Knowing and Making

Despite Chris's warning , I went to Tim Worstall's book launch today. I even bought a copy which I will review on here when I have read it (on the bus tomorrow). But before that, I learned something nice from his answer to an audience question. Apparently, there's a clear relationship between GDP per head and population growth. We already know that people in poorer countries have more children, and the population of those countries grows faster. It seems that there's a measurable cut-off point: at $16,000 per head of GDP, fertility drops to around replacement rate (just over two children per mother) and the population stabilises. Which reminded me of another statistic I read recently: national happiness grows with GDP until a certain point, at which it levels off and people stop getting happier. That level? $17,000 per head *. Now perhaps there's something important in that $1,000 difference, but the two figures are within the margin of error for cross-coun...

The new EconDirectory.com rankings are out, and Knowing and Making has moved up to number 65 (based on visitors) and 68 (based on page views). In the UK, we are now the second most popular economics blog, behind Tim Worstall . The BBC and FT blogs do not publish their stats in this directory (Willem Buiter is on there but it's his pre-FT blog address), so it's likely that Stephanomics, Undercover Economist and Economist's Forum are ahead too - but we are definitely in the top ten. Thanks for all your visits over the last year, and if we can get ahead of Tim Worstall by the summer I'll buy you all a drink*. * Offer limited to those who turn up in the pub and collect it

From an unusual source (John Reid, chairman of Celtic Football Club - oh, and the UK's former Home Secretary) comes a proposal for international exchanges for interbank lending. Tim Worstall understandably dislikes the idea that the interest rate is the same regardless of who the borrower is. But that is partly addressed by the insurance premium that would be paid by all borrowers. My question is different: is interbank lending still the problem? I have the feeling that the interbank market no longer suffers from the problems it had last year - LIBOR/TED spreads are down and governments have effectively guaranteed the majority of interbank loans. Instead it seems that the problem in the financial economy is either demand for or supply of credit to the non-financial sector. This is resulting in a shrinkage of money in circulation and - since it's not compensated by an increased velocity of money - reduced prices or GDP. Still, it's not a ridiculous idea. Perhaps instead of...