Enough of these zombie ideas: let’s be bold

That’s the title of my last piece in the Fin (Thursday before last), which was about the zombie push for productivity (code for working harder) and the failure to pursue the genuine productivity gains that can be achieved through improvements in education, and particularly better education for kids from lower-income families. Ross Gittins made a similar argument, with some nice touches a few days later in the SMH. I particularly liked his point that the “productivity agenda” is essentially about making life easier for bosses.

Enough of these zombie ideas: let’s be bold

Labor’s leadership struggle, reminiscent of the Howard-Peacock battles of the 1980s, has raised justified complaints that personality conflicts have obscured the need for a new reform agenda. Indeed, neither of the contenders for the Prime Ministership offered much beyond the consolidation of measures dating back to the government’s first term. On the other side of politics, Tony Abbott offers nothing more than opportunistic populism and appeals to the politics of fear.

Sadly, however, the advocates of reform have little more to offer than our current leaders. Rather, they are pushing an agenda that also harks back to the 1980s: the tired old package of microeconomic reform, workplace reorganization and productivity growth. The benefits of this package, oversold at the time, have long since been exhausted.

Even back in the 1980s, careful estimates suggested likely benefits amounting to only a few per cent of national income.

In respnse, the advocates of microeconomic reform invented ‘dynamic productivity gains’ that would supposedly be unleashed by reform. They seized on methods of estimating productivity growth that appeared, for a few years in the mid-1990s, to reveal a ‘productivity miracle’ unparalleled at any time in our history.

In reality, the apparent increase in productivity arose from the increase in the pace and intensity of work produced by the combination of microeconomic reform and the adverse labour market conditions that followed the ‘recession we had to have’. These increases in effort weren’t sustainable, and as Herbert Stein famously observed, a trend that can’t be sustained won’t be.

The speedup in the pace of work, and the resulting problem of work/life balance were described by John Howard as a ‘barbecue stopper’.The imbalance between work and life was apparent to everyone in Australia except the economists looking at the productivity statistics. Although work intensity can’t be measured directly, we can look at related measures such as the number of people working extremely long hours and the proportion of workers compensation claims citing stress. All these measures rose during the spurious productivity miracle of the 1990s, and fell back again during the 2000s. As a result, measured productivity growth slowed to a crawl in the 2000s, even as good macroeconomic performance and favorable terms of trade allowed steady increases in living standards.

The way ordinary Australians understand the push for productivity was underscored by the outpouring of anger against WorkChoices, and the lack of any support for its revival. As has been shown on numerous occasions, Australians understand that ‘workplace reform’ and ‘productivity’ are codewords for ‘work harder and faster, with less autonomy’. Yet, presented with a vacuum at the level of political leadership, the advocates of refrom can come up with nothing better than another attempt to reanimate these

Meanwhile, reforms that could produce genuine and sustainable improvements in productivity have languished. Rudd’s ‘Education Revolution’ is barely a memory. Julia Gillard, who once made much of her passion for education, dropped the phrase the moment she left the portfolio behind. Throughout her period as Minister, Gillard pointed to the forthcoming Gonski review of school funding as a reason not to take any substantive new steps in this area.

Gonski’s committee finally reported last week. It made a powerful case, on both equity and efficiency grounds, for a substantial increase in funding to the most disadvantaged schools, almost all of which are in the public sector. If we are to become a more productive nation, we cannot afford to lose a quarter or more of our young people to inadequate education and social exclusion.

The alternative can already be seen in the United States, where what was once the land of opportunity is now characterized by the highest levels of inherited inequality in the developed world, largely because of unequal access to education.

Gonski’s report was dead on arrival. Responding to the report, Gillard made it clear that the government’s need to achieve a surplus by 2012-12 trumped any need for long term investment in our future.

Naturally, the advocates of ‘bold reform’ are nowhere to be seen in this fight. The only concern of free-market thinktanks like the Centre for Independent Studies is to protect the class interests of wealthy private schools ‘Gonski: less for private schools, AFR 21/2/12’.

This is, indeed, a time for bold new ideas about reform. What we are getting instead is personality politics and zombie economics.

85 thoughts on “Enough of these zombie ideas: let’s be bold

  1. “for a substantial increase in funding to the most disadvantaged schools, almost all of which are in the public sector”

    Depending on how you want to define most disadvantaged, I’m not sure this is true — there are many nominally religious schools that are not exactly rolling in it. I also think there is too much focus on just the poorest schools. Getting kids to go from unemployed to employable will save you a lot in terms of social problemss, but finding the future stars in the rest of the population and getting them to learn maths properly etc. and not get them to settle on average is also really important.

