Author: John Quiggin

Sesquicentenary

John Quiggin5 Comments

I got an article accepted in a journal today and, if my count is correct[1], it is number 150 for me. Since my first article was published in 1979, that’s an average rate of six a year, with a slowly increasing trend. It’s not a startling rate of output, given that I’ve held research-only jobs for most of those 25 years. Still, by the time you take acccount of rejections, resubmissions and so on, there’s a fair bit of work involved, and not that many people keep up the pace indefinitely.

Because I’ve been active for quite a while, and because my work doesn’t exactly fit the mainstream mould in either policy content or analytical style[2], I’ve accumulated a lot of rejection letters, more than anyone else I know of, in fact. My records aren’t good enough for a complete tally, but I’ve certainly had several hundred rejections – I once got three on one day. Some papers have been rejected half a dozen times or more before finding a home. This isn’t quite as bad as it sounds. Most high-grade journals in economics have rejection rates of 90 per cent or more, which implies the average paper must be rejected pretty often.

On a happier note, I’ve covered a lot of different topics and used a range of different approaches to economics, more than most of my colleagues. For example, I’m pretty sure I’m the only person who’s published in both the Journal of Mathematical Economics and the (institutionalist) Journal of Economic Issues

fn1. I publish a fair bit of policy stuff, and there’s sometimes a bit of doubt as to whether the resulting paper counts as “refereed”. I usually err on the side of caution, but there are always marginal cases.

fn2. A lot of the time, it’s not so much that I’m challenging mainstream orthodoxy in a broad sense as that I don’t like the established way of doing this in some particular subfield, such as principal-agent theory.

Politics and sport

John Quiggin15 Comments

You might have hoped, with the end of the Cold War and all, that we could have an Olympic games free of global politics[1] Not as far as the Oz is concerned, running this turgid piece of triumphalism from Daniel Henninger of the Wall Street Journal. I doubt that many of the athletes he attempts to exploit would go along with him.

The Iraqis in particular have made vigorous protests over attempts by George Bush to score political points from their presence. Here’s what their coach has had to say

My problem is not with the American people. They are with what America has done – destroyed everything … The American army has killed so many people in Iraq. What is freedom when I go to the stadium and there are shootings on the road?

It’s not clear whether Henninger is arrogantly disregarding their protests or whether he wrote the piece earlier and the Oz has failed to keep up with the news.

fn1. Of course, as the troubles of several Australian teams have shown, there’s no way of getting away from the internal politics of sport.

What should retired public servants do?

John Quiggin7 Comments

Rafe Champion alerted me to this piece by John Stone on the politicisation of the public service, and the role of retired public servants. Stone makes some valid points, but since he refers to his own dealings with government, I think it’s reasonable to point out that Stone himself is responsible for the first big breach in one of the most important conventions that used to prevail in Australia; namely that retired public servants and politicians should retire fully, or at least not take jobs that involve a potential conflict of interest with their previous positions. Stone had barely retired as Secretary of the Treasury when he started attacking the government vigorously in newspaper columns, and not long after that he was elected to the Senate for the National Party (as I recall, double-dipping his public service pension in the process). Since then, we’ve seen a steady erosion of the notion of the public service as a lifetime career, and of political office as the final stage in a career, preferably one marked by achievements outside politics.

A stint in politics or the public service is now seen as a routine stepping-stone to a more lucrative career in business, particularly highly-regulated businesses or lobbying and PR firms, where the contacts and inside knowledge acquired in the public sector represent a valuable asset. Given that people are starting with that expectation, it’s bound to affect their dealings with the business sector. Everyone they meet there is a potential future employer. And, of course, as the transition approaches, the temptation to do some more explicit mutual backscratching becomes stronger. The disgraceful behavior of former Health Minister Michael Wooldridge[1] before his departure for the private sector is one of the more egregious examples.

fn1. As noted here, Wooldridge approved a $5 million grant to the Royal College of GPs for a building to help co-locate several doctors’ groups. That same organisation subsequently employed him as a consultant.

