A response to Danyl on data and inequality

Over at Dim Post I see Danyl is discussing the latest (2014) Household Income Report and Piketty’s book Capital in the 21st Century.  Excellent – there are lots of important and interesting issues to discussing look at these sources.

However, in this instance the data he is using and his interpretation is sadly a bit off.  I thought I’d discuss why this is here. Read more

Potential output in monetary policy

When it comes to “potential output” there is often a view that the economies potential to produce is determined by the labour, land, and forms of capital that are available to create this output from – and this is right!  Furthermore, each of these factors tends to produce a diminishing amount of additional output as you use more of it.  Although the factors of production are often complementary this often implies a situation where – in the long-run – the potential for output (and growth in said output) in a nation is fundamentally about technological change and the quality of institutions.

However, in a recent speech by John McDermott of the RBNZ he points out that, when it come to considering monetary conditions, the type of “potential output” we are interested in is a bit different.

Read more

QOTD: Andrew Dickson and Bill Kaye-Blake

While the blog was out of action I noticed a lot of people linking the following article by Andrew Dickson and Bill Kaye-Blake (from Groping to Bethlehem).

All the links focused on how the article made the case for a tax on sugar.  That is fine and all, it was an externality case that we can discuss, appeal to evidence and value judgments on, and then decide whether we agree or not.  In fact, I get the impression that is the exact point that the authors are raising after setting up the pro-argument.

However, I didn’t get the impression that many people made it to the second half of the article (given the way it was used) – and the second half was absolutely glorious.

The second half starts with this: Read more

Sorry about the outage!!

Hi everyone.  I’m really sorry about the fact the site has been down over the past couple of weeks, we had issues with our old host disappearing!

NZAE 2014 is taking place at the moment, with the details here and the hashtag rolling here.  I suggest using the hashtag for everything remotely economics related for the next couple of days ;)

Next week we will be properly back in action.  If you have any suggestions about things that we haven’t covered, due to being unable to post and generally away, leave them in the comments.  I have a few ideas of my own, but always want more :)