  2. “This is, indeed, a time for bold new ideas about reform. ”

    I don’t even think they need to be new _ideas_ — just connecting the dots in many places will do. At present, for example, we will lose a large chunk of the female workforce when they have children. Things like better childcare and fiddles with the tax system could get them back into to the workforce much more quickly.

  3. A doubling of funding to education — much of it eaten by union salaries & pensions — has produced only worse schools & lower graduation rates, and lower test scores in America.

    Here’s the solution. Clap 3 times and sprinkle leftist fairy dust.

    That will work.

  4. The US has massively more inequity at all levels of the education system than Australia, thanks to local school financing, a highly stratified tertiary sector. As stated the original post, I’m in agreement with Fred that the US model is one to avoid, in education, health, tax policy etc.

    So, Fred, would you like to suggest some countries whose social systems produce better results than the US?

  5. The meme about “choice” needs to be done away with in education. There should be a national curriculum that specifies common textbooks, that would create economies of scale savings. Independent schools should be offered the choice of funding accompanied by heavy prescriptive oversight, sharing of facilities and garantees of access or they can be truly independent and stop receiving funding. Government schools should be given more power to expel problem students to create a better learning environment. Higher salaries for teachers would create a more competitive market for teaching. This could be phased in with a new class of teachers with a minimum requirement of a Masters of Education or PhD working under different employment and advancement conditions from normal teachers.

  6. Judging from the stellar perfomance of Finland’s heavily equality-focussed school system, I think that in a fair system the “stars” are quite capable of achieving all they can without needing special streaming.

  7. @conrad

    Average is only a bad thing when average is, well, a bad thing. If the average is very good, then we can be sure those ‘special’ students will have the education they need in order to seek the education they want for themselves. If you are purposefully diminishing the ‘average’ in order that a few ‘special’ students will stand out more readily, then you are doing both them and their classmates a great, horrible disservice.

    In truth I think most students are capable of success beyond what most poor schools have to offer. To suggest otherwise suggests you either know nothing of children or nothing of poor schools..

  8. “Average is only a bad thing when average is, well, a bad thing. ”

    I disagree — in many professions the productivity and creativity people have follow a power law. This includes, for example, high level science. So if you want truly ace science people, who basically drive science and make a massively disproportionate contribution to scientific discovery, you need to think of ways to stop people settling on average even if average happens to be good. There is very little attention paid to this in Australia.

    “Judging from the stellar perfomance of Finland’s heavily equality-focussed school system”

    Until relatively recently, Australia wasn’t far behind Finland (it still is pretty good), and a reasonable chunk of the more recent decline is likely to have nothing to do with equity — it has to do with gaming the system (i.e., schools trying to get high marks via getting students to do dumbed down maths, memorize essays etc., and more recently it seems likely that time wasted gaming the NAPLAN will also cause overall losses). In addition, some of the literacy categories in things like the PISA are biased, because English is simply a harder language to learn to read and write than Finnish.

    I also don’t see why people inevitably point to Finland. Singapore gets great results, as does HK and the newly introduced city of Shanghai. All of these countries/cities have higher levels of inequality than Australia, so clearly inequality isn’t everything (which is not to say it isn’t something). They all also care about the winners as well as the losers.

  9. conrad :
    I also don’t see why people inevitably point to Finland. Singapore gets great results, as does HK and the newly introduced city of Shanghai. All of these countries/cities have higher levels of inequality than Australia, so clearly inequality isn’t everything (which is not to say it isn’t something). They all also care about the winners as well as the losers.

    I think people don’t point to such places because of the culture pushing the results. I certainly don’t want Australia to become another HK where kinder-garden children are assessed on numeracy & literacy skills, musical instrument examination, parents social and financial status etc etc just to get into the kinder. Where non professionally educated folk are treated as 3rd class peasants. Where kids are pushed incredibly hard and in some cases (such as in China) are visibly labeled with a colored scarf IIRC to represent their academic result status. The Chinese system is incredibly antisocial and unhealthy IMO.

  10. Unfortunately the obvious boldnesses would make the prime minister’s head explode. They would involve things like scrapping the NAPLAN test score machinery, repealing the Fair Work Act and going back to enterprise bargaining, and stopping the Intervention.

