data. He has tens of thousands of readers and twitter followers who - mostly - agree with his philosophy. They spread the message at skeptics meetings, atheist book-signings and the pages of the Guardian.

He is a leader in showing how to expose and falsify unsubstantiated claims - not just those of homeopaths, fake-medicine enthusiasts and psychics, but also those of journalists, pharmaceutical companies and anyone at all who makes public claims.

So what happened today? Goldacre made the followingassertion on twitter this evening:



What's the difference between this and a homeopath who doesn't need evidence because he "just believes" that his medicines work? Not much.


What's especially notable is that dozens or hundreds of his followers - science aficionados all, I would have thought - replied with their own stories about which particular prices they think m…

Answering the wrong question

Michael Shuman at Curious Capitalist asks a bizarre question: Is the iPhone bad for the American economy?

His careful analysis shows that the iPhone has a finely balanced effect on the US trade deficit. It makes a negative impact if the internal components exported from America are valued at their manufacturing cost, and the assembled iPhones coming back from China are valued at full price. But if you count the design and assembly expertise as a US export, the impact is positive.

Fascinating. But completely irrelevant to the question he asks.

To see this, simply ask if the iPhone is bad for the British economy? Or how about this: is copper bad for the British economy?

Whether a product is made, mined, designed or assembled in a country is almost irrelevant to whether it's a good thing. Our lives are very much better with copper in them, even though there's a big trade deficit in copper for most countries outside of Chile.

And for the same reason, of course the iPhone is good f…

An unbiased call for tax breaks

While I would love it if this idea came true, doesn't it sound a little like special pleading? Tax breaks on market research, proposed by...three companies which spend money on market research. Oh but wait - they also have the support of "accountancy groups near Henley-on-Thames". Hmm. Don't accountancy groups also make money right now from the existing tax breaks on technological research and development? Why yes.

Is market research a good thing? Yes, just like jobs and apple pie - not famously the subject of a lot of tax breaks.

There is one good argument though, not clearly made by the article: research has a positive externality. Research allows us to test more innovations, and innovations by one party - whether successful or not - tell the rest of us something about what to try in the future. That's a good thing - but only if (like the patent system) people have to disclose the results of their research. Maybe we should offer tax breaks on disclosure of mark…

The economics zeitgeist, 9 January 2011

Image
This week's word cloud from the economics blogs. I generate a new one every Sunday, so please subscribe using RSS or the email box on the right and you'll get a message every week with the new cloud.
The words moving up and down the chart are listed here.
I summarise around four hundred blogs through their RSS feeds. Thanks in particular to the Palgrave Econolog who have an excellent database of economics blogs; I have also added a number of blogs that are not on their list. Contact me if you'd like to make sure yours is included too.
I use Wordle to generate the image, the ROME RSS reader to download the RSS feeds, and Java software from Inon to process the data.
You can also see the Java version in the Wordle gallery.
If anyone would like a copy of the underlying data used to generate these clouds, or if you would like to see a version with consistent colour and typeface to make week-to-week comparison easier, please get in touch.

Goldman, Facebook and pricing psychology

Goldman Sachs this week invested in Facebook at the - some say ridiculous - price of $50 billion.

Let's imagine for a moment that the price does not reflect the company's fundamentals. Could it still be rational for Goldman to have done this? We certainly don't associate that particular bank with being taken in by market euphoria.

Certainly they will make money by providing services to Facebook and other investors [FT, may require subscription]. But they could probably have got the same deal at a lower valuation if they really wanted to. This article in the New York Times suggests they don't really care if the value's too high, because they will make their money back by exploiting small investors anyway.

But they may well care. Indeed, there's a reason they might prefer to pay too much for their stake: it will influence future investors to pay more for the shares. We see in many product markets that the customers don't have any clear idea of the "value…

The economics zeitgeist, 2 January 2011

Image
This week's word cloud from the economics blogs. I generate a new one every Sunday, so please subscribe using RSS or the email box on the right and you'll get a message every week with the new cloud.
The words moving up and down the chart are listed here. "Happy", "new" and "year" unusually prominent this week...and "Christmas" down 445 places to number 537 for some reason! I wonder what could explain that.
I summarise around four hundred blogs through their RSS feeds. Thanks in particular to the Palgrave Econolog who have an excellent database of economics blogs; I have also added a number of blogs that are not on their list. Contact me if you'd like to make sure yours is included too.
I use Wordle to generate the image, the ROME RSS reader to download the RSS feeds, and Java software from Inon to process the data.
You can also see the Java version in the Wordle gallery.
If anyone would like a copy of the underlying data used to genera…

New year: good news

Given the low political chances of any effective climate change reform coming out of Congress in the next few years, I was pleased (and surprised) to see this projection from the US Department of Energy:
...the level of carbon dioxide emissions in the United States will remain below the rate of 2005 for the next 15 years even if no new restrictions are imposed.That's stunning. And gives us hope that ordinary supply and demand might do at least part of what politicians can't seem to: reducing demand by increasing the price of carbon.