Suggested afternoon read

Brad Delong on the upcoming translation of the Piketty book (and the recent presentations about it).  This is interesting stuff, and is very “economic historyesque” in its description.

I’d note that the general idea that we could have significant wealth accumulation leading to “impatient” groups being poorer in the long-run is accepted, and directly taught, in economics.  However, when it is down to a “preference for patience” the normative implications are not quite as clear.

Understanding these heterogeneous “preferences”, what they represent, and what they contribute within the data, is pretty exciting stuff!

Christmas cards from economists

Christmas is a time when economists are wheeled out to proclaim the benefits of giving cash. Of course, we’re not really that out of touch as a discipline and The Atlantic has sought to set the record straight. Drawing on the wealth of economists’ writing on gifts and relationships it has created some heart-warming cards that demonstrate our understanding. As it says,

In some cases, non-pecuniary values are important.

Merry Christmas!

H/T: agnitio

Productivity Commission on NZ vs Aussie productivity

Recently I’ve been talking a bundle about inequality in incomes, and fitting it within an idea of “equity”.  However, as we’ve chatted about, policy choices often involve conceptualising an equity vs efficiency trade-off.  A fundamental part of how we understand where we are in relation to this trade-off, especially with reference to “efficiency”, comes from thinking about productivity.

With this in mind, the Productivity Commission has been thinking about New Zealand’s productivity performance.  And given that along many characteristics New Zealand and Australia are similar they have decided that looking into the productivity gap between these countries helps us to understand this issue.  This led them to release a working paper titled “Investigating New Zealand-Australia productivity differences:  New comparisons at industry level” on their main site (links can be found here).

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National chooses “sexy” movie protectionism

Bah, I come back from a conference to this.  Film subsides/protectionism is back in vogue I see.  Not happy with just spending other people’s money to get to go to functions about the new Avatar movies, our politicians have decided to increase the amount of other people’s money they will give to all people who decide they feel like filming here.

From Dragoliz’s deviantart

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QOTD: Plato

Those who are too smart to engage in politics are punished by being governed by those who are dumber.

Economists like to think they’re above politics and deal only with positive questions. Is that really much of a boast?

On the comments of Pope Francis

I’ll admit a bias here – my middle name is Francis, so no doubt I am being overtly generous to his comments when I discussed them on Rates Blog last week ;) .  Or potentially I’m am being harsh, because I am particularly unhappy that I ended stuck with a middle name I didn’t particularly want.

All kidding aside, the way different economists reacted to the Pope’s comments was fascinating for me – and also helped to reinforce the idea that often when we discuss things as economists, it can be hard to hide our normative assumptions.  As I pointed out here, I was raised with a fairly significant Catholic upbringing – and in the context of what I remember being told about when I was young his comments were not terribly strong.  I felt he was making some statements that were factually wrong, but it was on the basis that those within the Church actually believe in a more equitable distribution of wealth (even if it is significantly less wealth).

These normative value judgments about the distribution of income run past economics – economics is a descriptive discipline that allows us to fairly represent the trade-offs, not to determine what trade-off is right.  However, as an individual I would also note that the normative value judgments of the Catholic Church are hardly going to be representative of society as a whole – as a result, we do not need to say that the Pope is wrong with what he is saying in order to disagree with him.

However, as the end of my Rates Blog piece does point out, factually his two main “testable changes in society” are completely false.  Make of that what you will.