Thursday, December 23, 2010
Monday, November 22, 2010
The summary (in USD):
- Total wealth: 195 trillion
- 195 trillion = financial asset (117 trillion) + non-financial asset, mainly real estate (115 trillion) - household debt (37 trillion)
- Top three wealth coutries: US (54.6 trillion), Japan (21 trillion), and China (16.5 trillion)
- Top three household debt: US (13.9 trillion), Japan (4.3 trillion), and Germany (2 trillion)
- Top three average wealth per adult: Switzerland (373K), Norway (327K), Austrilia (321K)... US (236K)
Saturday, November 20, 2010
IT is a slow day in a dusty little Irish town. The rain is beating down and the streets are deserted.
Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the pub.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town.
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.
And that, ladies and gentlemen, is how the stimulus package works.
Thursday, November 18, 2010
Wednesday, November 17, 2010
Tuesday, November 16, 2010
Sunday, October 31, 2010
On Friday, my colleague, my students, and I attended the Minnesota Economic Association Annual Conference at St. Paul. One speaker, Art Rolnick, who is the co-director of the Human Capital Research Collaborative at University of Minnesota, made an excellent speech on economics of early childhood education. Here I found two related works by Art:
Early Childhood Development: Economic Development with a High Public Return
Early Childhood Development on a Large Scale
Remind me of this beautiful song: The greatest love of all by Whitney Houston.
Sunday, October 24, 2010
Friday, October 15, 2010
Monday, October 11, 2010
Wednesday, September 29, 2010
Sunday, September 26, 2010
Thursday, September 9, 2010
Wednesday, September 8, 2010
Saturday, September 4, 2010
Thursday, September 2, 2010
Tuesday, August 31, 2010
Monday, August 30, 2010
Monday, August 23, 2010
Wednesday, August 18, 2010
Wednesday, July 28, 2010
Tuesday, July 27, 2010
In summary: Democracy has a positive and significant impact on the adoption of economic reforms but there is no evidence that economic reforms foster democracy.
Tuesday, July 6, 2010
Thursday, June 24, 2010
Wednesday, June 16, 2010
Wednesday, June 9, 2010
Tuesday, June 8, 2010
I think that Mankiw is very wrong on this issue. He said the following as an undesirable path after imposing soda tax: "... Taxing soda may encourage better nutrition and benefit our future selves. But so could taxing candy, ice cream and fried foods. Subsidizing broccoli, gym memberships and dental floss comes next. Taxing mindless television shows and subsidizing serious literature cannot be far behind..." These are exactly the policies I think we should do.
Thursday, June 3, 2010
Wednesday, June 2, 2010
Sunday, May 16, 2010
Sunday, May 9, 2010
Thursday, April 29, 2010
Wednesday, April 28, 2010
Friday, April 16, 2010
Monday, April 5, 2010
Thursday, March 25, 2010
Google stands up.
Google's decision to stop censoring searches on its China-based servers, rerouting search requests instead to its uncensored Hong Kong facilities, is historic. Google has shown itself unwilling simply to be on the receiving end of whatever Beijing dishes out—and highlighted the growing importance of Hong Kong and Taiwan in shaping the decisions that foreign businesses in China must make.
When an enterprise of Google's global dimensions and visibility reverses course in China and is no longer a passive, compliant subject of government diktats, it sends a message to enterprises world-wide: You can do the same. Submissive participation in the mainland Chinese market is neither inevitable nor unavoidable. Do not fear to assert your interests, and those of your present and potential Chinese customers.
For the most part, foreign companies doing business in mainland China previously assumed that their risks lay on the side of not complying with Beijing's orders, however burdensome or threatening to profits or property interests, physical or intellectual. Leaving the Chinese market was unthinkable, and defying or contesting Beijing's directions just as unthinkable.
Of course, as Google could envision, bucking this conventional wisdom is hardly risk free. Google may be mistaken about its own commercial interests and have to climb down in the near future—Chinese authorities are already filtering results from Google's Hong Kong search engine for mainland users. Beijing's rapid and angry response shows it fully understands the dimensions of this clash, and it may yet win, forcing Google back into censoring searches, or pushing it entirely from the mainland for being uppity.
The company announced starkly that "the Chinese government has been crystal clear throughout our discussions that self-censorship is a non-negotiable legal requirement." That position shows how aggressively Beijing's current leadership will act to control domestic information flows, and foreign businesses generally.
