The visible hand in economics

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Dear avid TVHE readers,

We’ve finally set up our own hosting and have a new site  at www.tvhe.co.nz, if you could be so kind as to set your links/bookmarks/feeds to the new web address it would be much appreciated!

We have lots of exciting things planned for the blog in the future (including some new commentators and some tax calculators for you to play with!), we look forward to seeing you there:)

Cheers,

The TVHE team

Update: Thanks to the journalistic skills of Kimble and StephenR we know this chart is a hoax, it has however sparked some amusing comments on the IQ/party matches for NZ:)

While procrastinating doing work on the weekend I found this little stunner

Would be interesting to see a similar exercise for the 08 election

Agnitio

A few weeks ago a fellow named Jeffrey Doyle posted a “history of economic thought” type comment/post on the blog, which can be found here.

Beyond this he also added one additional criticism of “neo-classical economics” – the focus on “monetary flows” instead of energy.  Of course, as a criticism of economic science this is a misnomer – economic science is the study of scarcity, and “monetary flows” are merely a convientent way of representing this scarcity.  Using energy as a representation should – if the models are sufficiently specified – provide the same results.  Now, in when applying models there may be substantial differences, given what is implicitly assumed to be useful or not in different models – while this argument is important for application it is not something I can argue about, as I do not have the scarce intellectual talent to go around and apply a new set of assumptions to an underlying framework of scarcity.

However, my impression is that Dr Doyle is not criticising the individualistic methodological process in economics – he is attacking the “economic unit” used when we study scarcity, something that is constantly occurring and is a healthy part of any discipline.

However much I was looking forward to launching my own incredibly risky finance company, I’m glad that the RBNZ and Treasury have tidied up what was a terrible decision by the government to extend deposit protection to finance companies at no charge.

Details here (ht: Migeul Sanchez). News coverage here

I particularly like the quote in the stuff article from an anonymous commentator

“The two-year deposit guarantee announced by the Government on Sunday was a “free lunch for [finance company] gluttons”

While I prefer the term economic opportunist to glutton:) I thin it sums up the situation before the rule change quite nicely.

Now that I think about it, 3% off the 30% return I’m promising may not actually be that bad given how risky our investments will be, we just need to work out how to get a BBB- credit rating….

Agnitio

This video was doing the rounds amongst the investment bankers/consultants a  while a go. I must say it’s hilarious. However I’m sure the management consultants that this video mocks are feeling slightly more secure about their jobs at the moment.

note: Youtube is blocked at work so I have no idea if my first attempt at posting a video has been successful:)

I wouldn’t go as far as saying being an economist is a recession proof career. But at the moment I would say “damn it feels good to be an economist” relative to being an investment banker. If I had any rapping/video editing skills I might try and make a reply video. It would definitely have Matt Nolan as the front man, given he is such a pimp:)

Agnitio

p.s. Obviously economists can’t be trusted with youtube at work. I think it’s fair enough, I definitely suffer form bounded will power:)

Brilliant video, I love that Alec Baldwin has reinvented himself as a comedian:)

http://www.nbc.com/Saturday_Night_Live/video/clips/reliable-investments/698621/

Agnitio

That is the topic of my Dom Post article this week.

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