Mankiw’s Principles & Yoram’s Translations

Mankiw’s Principles
1. People face tradeoffs.
2. The cost of something is what you give up to get it.
3. Rational people think at the margin.
4. People respond to incentives.
5. Trade can make everyone better off.
6. Markets are usually a good way to organize economic activity.
7. Governments can sometimes improve market outcomes.
8. A country’s standard of living depends on its ability to produce goods and services.
9. Prices rise when the government prints too much money.
10. Society faces a short-run tradeoff between inflation and unemployment.

Yoram’s Translations

1. Choices are bad.
2. Choices are really bad.
3. People are stupid.
4. People aren’t that stupid.
5. Trade can make everyone worse off.
6. Governments are stupid.
7. Governments aren’t that stupid.
8. Blah blah blah.
9. Blah blah blah.
10. Blah blah blah.

Annals of Improbable Research

What you need to know about the H1N1 vaccine

Espero que nosotros estemos preparados para poder enfrentar un brote de influenza estacional y H1N1.



An H1N1 vaccine premier

When will I be able to get the 2009 H1N1 flu vaccines?

Are the 2009 H1N1 vaccines safe?

Why won't the seasonal-flu vaccine protect me against 2009 H1N1?

How many H1N1 flu shots will I need?

There are two types of the H1N1 and seasonal vaccines. Can I mix and match?

Where can I get the 2009 H1N1 vaccine?

Source: TIME.com

Is Stimulus Still Necessary?

"A boom not a slump is the right time for austerity at the Treasury" said Keynes

"Have stimulus packages brought the world’s traumatized economies back to life? Or have they set the scene for inflation and big future debt burdens? The answer is that they may have done both. The key question now concerns the order in which these outcomes occur."

"The theory behind the massive economic stimulus efforts that many governments have undertaken rests on the notion of the output gap' This is the difference between an economy’s actual output and its potential output. If actual output is below potential output, this means that total spending is insufficient to buy what the economy can produce."

"A stimulus is a government-engineered boost to total spending. Government can either spend more money itself, or try to stimulate private spending by cutting taxes or lowering interest rates. This will raise actual output to the level of potential output, thereby closing the output gap. "

Project-Syndicate, Skidelsky

Hombre Promedio

José Luis Cuevas,
Hombre Promedio

Home Prices Increase

"U.S. home prices rose in July from a month earlier, according to the S&P Case-Shiller home-price indexes, with just two of the metropolitan areas showing declines. Meanwhile, the rate of annual declines continues to accelerate"

WSJ.com

The full S&P / Case-Schiller report

One Economics, Many Recipes

Bajo el marco del 35 aniversario del CIDE en el foro "Desafíos de la Competitividad" me encontré con la grata sorpresa de un obsequio "One Economics, Many Recipes" de Dani Rodrik.

In One Economics, Many Recipes, leading economist Dani Rodrik argues that neither globalizers nor antiglobalizers have got it right. While economic globalization can be a boon for countries that are trying to dig out of poverty, success usually requires following policies that are tailored to local economic and political realities rather than obeying the dictates of the international globalization establishment. A definitive statement of Rodrik's original and influential perspective on economic growth and globalization, One Economics, Many Recipes shows how successful countries craft their own unique strategies--and what other countries can learn from them.

Hasta el momento voy en la primera parte.

Sustainable Development

The key to climate change control lies in improved technology. We need to find new ways to produce and use energy, meet our food needs, transport ourselves, and heat and cool our homes that will allow us to cut back on oil, gas, coal, nitrogen-based fertilizer, and other sources of the climate-changing greenhouse gases.

Project Syndicate, Sachs

Emerging Markets and Global Financial Reform

The home country must put a cap on leverage, limit acceptable liquidity and funding practices, and have a resolution regime for winding up complex financial institutions. Otherwise, emerging markets should be able to say that banks from that country will not be allowed to enter.

[E]merging markets need to redouble their efforts to build bond markets, but on a local basis. Countries with more developed bond markets experienced less negative fallout from the crisis, since their large firms retained access to non-bank sources of finance.