  11. I agree with those who say we may not need new ideas but rather connecting the dots in many places (unless the idea of newness per se is not a good idea is new).

    Some suggestions for connecting dots:

    The meme “choice” in education is inappropriate (akin to Michael’s proposition) because education is concerned with the aquisition of knowledge and mental and physical development which by definition is not known at the beginning. How can anybody choose among unknowns?

    Doing away with “the meme ‘choice’ ” is not quite the same as saying pupils or students shouldn’t be allowed to choose between taking, say French or Indonesian as their foreign language. We don’t need the word ‘choice’ for that. We have the word ‘enrol’. Similarly, the notion of personal development is reflected in the words pupil and student in an education system that aims at developing individuals’ abilities to function as thinking, self-reliant and self-managing citizens in a society (as distinct from commercial clients of schools and universities).

    Corporatism and managerialism are not obviously “aligned” (to use contemporary HR terminology) with the objectives of educational institutions.

    Is it really necessary to have homework projects where the educational background of parents is tested rather than giving encouragement to the young to explore a topic on their own? I venture to suggest doing away with testing parent’s educational background could help to reduce the socio-economic disadvantages among pupils and students.

  12. Re: Productivity.
    I’m also not convinced the conceptually simplistic policies of the free-market economic rationalist textbook ultimately achieve better overall productivity without significant real world intervention. We know our manufactures can’t compete against slave labour on that “even playing field” hence the constant fall in non-resource driven manufacturing for decades. What’s not so obvious is the cost of sourcing everything overseas to business and productivity. Yup, it’s cheaper, but what about the costs of waiting months for land cargo to arrive? What if something is wrong with the products or something is missing? The fix is either to fast-track replacements (expensive air freight) or wait more months for sea freight or source locally. The problem with sourcing locally is you’re now confined to sourcing from niche small-run producers that whilst versatile, are incredibly inefficient and expensive at producing or modifying production run size quantities. Time is money, mobility is money, flexibility is money, quality control is money.

  13. @Troy Prideaux
    Addendum: an underlying aspect of the point I was making was that the businesses most susceptible to cheap overseas imports are the larger production run business models which generally require the highest levels of productivity. If your most productive businesses are disappearing at a disproportionate rate to the small niche shops, then that too should affect the overall productivity.

  14. Corporate capital now has democracy under the boot. Democracy is powerless. This is the reason that the majority of voting citizens cannot get a single measure passed in their own cause. Just ask the bottom 90% of citizens in the USA, Greece, Ireland or even Australia. When was the last time in the last 20 years that a measure with serious economic reform implications was in the interests of the bottom 90%? I can’t remember one.* We can’t reform anything from within this system unless we change the entire system.

    * The failed attempts at carbon cap and trade and carbon taxes don’t count precisely because the have already failed. They are too little, too late and catastrophic climate change is already in train.

  15. Ikonoclast :
    Corporate capital now has democracy under the boot. Democracy is powerless. This is the reason that the majority of voting citizens cannot get a single measure passed in their own cause. Just ask the bottom 90% of citizens in the USA, Greece, Ireland or even Australia. When was the last time in the last 20 years that a measure with serious economic reform implications was in the interests of the bottom 90%? I can’t remember one.* We can’t reform anything from within this system unless we change the entire system.

    Yet these people vote for the macro economic status quo even with housing affordability falling, household debt rising, job security a distant memory, higher unpaid overtime and higher productivity KPIs stipulated into their bargained packages.
    I suppose whilst we can afford an extra plasma TV each year (one in each room) and we have jobs & a decent health system, then well, maybe that’s all it takes.

  16. @Troy Prideaux

    Do they really vote for it? Did the Greek people vote for “Austerity” which means 20% cuts in pensions and public service wages? Did they vote for (part) paying the banks and going poor themselves? Did the Irish vote for indemnifying the foreign bond holders and foreign banks for private bank failures and doing it with Irish taxes? Did the people of the USA vote for the most inequitable society in the Western World? Did we all vote for huge CEO salaries, record corporate profits, saving large corporations with our taxes? No!

    Actually we (the bottom 90%) voted for none of this but we still got it. Did we get to vote for a system where creation of the sovereign currency is severely constrained but private banks are allowed to create as much debt money as they like and create CDOs, asset bubbles and ponzi schemes? Did the voters of the West (outside of the US perhaps) want involvement in the wars in Afghanistan and Iraq? No. In fact, the majority of the public in the UK and Australia were against it but our governments ignored us.