Interruption of service

John Quiggin3 Comments

Service was interrrupted for a few hours just now, but for a fairly pleasing reason. My bandwidth limit of 2GB/month, which was ample when the blog started, has been exceeded, as a result of higher readership, so the server automatically cut me off. I now have a 10GB limit which should last a fair while.

Monday Message Board

John Quiggin31 Comments

It’s Monday again, and time for the Monday Message Board. Post your comments on any topic (civilised discussion and no coarse language, please). I’d be interested in general reactions to the Olympics – too much sport or not enough?

The other deficit

John Quiggin14 Comments

I was looking at the latest US trade figures from the Bureau of Economic Analysis and thought, rather unoriginally, that this is an unsustainable trend. Despite the decline in the value of the US dollar against most major currencies[1], the US balance of trade in goods and services hit a record deficit of $55 billion (annualised, this would be about 6 per cent of Gross Domestic Product) in June. The deficit has grown fairly steadily, and this trend shows no obvious signs of reversal, at least unless oil prices fall sharply.

This naturally, and still rather unoriginally, led me to the aphorism, attributed to Herbert Stein “If a trend can’t be sustained forever it won’t be”. Sustained large deficits on goods and services eventually imply unbounded growth in indebtedness, and exploding current account deficits[2], as compound interest works its magic. So, if the current account deficit is to be stabilised relative to GDP, trade in goods and services must sooner or later return to balance or (if the real interest rate is higher than the rate of economic growth) surplus

But forever is a long time. Before worrying about trends that can’t be sustained forever, it is worth thinking about how long they can be sustained, and what the adjustment process will be.
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Gold for Gold

John Quiggin25 Comments

I was talking with colleagues yesterday about the economics of the Olympics of the medals and speculated that, with the East Germans gone, we spend more to enhance our chance of winning gold medals than any other country. This morning I received, from Jack Strocchi, a column on the topic from Andrew Bolt which makes exactly the same claim, giving an estimate of $50 million in public expenditure per gold medal.
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FTA vs PBS as the election issue

John Quiggin16 Comments

It’s looking increasingly possible that the conflict between the Pharmaceutical Benefits Scheme and the US-Australia Free Trade Agreement will become the central issue of the election. It is also increasingly apparent that, contrary to all the reassurances we got when the agreement was announced, that the FTA and the PBS are in mortal conflict, and that only one of the two can survive.

Today’s developments include a statement from US Ambassador Schieffer that the US may not certify that our legislation implements the FTA and more commentary from sources close to the government, all suggesting that this is a really big deal.

Reading Christopher Pearson’s column in particular, it is notable how thoroughly it undermines the claim that the FTA presents no danger to the PBS. He talks about the remedies available to the US in relation to Labor’s amendments. In addition to the possibility that the Americans will walk away from the agreement altogether, he points out two further possible courses of action.

The second aspect of the amendments likely to cause concern is that trade agreements are negotiated on the basis of “standstill”. In other words, once an agreement is reached, the parties are expected not to introduce legislation that would alter their relative positions.

Finally, the Americans could argue that the amendments are likely to give rise to a dispute under the “reasonable benefits” clause, in the event that their drug companies are unable to realise benefits that they anticipated would flow from the agreement.

What’s critical to note here is that these points have nothing to do with the specific content of Labor’s amendments. They apply to any legislation concerning the PBS that an Australian government might seek to introduce in the future and, arguably, to any administrative decisions made by Ministers. If Pearson is correct[1], the FTA gives the Americans an effective veto power over anything we might attempt to do to improve the functioning of the PBS. It’s notable that Pearson’s points are almost identical to those that have previously been made by critics of the deal, and pooh-poohed by the government.

It is critical, in both policy and political terms, for Labor to hold its ground. Even without the threat to the PBS, this was a lousy deal. If the Americans refuse to certify, Labor should announce its intention to renegotiate the entire deal, this time on equal terms.

fn1. Pearson is clever and well-informed, but he’s never shown any previous knowledge of international treaty law. In the absence of references to independent experts, I think it’s reasonable to take these claims as coming from sources inside the government.