jamesz

The America’s Cup is not about the money

/10 Comments/in , , /by

The America’s Cup, which fans can bet on by finding words like Coral Near Me, might be returning to NZ and local newspapers are already weighing in on what it means for the economy:

As Team New Zealand moves close to match point there is already speculation that the next cup series will bring over half a billion dollars in financial gain to the country.

Don’t believe it, says Shane Vuletich of Covec, specialist in economic evaluation of tourism and major events, who warns numbers already being used are far too large.

Vuletich and TVHE’s straight-talking Shamubeel Eaqub—”the economic benefits of a cup regatta in 2017 would be based on ‘over-hyped studies that are proven to be absolute b…….. after the fact.'”—are absolutely right: major events don’t tend to be good financial investments. What surprises me is that this is worth reporting. Read more

Matt Nolan

Five year anniversary of Lehman Brothers

/in /by

Sunday was the 5-year anniversary of the failure of Lehman Brothers – there was a live-streaming Twitter account, an good article by Liam Dann reminiscing, and a pointer to what he wrote about the crisis at the time.

Given how well his article held up, I was tempted to see what embarrassing things I said at the time – given that the magnitude of the deterioration was definitely worse than I could tell in real time.  Luckily, my posts are simply descriptive things pointing out some of the factors we need to keep an eye on (here on the day, here a few days later) – my view of the situation had shifted significantly since the failure of Bear Sterns in March (where I comment about moral hazard in comments).

Read more

jamesz

Copyright infringement laws are not working

/in /by

According to Rebecca Giblin of Monash University:

It has been more than three years since the first countries began implementing ‘graduated responses’, requiring ISPs to take a range of measures to police their users’ copyright infringements. Graduated responses now exist in a range of forms in seven jurisdictions. Right-holders describe them as ‘successful’ and ‘effective’ and are agitating for their further international roll-out. But what is the evidence in support of these claims?
…
[There] is little to no evidence that graduated responses are either ‘successful’ or ‘effective’. The analysis casts into doubt the case for their future international roll-out and suggests that existing schemes should be reconsidered.

Infometrics

Series on tax: Part 8, inflation and tax

/3 Comments/in , , , /by

Matt Nolan finished his series of posts on tax by discussing “inflation tax” on interest.co.nz (Infometrics version here).

The article covers a lot of ground, discussing monetary policy, “one-off” money financing, and seigniorage.  These areas are all related, but all involve special elements.

Read more

jamesz

Rule design in professional cycling

/3 Comments/in /by

Via Lars Christensen, here is a combination of my favourite things:

Sprint finishes in professional cycling are fast, furious, and dangerous. A “red flag rule” seeks to moderate the chaos of these finishes, but may induce moral hazard by removing the time penalty associated with crashing. To test for moral hazard, the authors use a 2005 rule change that moved the red flag from 1 km to 3 km from the finish. Data from Europe’s Grand Tours indicate that, after the rule change, both the incidence and the size of crashes nearly doubled in the 1–3 km from the finish zone. There was no such increase in crashing rates in the 3–5 km zone.

Warning: Sports nerdiness follows. Read more