Encouraging participation by foreign investors is a quick way to jump-start local bond market activity. But recent experience suggests that quickest is not best. Regulations limiting foreign participation to prudent levels should be part of the new international regime.

Project Syndicate, Eichengreen

Las dos historias patrias

"[L]as historias patrias de todos los países están conformadas por gestas patrióticas, héroes y mitos, y principalmente por fechas destacadas ya que son base sustancial de los ritos cívicos estatales. Apelan a la emoción, a veces buscan identificar un a enemigo, pero siempre buscan ubicar a los amigos y decantar los elementos simbólicos que puedan dar cohesión social y política a la comunidad. Los héroes funcionan como paradigmas modélicos para que el futuro ciudadano conforme sus actos y pensamientos a supuestas conductas excelsas y desinteresadas cuando de la vida pública se trata (a veces también de la privada)."

"En la educación primaria de los países con pedagogía avanzada se evita enseñar el conflicto porque se supone que el incipiente grado de desarrollo cerebral del niño no le permite procesarlo; pero en la educación secundaria es posible la enseñanza de la historia conflictiva (generalmente maniquea) que identifica claramente a los enemigos. Las nociones que a esas edades se reciben duran para siempre, salvo que uno se convierta en científico político, filósofo moral o historiador. O en un ciudadano muy maduro y muy leído. Estos personajes tienen la manía de modificar las actitudes básicas aprendidas en la educación básica. Pero no abundan entre la clase política; en ella son legión los que quieren dirigir los destinos nacionales con nociones inconmovibles provenientes de su más tierna infancia, sin conciencia del valor instrumental de la Historia Patria."

"[...] Me interesa destacar algo que me parece muy importante: una eélite formada en una Historia Patria conservadora dirige a un país formado en una Historia Patria liberal y revolucionaria. ¿No estará aquí el origen de muchos de los desencuentros que nos agobian?"

NEXOS, Luis Medina

Los Desafíos de la Competitividad

Inauguración: Dr. Cabrero, Sen. Navarrete, Mtro. Romero Hicks, Dr. Rodrick (El Futuro del Capitalismo, A partir del minuto 33), Dr. Esquivel

2009 NOBEL PRIZE PREDICTIONS

2009 NOBEL PRIZE PREDICTIONS

What accounts for the predictive power of citations? It is not really that mysterious. Citations in the literature represent repayments of intellectual debts that one researcher pays to another. The social norms and formal publication procedures in science demand that relevant work is acknowledged — and it is considered misconduct not to recognize previous work which a researcher has used in his or her own work. Moreover, these citation links represent a coherent pattern of intellectual connections. In other words, there is much meaning in all those millions of footnotes appended to research reports. The counting of citations, over specific periods and in different fields, can reveal the most highly cited people and papers, and these ranked lists have been shown to contain a large number of scientists who have already won the Nobel Prize (and other prestigious awards) and the names of those who later go on to receive the Nobel Prize.

THE POWER OF CITATIONS

Reinventing Economics

As George Akerlof and I argue in our recent book Animal Spirits , the current financial crisis was driven by speculative bubbles in the housing market, the stock market, and energy and other commodities markets. Bubbles are caused by feedback loops: rising speculative prices encourage optimism, which encourages more buying, and hence further speculative price increases – until the crash comes.

[…] Yet events like the Great Depression, as well as the recent crisis, will never be fully understood without understanding bubbles. The fact that monetary-policy mistakes were an important cause of the Great Depression does not mean that we completely understand that crisis, or that other crises (including the current one) fit that mold.

Robert Schiller

Finding the Policy Exit

The problem is that most economies are now barely bottoming out, so reversing the fiscal and monetary stimulus too soon – before private demand has recovered more robustly – could tip these economies back into deflation and recession. Japan made that mistake in 1998-2000, just as the US did in 1937-1939.

But, if governments maintain large budget deficits and continue to monetize them as they have been doing, at some point – after the current deflationary forces become more subdued – bond markets will revolt. When that happens, inflationary expectations will mount, long-term government bond yields will rise, mortgage rates and private market rates will increase, and one would end up with stagflation (inflation and recession).