    Do we get to vote for major parties (Rep, Dem / Lib, Lab) that are actually different or are all their major policies nearly the same? It’s the latter. Their economic policies are determined by their corporate donors. People don’t vote for “housing affordability falling, household debt rising, job security a distant memory, higher unpaid overtime and higher productivity KPIs stipulated into their bargained packages”. So how come they get it?

    It’s because corporate capital (the big end of town) runs the country… all the countries in the West. Democracy is in its weakest state for at least 50 years. Small states are already essentially ruled (in economic terms) by a trans-national finance oligarchy.

  17. Great post, PrQ.

    Ikonoclast:

    “Democracy is in its weakest state for at least 50 years. Small states are already essentially ruled (in economic terms) by a trans-national finance oligarchy.”

    How does this apply to Iceland?

  18. @Mel

    Not sure about Iceland. They may have side-stepped the danger. Sometimes it helps to be small and far away from the centres of power.

  19. 1. “…the advocates of microeconomic reform invented ‘dynamic productivity gains’ …” (JQ)

    2. “Yet these people vote for the macro economic status quo ” (Troy Prideaux)

    JQ, you have written on the microeconomic reform program in Australia.

    Wasn’t it the case that microeconomic reform in Australia was ‘sold’ to the public (by means of implicit theorising, including undefined notions such as dynamic efficiency gains) on the grounds of macroeconomic performance objectives?

  20. @Dan

    I really don’t have any answers. It’s like being on tsunami watch right on the coast and seeing an incoming tsunami that’s clearly going to be much higher than your harbour wall. Anyone who claims they can stop it is just being a little King Canute.

  21. @Ikonoclast

    Yes but how did they side step the danger and how did being small help them but no one else? I’m trying hard here to get an intelligent response to back up your claims.

  22. @Mel

    There are two obvious differences between Iceland and say Greece. Firstly, in contrast to Greece, Iceland’s problem was private bank debt and not government debt. Second, the size of the Icelandic economy, measured in GDP terms (the relevant measure for financial debt) is so small, relative to the size of the bank debt, that the adage ‘You can’t get blood out of a stone’ becomes obviously relevant – even to the proverbial Wall Street bankers.

    There may be a third factor, namely the types of physical assets in Iceland vs Greece – wind swept almost barren land and rough climatic conditions vs islands in the mediterranean sea. (Conditions might change with average global warming. Maybe the proverbial Wall Street bankers assign a zero probability to this state contingent event.)

  23. Ikonoclast :
    @Troy Prideaux
    Do they really vote for it? Did the Greek people vote for “Austerity” which means 20% cuts in pensions and public service wages? Did they vote for (part) paying the banks and going poor themselves? Did the Irish vote for indemnifying the foreign bond holders and foreign banks for private bank failures and doing it with Irish taxes? Did the people of the USA vote for the most inequitable society in the Western World? Did we all vote for huge CEO salaries, record corporate profits, saving large corporations with our taxes? No!

    My point was relating specifically to Australia (apologies for the confusion), but to put it this way – if you voted for either of the major parties in either the US or Australia, you’re pretty much voting for macroeconomic status quo. Even those on the left of the Labor Party (eg. Doug Cameron or Anthony Albanese) aren’t willing to openly canvas significant macroeconomic policy reform.
    What’s more, I want to distinguish that I wasn’t referring to financial regulation reform or banking recklessness or even corruption/cronyism when I referred to macroeconomic policy.

  24. @Ikonoclast

    Don’t worry, you’re in very good company. Even David Harvey pretty much has, “Join an anti-capitalist group”.

    I’ve been debating this with a good friend of mine doing a PhD in political science who identifies as a Marxist/Leninist and he doesn’t seem to have a coherent position either. He defends himself by saying that the sort of planning I am asking him for has never been an element of any revolutionary or post-revolutionary period. But I think this is a cop-out, because the challenges we face now are collective action problems in a way that previous crises have not been. (Thanks, globalism.)

    Basically as far as I can see the only thing that can a) push things in the right direction and b) actually, see (a) again is good old social-democratic reform, ideally through multi-national fora, and on steroids.

  25. @Mel

    What is your problem?

    The IMF gave 1.3 billion of credit (SDR), and repayments are scheduled through to 2016 plus interest.

