Month: May 2006

Wikipedia economics category project

John Quiggin19 Comments

I’m getting involved in Wikipedia and my big project is to set up a categorisation system for economics based on the JEL Classification system.

I think this scheme is robust enough to allow for an expansion of Wikipedia to compete with specialist works like the Palgrave Dictionary of Economics, though this is obviously a long way off. As mentioned in previous posts, I’m very optimistic about Wikipedia’s potential, but the economics section is a long way short of being a comprehensive reference source at present. One side effect of the project is to reveal that there are whole categories in the JEL system for which Wikipedia doesn’t have an article – Computable General Equilibrium models for example.

Anyway, I could do with a bit of help on this from readers with at least some knowledge of economics. Basic Wikipedia editing skills (or willingness to acquire them) are desirable, but if you just want to write articles on gap topics, I could wikify them for you. Contact me by email or in the comments thread, if you want to help.

UpdateThanks for the positive response. I’ve got a starting list of articles that don’t seem to exist:

Exchange economy
Factor income distribution
Atlruism in economics (section in existing altruism article)
Expectations (with link to existing articles for rational and adaptive expectations)
Economics of contract law
Stochastic games
CGE models

and also some stubs (existing article is just a starting point)

Incomplete markets
Social choice theory
Economic methodology

THere’s a larger list of stubs here (though many seem not to need much more than a stub) and requested articles here. In terms of my particular project, if people could try to work out the appropriate JEL category and use that (if it exists already) or advise me (if it doesn’t) that would be great.

Weekend reflections

John Quiggin42 Comments

Weekend Reflections is on again. Please comment on any topic of interest (civilised discussion and no coarse language, please). Feel free to put in contributions more lengthy than for the Monday Message Board or standard comments.

Souffle rising a third time ?

John Quiggin38 Comments

The resignation of Victorian Opposition leader Robert Doyle has produced widespread suggestions that Jeff Kennett should return to politics. While Kennett could scarcely do worse than Doyle, there’s not much reason to suppose he would do a great deal better.

The core of Kennett’s political appeal in the 1990s was the claim that, thanks to Labor’s mismanagement, Victoria was in a state of crisis that could only be remedied by the radical free-market reforms he advocated. Voters bought this story in two successive elections, but had tired of it by 1999, when he was narrowly defeated. Although some claimed at the time that voters had merely intended to “send the government a message”, a string of Labor victories in by-elections suggested the opposite message – once the possibility of getting rid of Kennett became a reality, voters embraced it with enthusiasm.

Kennett’s biggest problem though, is that everything the Bracks government has done can be seen as preparation against a possible Kennett comeback. On the one hand, they’ve been obsessed with avoiding anything that would smack of fiscal irresponsibility. Official debt levels have been held down through expedients like Public-Private Partnerships (the apparent benefits are bogus, but Kennett can scarcely argue this, having been a pioneer of the PPP mania). On the other hand, they’ve restored a lot of the cuts to schools, hospitals and so on made under Kennett. As a result, Bracks can easily run a scare campaign against Kennett, but not vice versa

It’s hard to see Kennett winning in the election due in about six months, though presumably there will be some clawback from the 2002 disaster. In the longer run, anything can happen. But if he comes back, I’d say this implies a commitment to stick out a full parliamentary term as leader, and it’s not obvious that he’d be willing to do this.

As for Doyle, he will only be remembered, if at all, for his irresponsible campaigns in favour of speeding (more precisely, against any effective measures to curb speeding). His departure from politics is long overdue.

More on the souffle question from Rank and Vile

UpdateSo much for that idea

The unpleasant arithmetic of compound interest

John Quiggin134 Comments

For the last decade or so, most of the English speaking countries have been running large and generally increasing trade deficits, and therefore running up increasing foreign debt. At the same time, until recently, both real and nominal world interest rates have been falling, which has made debt more affordable. This has produced a sense of security which is about to be reality-checked.

Short-term interest rates have been rising for the last couple of years, and now long-term rates are rising as well. The US 10-year bond rate is now 5.1 per cent, and has been rising fairly fast in recent weeks. The effect is to add a rising interest bill to a large and growing trade deficit. Brad Setser does the math for the US and it isn’t pretty.

If the average rate [on private and government debt] should rise to 6% — roughly the interest rate the US paid back in 2000 — the 2008 US interest bill would reach $420b. That is more than three times the 2005 interest bill.

Unless the trade deficit starts turning around fairly sharply, this would imply a current account deficit close to 10 per cent of GDP, which no country has ever sustained (please point out exceptions in comments).

The story for Australia is broadly similar, though the picture is complicated by the effects of commodity prices, which still seem to be generally rising. As long as that continues, our trade deficit should decline. But, high commodity prices have rarely been sustained for more than a few years at a stretch.

Finally, the organ grinder

John Quiggin57 Comments

We’ve had a string of monkeys, but finally the organ grinder appears. Alexander Downer has a deplorable piece in today’s Oz, attacking John Curtin yet again. Downer quotes Wurth’s piece from last week, managing to omit Wurth’s observation that Menzies was the worst appeaser of all.

It’s pretty unedifying stuff, but if Downer wants to compare personal and historical records, it certainly won’t be to the advantage of Menzies or the Liberal Party and its predecessors.

Rather than dive into this yet, let’s look at the current debate. Downer is promoting the credentials of the Liberals as the war party, against Labor’s pacifism. Right now, we have a disastrous war in Iraq, which has immeasurably strengthened the forces of global terrorism, while dividing and weakening the democratic world, and leading to the commission of crimes including torture and murder on a large scale by those who are supposed to be defending civilised values. On the horizon, we’re promised new wars with Iran, Syria and, if you listen to the government’s most vociferous supporters, the entire Islamic world. Pacifism may not always be the answer, as John Curtin recognised, but it’s greatly preferable to the warmongers who are in charge today.

Folding @Home

John Quiggin8 Comments

Among the fun and useful things you can do with your computer, distributed computing (using spare cycles on lots of personal computers do do big jobs) has always interested me, and I’ve now signed up Folding @Home which models the folding process needed for proteins to function. Misfolding contributes to diseases such as Alzheimers.

Folding @Home encourages team efforts and I can see why. After a week, my G4 Powerbook has only managed 18.25 per cent of the first job (the program doesn’t impose any perceptible load on the processor). So I’ve set up a team called “Ozploggers” and I hope some readers or fellow bloggers will join it. The team number is 50303. To join just go the Download page pick a user name, and nominate this team. Feel free to notify me in comments or by email.

UpdateWith a few readers joining in, the pace has picked up noticeably, reaching 29 per cent today. So please, some more volunteers. It’s fun to watch the simulations, you can get a screensaver if you want to, and there’s a pretty good chance that you will help to save lives.