Patently Obvious: The Knowledge Economy

Are you Irish ?

Yes ? Good for you.


Are you hedging all your bets on an Irish recovery coming from exporting pharmaceuticals to the sick, bald, and impotent of the world ?

Well then, you probably shouldn't click on this link.

Agh!

Ok, it's not that bad really. Exports are still breaking records, in a good way, and certain factors (as always) have to be taken into account. What the Citi graph does highlight however, is that Ireland's reliance on pharmaceutical exports must not discount the effect the "patent cliff" will have on the market for medicines and other pharmaceutical goods in the near future.



Also, happy Tuesday everyone:Why Not Start Your Weekend on Wednesday ?

Neanderthal-nomics

I could try and explain my absence but I don't want to and, lets face it, you don't want to hear it.

What you are interested in however is fantasizing about how you can become a regular John A. Rockefeller without putting in nearly as much effort as the great captain of industry.

Luckily for you back in 1966 Marshall Sahlins discovered a way to do this...  become a Cave Man.

All is revealed in this link giving background to Sahlins' presentation, with further reading available here.

What's the deal with Optimization Theory ?

Like most people, Professor Avinash Dixit, likes to watch Seinfeld. Unlike most people, the Princeton Professor of Economics has applied an episode to option value theory, specifically Elaine evaluating if her date is "spongeworthy".

Link here.

Cool.

This is taken from Economic Inquiry and you can see in the notes that a Ricardo Guzmán is credited for the "abstract suggestion".

Now I'm off to apply Neo-Walrasian General Equilibrium Theory to the Soup Nazi......

Who is Ben Bernanke's Bank Manager ?

Happy New Year !!!


I thought this piece by John Saft of Reuters was rather cool, particularly as it had me imagining the Chairman of the Fed walking in to his bank manager's office, all sweaty and nervous, looking for some sweet sweet remortgaging.

Mr. Saft does raise some pretty thought-provoking points in his article but I really don't know if it can be so closely evaluated with the policies Mr. Bernanke advocates, this is a personal matter after all. Maybe he just had to get a rockin' new powerboat in the January Sales and this was the quickest way to do it ? At least that's what I like to think....

Eurozone Leaders: get your frickin' act together

The normal response to the question "do Eurozone leaders finally get it?" is "of course not.. are you serious ? What the hell is wrong with you?!"

Luckily for us Professor Charles Wyplosz has a more eloquent and thought-out answer at the lovely www.voxeu.org website.Although the conclusion is in the main title: not yet.

Link available here.

Nobel Prize for Economics : Sargent and Sims

This is the real start of the awards season people with Thomas Sargent and Christopher Sims winning the prize this year.


The Marginal Revolution blog has a very easy to follow of explanation of what it is these chaps have done to win a prize that so pisses off physicists, chemists and other "real" scientists the world over. Check it out here.

And for all you "real" scientists out there, please enjoy Dilbert cartoon

Oh right, the blog...Sorry about that.

Having taken a career break from the blog (i.e. I got a career) I thought I would try and get things moving back here before you go off and hang out with those no-goodniks over at the Irish Economy blog.

So here are a few things I came across recently that may be of interest:

The first is taken from Paul Krugman's blog in which he cites a paper by Muller, Mendelsohn, and Nordhaus who use the example of air pollution* and how this side-effect of production affects society and how this does (or doesn't) impact on policy makers and potential contradictions in their ideology.

They find that in a purely monetary sense the cost to society is huge with a number of industries inflicting more damage in the form of air pollution than the value-added by these industries at market prices. The argument, Krugman explains, is as follows "consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation. If consumers did have to pay the full cost, they would use much less electricity from coal — maybe none, but that would depend on the alternatives."

Ah. So we tax them then to make up for this disparity and offset the detrimental impact of air pollution. A response to such a market failure is required but this will be shot down by those who think Adam Smith was a leftie-pinko interventionist. 

An interesting examination of how one's ideology and need to be right can hinder them from doing what is most efficient. Not necessarily a trait only found in conservatives though...

Secondly Yoram Bauman, PhD., is the (sigh) Stand Up Economist. Moreover, he is not dreadful, in fact he's actually pretty good. Unlike that bloke at Guy's Econometrics blog who changes the lyrics of popular songs to econometrics terms...Bleugh.

Check out the Bauman's explanation of the Greg Mankiw's 10 Principles of Economics here. I especially like his footnote joke. I mean, seriously some of the footnotes in my old macro book were straight out of the Third Policeman.


* = always the staple for discussing external costs to society, just like cakes are always the example used when discussing diminishing marginal utility.