I have no idea if this is original, but I was thinking about the Keynesian theory of investment while doing something else and it occurred to me that you can explain it in terms of pre-funding or post-funding. The Modern Monetary Theory people think this distinction, applied to banks, has really important consequences for monetary…Read More Pre-funding and post-funding investments
As a follow-up to this 8,000 pageview hellbeast, here’s an effort to dissect its central argument a bit more. I see maybe three points within it. First, there is an argument from transaction cost. This is simply that all those contracts need some lawyering. In itself this is probably the weakest of the three, and…Read More A bit more on Coasian hells
A quick thought after this twitter conversation: Important point: if your product is information, your productivity is definitionally proportional to demand https://t.co/oulNUf2oNS — Alex Harrowell (@yorksranter) October 15, 2017 There is quite a large set of firms for which productivity is fundamentally demand-driven. This is a distinct point from Verdoorn’s law, the argument that productivity…Read More Demand-determined productivity
It’s fairly well known that a lot of the productivity gap between the UK and other industrial countries is accounted for by a long tail of unusually unproductive small businesses (see ONS data here). This fascinating piece in the FT covers a project to do something about that by getting them management advice. An interesting…Read More Where do UK SMEs get technology advice?
I’ve been thinking a lot about scaling and the economics of the cloud recently after reading this. Specifically, this quote: The costs for most SaaS products tend to find economies of scale early. If you are just selling software, distribution is essentially free, and you can support millions of users after the initial development. But…Read More Scale and scalability
The world is in turmoil. Trump. Brexit. Marine Le Pen. And as very often when this is so, it’s in turmoil about macro-economic policy although this is often less obvious than you might think. MLP, for example, wants to recreate the franc, redenominate the French national debt, presumably devalue/inflate a great chunk of it away,…Read More An even simpler plan nobody wants
This economic paper is strange: Over the past thirty years, a great deal of business cycle research has been based on purely real models that abstract from the presence of nominal rigidities, and so (at least implicitly) assume that the Phillips curve is vertical. In this paper, I show that such models are fragile, in…Read More when the facts change…
So this chart happened. It looks like the Fistful of Euros model of the labour market has a serious problem, in that I can’t replicate JW Mason’s original results. The compositionally weighted ECI measure of earnings is more strongly correlated with the output gap, i.e. more cyclical, than the constant-weighted ECEC, at least for 2002-2014.…Read More Science, dammit.
Are still very much with us. Here’s a chart showing the average staff turnover in British call centres (from here). Turnover marches up in the boom, crashes in the recession, and you can even make out the doubledip. All clear so far?Read More The political aspects of full employment
I was saying that nobody seemed to bother to check the claim that defined-contribution pensions were cheaper. Nobody but weirdos like me ever suggested the following until now: Once you account for falling wages among young workers—if you must: “the Millennials”—many mysteries of the economic behavior of young people cease to be mysterious, such as…Read More They don’t have any money.