Nouiel Roubini

"Macroeconomists, Economist and the Crisis"

"The current global financial crisis and recession, whose depth is unprecedented in recent decades, has cast doubts about the work of macroeconomists, the usefulness of their theories, and their capacity to anticipate and deal with crises. These are the issues I will discuss today."

José De Gregorio

"Schumpeter’s Time"

"One of Schumpeter’s most important contributions was the emphasis he placed on the tremendous power of innovation and entrepreneurial initiative to drive growth through a process he famously characterized as "creative destruction." His work captured not only an economic truth, but also the particular source of America’s strength and dynamism."
Lawrence Summers
Director of the National Economic Council

“Ogro Filantrópico”

“Quizás lo odien y quizás lo amen, pero muchos mexicanos no quieren vivir sin su apoyo. El Estado patrimonialista y a la vez protector. El Estado rapaz y también dadivoso. El Estado que construye el capitalismo mexicano y asimismo crea sus enormes ineficiencias. El "ogro filantrópico"[…]”

Denise Dresser

“Iniciativas contra la impunidad”

“La población moderna se reproduce poco demográficamente, pero se ha multiplicado culturalmente porque la libertad es contagiosa. Además, los viajes ilustran, tanto a los que viajan para conocer como a los que emigran por necesidad. Hace un siglo, había miles de mexicanos con exigencias cívicas. Hoy son millones, y eso inspira confianza en los años que vienen.”

Gabriel Zaid

“México frente a la Crisis: Hacia un Nuevo Curso de Desarrollo”

“Como se desprende de su título, el documento México frente a la crisis… quiere hacerse cargo de la crítica situación en que se encuentra la economía mexicana, al tiempo que presenta un conjunto de propuestas no sólo para reaccionar a la emergencia sino para redefinir el curso de la estrategia económica en pos de un desarrollo digno de tal nombre.”

Ciro Murayama
Para un mayor detalle

One Year Ago

Cochrane & Zingales

The Financial Instability Hypothesis

“Thus, in a capitalist economy the past, the present, and the future are linked not only by capital assets and labor force characteristics but also by financial relations. The key financial relationships link the creation and the ownership of capital assets to the structure of financial relations and changes in this structure. Institutional complexity may result in several layers of intermediation between the ultimate owners of the communities' wealth and the units that control and operate the communities' wealth.”
Hyman P. Minsky

Let's have math in economics - but as our servant, not our master

"What I [Krugman] objected to in the mag article was the tendency to identify good math with good work. CAPM is a beautiful model; that doesn’t mean it’s right. The math of real business cycle models is much more elegant than that of New Keynesian models, let alone the kind of models that make room for crises like the one we’re in; that makes RBC models seductive, but it doesn’t make them any less silly."
Krugman

Alta traición

No amo mi patria.
Su fulgor abstracto
es inasible.
Pero (aunque suene mal)
daría la vida
por diez lugares suyos,
cierta gente,
puertos, bosques de pinos,
fortalezas,
una ciudad deshecha,
gris, monstruosa,
varias figuras de su historia,
montañas
-y tres o cuatro ríos.

(JEP)

Amor y Control

Innovation

"How to nurture innovation by creating an environment that stimulates and encourages individual freedom, creativity, and constructive criticism."
Montenegro

Why no one saw it coming

"Everyone from the Queen of England to laid-off Detroit autoworkers wants to know why more experts did not see the financial crisis coming. It is an awkward question. How can policymakers be so certain that financial catastrophe won’t soon recur when they seemed to have no idea that such a crisis would happen in the first place?"
Rogoff

"Bernanke's the One"

"As this history suggests, it is more remarkable for a US president not to reappoint a Fed chairman named by the opposite party than to reappoint one who wishes it. Reagan’s failure to reappoint Volcker and Jimmy Carter’s failure to reappoint Arthur Burns are the main exceptions. The Fed chairmanship is the only position in the US government for which this is so: it is a mark of its unique status as a non- or not-very-partisan technocratic position of immense power and freedom of action – nearly a fourth branch of government, as David Wessel’s recent book In Fed We Trust puts it."
(By Brad DeLong)

A record of life

A Record Of Life from Owen Gatley on Vimeo.

To be an economist

Algunas imágenes de Real del Monte