    The population of Iceland is equal to the ACT.

    I am sure that the ACT could be bailed out easily (but temporarily) if it was flooded with over a billion worth of credit.

  26. Ikonoclast :
    Do we get to vote for major parties (Rep, Dem / Lib, Lab) that are actually different or are all their major policies nearly the same? It’s the latter. Their economic policies are determined by their corporate donors. People don’t vote for “housing affordability falling, household debt rising, job security a distant memory, higher unpaid overtime and higher productivity KPIs stipulated into their bargained packages”. So how come they get it?

    They’re the consequences of some of the virtues they are voting for and the modern globalized world we live in.

  27. I haven’t read the thread carefully, but Iceland certainly didn’t sidestep the crisis or avoid rule by a financial oligarchy. They’ve rejected market liberalism more sharply, recovered a bit better and are now putting the former PM in trial, but the damage is still huge.

  28. Regarding my comment @25 about the government debt of Iceland vs Greece and assuming the data on the following web-site is comparable* across countries, Iceland’s government debt as a percentage of GDP prior to the GFC was much lower than that of Greece

    Iceland:http://www.indexmundi.com/g/g.aspx?v=143&c=ic&l=en

    Greece: http://www.indexmundi.com/g/g.aspx?v=143&c=gr&l=en

    I believe the distinction between before and after the GFC (onset in 2007 as far as easily available public information is concerned) is important because just about all countries ‘public debt increased as a consequence of the GFC.

    * In particular, I don’t know how the data underlying the graphs takes into account the series of upward revisions of the public debt in Greece.

  29. Iceland has a strange history. Libertarians adore it because they can claim it was an anarchic society during the Old Commonwealth period. What they do not seem to understand is that the Old Commonwealth fell because the go?ar, the officeholders, sold the commonwealth to the Danish king) Sort of a bad precedent really…

  30. Good post JQ. While I generally prefer Labor to Liberal, I always thought the “benefits” of the 1980s productivity agenda were oversold. In my field opportunities to do post-graduate training actually declined. That hardly increases productivity if you are an engineer. I think many employers simply took the falling real wages as an opportunity to improve profits through cutting costs and reduced investment.

    Perversely, I think taxing employers too low discourages investment in real productivity growth. Look at mining – wage costs are high, so productivity and capital investment is stellar, because it has to be.

    Conrad
    “In addition, some of the literacy categories in things like the PISA are biased, because English is simply a harder language to learn to read and write than Finnish. ”
    You obviously have never studied Finnish. It is a very grammatically complex language, though with a logical and consistent structure. Plus, all Finnish students have to study Finnish, Swedish and English from primary school. Many do Russian or German as well in high school. The reason they do better on literacy tests is they have more comprehensive schooling in languages. That is necessary because they are a small country surrounded by nations who do not speak their language. You might as well ask why do most Czechs speak four languages.

    Many here are interpreting Finnish educational success as a justification for various policies. Having a Finnish background, I would say the biggest factor is cultural – Finland has a long tradition (at least to 1930s) of valuing education, and educators. So teaching is a respected job. I think the better wages for teachers, and high entry standards, flow from that. I wouldn’t care to ascribe it to any one policy measure.

  31. @Socrates

    Finnish education is what I regard to as successful from looking at the website suggested by Dan and Mel. I have a Chinese background and I know their scores are from pure cramming, during my time as a primary school student in China I woke up at 6 go to school at 7 finish at 5 and do homework at night which usually takes 2 hours or more. Many people that I know who are now university student, graduates in their high school time have study time from 6am-10pm monday to saturday (sunday tutoring).

    What I’m worried about is that I hope Australia’s future education to not to follow the paths of Asian countries like China and Japan, but more close to Finland. The young generations in Asian countries have immense stress that caused high suicide rate in Japan and psychological damage to the development of their mental health and childhood in China.

  32. “You obviously have never studied Finnish”

    see for example: http://onlinelibrary.wiley.com/doi/10.1348/000712603321661859/abstract for real evidence.

    “Having a Finnish background, I would say the biggest factor is cultural – Finland has a long tradition (at least to 1930s) of valuing education, and educators. ”

    I agree, I think most of the differences between Finland and here would account for very little variance. This is why other places with entirely different systems do well.

