Not Really Made in China

From WSJ.

Visualizing Economics

A cool website.

Global Wealth Factbook

The 2010 global wealth factbook from Credit Suisse.

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)

Stimulus and Debt Reduction

My colleage sent me this amusing story explaining how the stimulus work for relieving debt:

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.

China's Catch-Up on High-Speed Rail Technology

An interesting and detailed article about how China learned the technology of high-speed rail from developed countries.

Daily Price Index from online Retailers

The daily price indices covers various countires in the world from online retailers.

Quantitative Easing Explained

A very funny video about the Fed and Quantitative Easing II.

Hamilton provides more accurate and serious answers to those bunnies' questions.

Is Obama A Keynesian?

A very funny video.

Rogoff on Global Economy

Beware of Wounded Lions.

Google Uses Transfer Pricing

Google 2.4% Tax Rate Shows How $60 Billion Lost to Tax Loopholes.

The Economics of Early Childhood Education

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.

The History of Chinese Stock Market

Here.

Clarida on Monetary Policy

What Has – and Has Not - Been Learned about Monetary Policy in a Low Inflation Environment? A Review of the 2000s by Richard Clarida.

Interview with Mundell on Currency Choas

Currency Chaos: Where Do We Go From Here?

Romer on Deficit

Now Isn’t the Time to Cut the Deficit by Christina Romer.

Fed Chief Gets Set to Apply Lessons of Japan's History

Here.

Who Caused the Currency Wars?

By Simon Joghson.

Mankiw on Tax

I Can Afford Higher Taxes. But They’ll Make Me Work Less.

Two Cheers for the New Bank Capital Standards

From Alan Blinder.

Becker on China

China's Next Leap Forward.

The Most Profitable Bank: Fed

here.

Implications of the Financial Crisis for Economics

Ben Bernake had a pretty good summary and reflection.

The U.S.-China Exchange Rate Squeeze

Here.

U.S. Adopts Tougher Stance on China

Here.

Steelworkers Accuse China of Violating Trade Rules

China’s Subsidies for Clean Energy Are Illegal from NYT.
You cannot find a better example than this for teaching international economics.

Divergence of Dow Jones 30 Companies

Divided by a Two-Track Economy from WSJ.

Mankiw's Advise to Students

Here.

Reich on Labor Day

The real lesson of labor day from Robert Reich.

Currency Trading Soars

From WSJ.

Christina Romer's Farewell Speech

Not My Father’s Recession: The Extraordinary Challenges and Policy Responses of the First Twenty Months of the Obama Administration By Christina Romer, CEA Chairman.

Rogoff on American Ecomomy After the Financial Crisis

Why America Isn’t Working?

Joint Venture and Intellectual Property

In China, Western Firms Keep Secrets Close from WSJ.

Robert vs Robert

Robert Barro vs Robert Reich on unemployment.

Where Do State and Local Governments Get Their Tax Revenue?

Where Do State and Local Governments Get Their Tax Revenue?

Glass City

In Toledo, the 'Glass City,' New Label: Made in China from WSJ.

Gross National Happiness Growth

An interesting example from Bhutan.

Double Dipping

An interesting song from the Songs of Merle Hazard.

The Case Against Corporate Social Responsibility

I think the case the auhtor made is very wrong.

Prepare to Be Surprised in China

From WSJ.

Southeast Asia Tries to Link Up to Compete

Here from WSJ.

Disagreement on Housing Bubble

Reasonable People Did Disagree: Optimism and Pessimism About the U.S. Housing Market Before the Crash.

Deje Vu on Banks

In China, it happends again.

Deje Vu on the Housong Market

Hamilton on China's housing market based on this research.

Economic Reform Doesn’t Produce Democracy

Note to China: Economic Reform Doesn’t Produce Democracy from IMF working paper.
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.

Change in the US Employment Dynamics

The article provides one explanantion of US jobless recovery from Econbrowser.

Inside the iPhone

An insightful analysis of supply chain of iPhone.

The Arrogance of Chinese Power

Here.

Sustainable Capitalism

Toward Sustainable Capitalism by Al Gore and David Blood at WSJ.

What is q?

q and FAQs from Smithers & Co.
US CAPE and q chart.

Blinder on Economic Rescue

Government to the Economic Rescue, a good article by Alan Blinder from WSJ.

What Do China’s Workers Want?

From NYT.

Chinese Workers Win Wave of Raises

This is a good result for Chinese workers.

