Archive for November 2007
The Warehouse sale and Integrity
Posted by: Matt Nolan on: November 30, 2007
So we won’t know whether the Warehouse is going to be sold until the High Court releases the details surrounding its ruling and the Commerce Commission decides whether to appeal. Ultimately I hope the decision to allow a sale had something to do with the halo effect . Something that did catch my eye is [...]
Monetary policy statement preview – December 6 2007
Posted by: Matt Nolan on: November 29, 2007
The last 6 weeks have shown the New Zealand economy to be tight – but not to tight. Unemployment has fallen to a record low (3.5%), but at the same time the participation rate has fallen and employment growth has fallen to its lowest rate in a few years. Income growth was strong, but not [...]
Rule following and bus drivers
Posted by: Matt Nolan on: November 28, 2007
Today on the bus the bus driver stopped to tell school kids to stand up. This happens on occasion, and generally the adults on the bus act like they think it is a complete joke. You can here comments like ‘this is ridiculous’ and ‘the bus driver just wants to feel important’ from adults/civil servants [...]
Flexible working hours – Genius or madness
Posted by: Matt Nolan on: November 23, 2007
The flexible working hours bill aims to increase the degree of ‘flexibility‘ in the labour market for households with a child under the age of 5 or a disabled child under the age of 18. Now I’ve heard all sorts of complaints and complements about this bill, so I’ll try to talk about the way [...]
Higher interest rates – stronger currency?
Posted by: Matt Nolan on: November 22, 2007
In the comments Kimble had a great point “long term estimates of the level of the dollar can be heavily influenced by the current level”. Although this may seem like economists being myopic, it has more to do with our extremely limited understanding of how the exchange rate works.
Do US rates need to fall again?
Posted by: Matt Nolan on: November 21, 2007
What do we have here, the Fed has lowered growth and inflation forecasts, Freddie Mac (a US based mortgage finance company – think subprime mortgages) suffered record losses, Citibank and Bank of America struggle with credit concerns, and the MIT real estate center recorded a fall in commercial property prices (and the first fall in [...]
The Halo Effect: Round Two
Posted by: Matt Nolan on: November 21, 2007
In a previous post we discussed the Halo effect, and how the Warehouse was trying to claim it was their own idea. Since then, the Halo effect has taken on special importance as Woolworths Ltd (Aus) and Foodstuffs decided to appeal the Commerce Commission’s decision to refuse to let one of these firms buy the [...]
Corporations and welfare
Posted by: Matt Nolan on: November 20, 2007
This cartoon tells us a number of things about the situation. Firstly, for Walmart to put this mans firm out of business, Walmart must have been relatively more efficient (ie, its costs were either lower or the value they added to the product was greater). Secondly, it tells us that the person that used to [...]
Patents not so evil after all…
Posted by: rauparaha on: November 13, 2007
We’ve previously blogged about the potential for patent protections to restrict innovation when inventions are sequential. However, Sudipto Bhattacharya and Sergei Guriev suggest on VoxEU that the research we cited by Bessen and Maskin might be misleading. In particular they point out that there is a ‘third way’ that knowledge can be treated. Rather than [...]
In the long-run is happiness constant?
Posted by: Matt Nolan on: November 9, 2007
I was just reading the dirty old (note dirty old is a complement from me) Dilbert blog, when I happened upon a post he called Happiness smoothing. Now in this blog post he discusses how individuals choose to interact with people in a way that is inversely related to the persons current success. So if [...]
RBA lifts rates to 6.75%
Posted by: Matt Nolan on: November 7, 2007
It will come as no surprise to anyone that the RBA lifted its cash rate to 6.75%. Glen Stevens statement was relatively hawkish, noting that underlying inflation would likely leave the target band and stating the growth would need to moderate before inflationary pressures would ease.
Supply siders on climate change
Posted by: rauparaha on: November 6, 2007
Most debate surrounding climate change focuses on the best method of suppressing demand for carbon intensive technologies. However, as Hans-Werner Sinn points out at VoxEU, reductions in demand for carbon could result in perverse incentives on the supply side. In particular, the suppliers of oil, coal and other non-renewable, carbon rich resources could face an [...]
Jocks don’t trust geeks?!
Posted by: rauparaha on: November 6, 2007
This is why I don’t believe people who claim that overcoming one’s biases isn’t important. David Romer gives a football coach solid evidence that he could win more games by running or passing on fourth down and what happens? “It used to be that going for it on fourth down was the macho thing to [...]
Caps, taxes and The Man
Posted by: rauparaha on: November 6, 2007
Cato’s Regulation magazine has a fairly detailed comparison of cap-and-trade and carbon tax systems in their latest issue. A couple of commentators have interpreted the article as supporting their preference for a cap-and-trade system. They say that the two greatest benefits of taxes are revenue recycling and price stability but claim that the money could [...]
Helping me to help me
Posted by: rauparaha on: November 5, 2007
Matt and I recently discussed whether we thought the government should intervene to correct intra-personal externalities that arise from time inconsistency in peoples’ behaviour. We particularly talked about smoking: models of smoking which incorporate hyperbolic discounting predict that people will want to quit in the future but will never be able to quit when the [...]
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