  33. Would anyone here have any thoughts on this furtive Pacific Trade treaty about to be negotiated.
    If there is not thing to fear, for the public, why the secrecy?
    Watching 4 Corners on Monday night you wonder at the what terms and conditions were negotiated behind closed doors, to draw Ireland into the European web and if much of what went on behind closed doors had been open to public scrutiny, whether the Irish public would have permitted this level of onerous public exposure to private incompetence and greed.
    BTW, if I get some sort of sensible response to my raised concerns to the Pacific Free Trade agreement, it will be a first…

  34. @Socrates

    “Perversely, I think taxing employers too low discourages investment in real productivity growth. Look at mining – wage costs are high, so productivity and capital investment is stellar, because it has to be.”

    I agree. Reasonably high minimum wages may also encourage extra training for low income workers and more egalitarian wage structures within firms (while possibly still contributing to unemployment) . I think economics is full of interesting and rather complex webs of causation.

  35. @Socrates A lot of those benefits were outside of govt influence eg faxes and later on mobile phones. Much of the productivity agenda was, in essence, for govt to get out of the way. Of course, this was followed to the nth degree resulting in a massive overshoot with results that could be termed catastrophic.

    Unfortunately privatisation and outsourcing has not been the answer to everyone’s prayers. Similarly the conflict between profit and policy has not been resolved, at all.

  36. Ahh, I see… thank you to those responding; most of all Prof Quiggin himself. Just here from elsewhere, so am relieved answers are finally coming.
    If some thing is secret, I just think there must be some thing to be guiltily hid, that people may have a right to know about.

  37. The real question is are they the traditional creeping zombies, or the freaky ones that can sprint? Compare “Night of the Living Dead” to “28 Days Later”. I suspect the former.

  38. Also, many micro-economic “reforms” have been huge steps backward. The Hecs system, super-annuation, the rise of private health etc, all these have been productivity disasters.

  39. John Quiggin says “Let’s be bold”. Iceland has been bold (to date) by maintaining its own currency. Bill Mitchell (of MMT persuasion) compares Iceland to Greece. Bill’s main thesis in this context is that a government that maintains its own fiat currency retains proper control of its own fiscal and monetary policy. It thus has good chances to effectively direct its own economy. Conversely, a government which gives up its own currency and uses a foreign currency (The Euro in Greece’s case) loses the ability to direct its own economy. The results are that Greece’s “recovery” from the GFC is a continuing depression but Iceland is making headway in its recovery.

    http://bilbo.economicoutlook.net/blog/?p=18609#more-18609

    Bill Mitchell sources many of Europe’s problems to the EMU itself. Governments have given up currency sovereignty and are effectively using a foreign currency run by econocrats and financial oligarchs. Not only is this undemocratic it is plain bad economics. To date, Bill Mitchell’s analysis has been vindicated. The Eurozone, of any developed region, displays the worst recovery profile post GFC. MMT or Functional Finance or Keynesian counter-cyclical spending (choose your favourite flavour) is empirically vindicated.

    MMT has the same robust decmocratic and pragmatic flavour as Keynesian counter-cyclical spending. However, MMT also has some extra chunky bits that the more orthodox break their brittle theoretical crowns on! 😉

  40. @Ernestine Gross

    Do you think it odd? I do. When you say “Icelanders” do you mean the majority of the democratic polity or a few neoliberal politicians who think they can ignore the democratic polity and make more money for themselves and their mates?

    Rhetorically I would ask, what advantages do they think they can gain from joining the EU and Euro? What is it about Greece’s predicament that they wish to emulate? Why would they leave their current path where they are doing better than Greece? (Suffering some pain but not as much as Greece?)

  41. @Ikonoclast

    I don’t wish to speak on behalf of the people of Iceland. By Icelanders I mean the people who were surveyed at varies times on the topic of interest, as reported in the web-site I referenced. The topic of interest is whether or not Iceland should or should not join the EU and adopt the Euro. The survey results varied over time including a reversal of results. This is not surprising because the information set of people changes and not necessarily evenly across the entire populaton.

    The web-site I referenced contains several variables that apparently entered the discussions about the topic of interest. One of them is the huge variability of the value of the Icelandic Krona against the US$ and the Euro (can’t remember whether other currencies were mentioned). This variable is important for international trade, including tourism. Another variable is inflation. Another variable is the currency used in private contracts between employers and employees.

    Comparisons of countries on the basis of one institutional factor (eg monetary sovereignity) are, IMHO, worse than useless even in a time series context. Theories that rely on such methods result in Zombie ideas (such as neoliberalism and MMT).

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