Mankiw Does Not Like a Soda Tax

Can a Soda Tax Save Us From Ourselves by Greg Mankiw from NYT.

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.

Homeownership is Overrated

This is a very interesting point of view by Richard Florida from WSJ.

Risk vs Uncertainty

• About Knightian uncertainty.
• Rogoff on uncertainty and regulation from the lesson of BP oil's spill.

Fair's Model on Yuan

The Yin and Yang of Yuan appreication by Ray Fair from WSJ.
Hmm, I disagree with Prof. Fair. I think there is something wrong with his model.

Hon Hai

Suicides spark inquiries from WSJ.

Chinese Economy Treads Risky Path (Ask Japan)

Here from NYT.

Kocherlakota on Modern Macro Models

Modern Macroeconomic Models as Tools for Economic Policy

The Economics of Happiness

Fed Chairman Ben Bernanke talks about the economics of happiness, which I think is an excellent speech.

China Slaps Tariffs

In April 2010, China slaps import tariffs on steel, chemical product, and chicken.

US Exports

Obama trade goals face doubts from WSJ.

A True Hero

A true hero from a village in Taiwan named one of the heroes in 2010 by the Times.

Do Our Financial Models Still Work?

Panel includes Myron Scholes talk about models in Milken Institute Conference.

Where do Our Tax Money Go?

Source: here and here.

A Book on US-China Currency Dispute

The US-Sino Currency Dispute: New Insights from Economics, Politics and Law edited by Simon Evenett.

Funds Should Do More to Police Corporate Pay

Yes, this is what mutual funds should do.

Bank of Mom and Dad

Life is tough. Bank of Mom and Dad Shuts Amid White-Collar Struggle from WSJ.

Google Stands Up!!

Google made a brave and right decision finally.

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.

...

Charlie Rose Interview with Joe Stiglitz

An interesting discussion.

Stocks Market

In my class, I have been talking about drawbacks of short-term stocks investment and indiviual stocks investment. This morning one student of mine emailed me this Chinese words, saying the similar thing:

股市原意，乃讓集資搜資有其地，社會向榮，人皆有賺，
惜人性貪婪，耗盡心思，巧取豪奪，樂土成煉獄，血雨腥風，殺戳不息，
無數人蕩產傾家輸性命，勝者則喪良知人格，
余於股壇數十載，未嘗見一真正鸁者，
智者應知此乃一處永無贏家之戰場，
取勝唯一法……「及早離去」四字而矣！

Mankiw on Income Equality

Spreading the Wealth Around: Reflections Inspired by Joe the Plumber by Greg Mankiw.

China's Economy Update

China, Defying Global Slump, Faces a Labor Shortage from NYT.
Interpretation: China is running an overheating economy.

The $555,000 Student-Loan

An astounding story for student debt.

Economic Report of the President for 2010

See CEA chair's explanantion.

China Bubble

Bubble surges, bubble poked, and then bubble busts.

Man-cession

Better education shields women from worst of job cuts from WSJ.

Stand-up Economists Play Off Finances for Laughs

From PBS.

Crisis Renews Concerns on Euro

From WSJ.

Salt Passage Research

Very funny article about social science research.

2010 World Economic Forum and China

A good article by Gideon Rachman.

.... 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.....

.....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.....

Also, Paul Krugman's Analysis of China Currency Policy.

Hayek vs Keynes

A funny video.

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 Battles the Information Barbarians

Read this good article from WSJ.

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.

A College Degree Will Help Your Marriage

Read this report.

Shiller on Rationality

Robert Shiller says those problems in the hearts and minds of workers and investors will hinder US economy recovery.

References in the article:
Machiavelli's Mistake (PDF) (PP) by Samuel Bowles
Economics and Identity by G. Akerlof and R. Kranton

Krugman on Bernake

Bernake Conundrum.

Miserables Behind China's Economic Boom

Tragedies from New York Times.

Again, mark my word. China's real estate bubble is about to bust big.

China vs Google

Free markets require free minds eventually.
Update: Short the Chinese Communist Party.

Financial Crisis Responsibility Fee

Obama proposed this tax on big banks. I think it is necessary and crucial in the whole financial reform. It is not easy to see that Makiw agrees with Obama on one thing. Of course Krugman thinks this is no brainer.

....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.

Contrarian Investor Sees Economic Crash in China

I totally agree with James Chanos on China.

Blogometrics

A ranking of economics blogs and its Source.