But the mere fact that the Google nail remains upright, despite Beijing's omnipresent hammer, is telling. And if Google succeeds, we cannot even begin to imagine the commercial implications for foreign trade and investment with China. A Google victory is also a victory for China's citizens, a surrogate win for those who value individual liberty and free markets in goods and ideas.
Google's response spotlights the distinctive role that mainland China's more free cousins, Hong Kong and Taiwan, may play in shaping business in China in the future. Because Hong Kong still retains a strong attachment to a consistent, fairly applied rule of law, in an economy many now consider freer than that of the United States, Google correctly saw it as a refuge to which it could repair.
Hong Kong's physical reality, its legal protections and lack of corruption, and its potential to be a truly open society are powerful advantages for foreign businesses. Similarly, Taiwan's appeal as a base cannot be dismissed either, especially as economic relations across the Taiwan Strait grow. More closely integrating the two cross-Strait economies will only increase Taiwan's attractiveness to foreign investors and traders.
Google's decision should also tell the U.S. government something about how to advocate its interests with China. The Google controversy coincided with cyber attacks against over 200 American companies, believed by U.S. authorities to have been launched by the People's Liberation Army. China's unchallenged behavior shows why we should not be optimistic that romancing Beijing will produce "crippling" sanctions against Iran's nuclear weapons program any time soon. Instead, the Obama administration should emulate Google's approach in official dealings, and support U.S. businesses in situations similar to Google so they do not have to act alone.
Thursday, March 4, 2010
Friday, February 26, 2010
Interpretation: China is running an overheating economy.
Friday, February 12, 2010
Friday, February 5, 2010
Wednesday, February 3, 2010
.... Mr Summers was careful to say that the US remains committed to open trade and can gain from globalisation. But he also pointed out that Paul Samuelson, a famous economist (and uncle of Mr Summers), had argued that the case for free trade might not apply when countries were trading with nations that were pursuing mercantilist policies. The reference to China did not need to be spelled out.....
Also, Paul Krugman's Analysis of China Currency Policy.
.....With the Americans and the Europeans experiencing a crisis of confidence, Davos man was keen to learn from China this year. American businessmen could be heard ruefully contrasting their own "dysfunctional" political system and flaky politicians with China's decisive and meritocratic leadership. China was also widely held up as an example of the virtues of "state capitalism" - in which government plays a bigger role in guiding the economy than has been fashionable in recent years. Given that China's economic take-off started when the state allowed a greater role for private enterprise, it seems odd to attribute the country's success to "state capitalism". But there is little doubt that bigger government was one of the big ideas at this year's World Economic Forum.....
Monday, February 1, 2010
In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the economic crisis. Before the conference begins, and at the insistence of Lord Keynes, they go out for a night on the town and sing about why there's a "boom and bust" cycle in modern economies and good reason to fear it.
China often views the ideas of foreigners, from missionaries in the 17th century to 21st-century Internet entrepreneurs, as subversive imports. The tumultuous history behind the clash with Google.
All Chinese schoolchildren are indoctrinated with the idea that China was humiliated for centuries by foreign powers, and that support of the Communist state is the only way for China to regain its greatness and never be humiliated again.
A very similar debate is going on today between those who believe that applying Western notions of human rights and democracy to China is counterproductive. Many a politician, businessman or media tycoon has argued that adapting to special Chinese conditions is surely more effective if one wishes to have any influence in China. The fact that this argument is usually self-serving does not make it necessarily wrong, but so far it has certainly not been proven right.
Chinese human rights have not been noticeably advanced because of foreign
compromises with Chinese illiberalism.
Saturday, January 30, 2010
Tuesday, January 26, 2010
Monday, January 18, 2010
Saturday, January 16, 2010
....Do the bankers really not understand what happened, or are they just talking
their self-interest? No matter. As I said, the important thing looking forward is to stop listening to financiers about financial reform.
Wall Street executives will tell you that the financial-reform bill the House passed last month would cripple the economy with overregulation (it’s actually quite mild).
They’ll insist that the tax on bank debt just proposed by the Obama administration is a crude concession to foolish populism. They’ll warn that action to tax or otherwise rein in financial-industry compensation is destructive and unjustified.
But what do they know? The answer, as far as I can tell, is: not much.