The False Economist

Wednesday, March 23, 2011

Top 20 Articles in the American Economic Review

To celebrate the 100th anniversary of its first publication, The American Economic Review has released its "Top 20" articles, as selected by a committee consisting of Kenneth Arrow, B. Douglas Bernheim, Martin Feldstein, Daniel McFadden, James Poterba and Robert M. Solow.

Background article by the Economist available here.

Document with links to the articles available here.

So get reading on some of these monumental economic texts and wow your friends in the pub with your knowledge of  the Kuznets Curve and the Cobb-Douglas theory of production.

Tuesday, March 15, 2011

Irish Times: The Psychology of Selling

The brilliant Mr. Patrick Freyne (ex-TV reviewer for the Sunday Tribune) has an article in the Irish Times on behavioural economics and the logical fallacies we, as consumers, fall for again and again. Read it here.

Sunday, March 13, 2011

Daniel Gros: Flawed Economics of the Competitiveness Pact

The Director of the Centre for European Policy (CEPS), Daniel Gros, has written a short article examining the logic behind the so-called Competitiveness Pact, a joint proposal from France and Germany to improve the Euro Area's competitiveness. The Pact led to a number of alternative proposals being offered, most notably one by the Presidents of the Commission and European Council.

The Pact will be debated at the European Council held on  24-25 March and we can expect sparks to fly over contentious issues such as the harmonisation of corporate tax rates and the retirement age. There are also calls for Wage Indexation to be abolished  (this is where social welfare and other payments are calculated based on the average wage as opposed to inflation or price levels)

In his piece, Gros states that there are two underlying hypotheses which provide the basis for the Competitiveness Pact:

  1. If we fix (relative?) wages no external imbalances can arise since relative costs determine export performance.
  2. Higher productivity always means more ‘competitiveness’, and is thus always useful to reduce divergences.
These are not necessarily true, argues Gros and so the logic behind the Pact is flawed.

Read it at the Eurointelligence website here.
The Franco-German Competitiveness Pact is available here.
And some background on the issue is available on the Euractiv news website here.

Tuesday, March 1, 2011

Happy Maths Day!

Such a shame it only comes once a year....

Here's a video by Professor Mark Thomas of the University of Oregon, who very kindly put up all his excellent introductory econometrics lectures on Youtube. Like every other econometrics lecturer in the world he has his own take on notation but the lectures are quite accessible and a great first step in learning more about what economics is based on.

NB. Lecture starts at the 12 minute mark.