Ostrom and Williamson win Nobel

John Quiggin18 Comments

The award of the Economics Nobel (yes, yes, I know) to Elinor Ostrom and Oliver Williamson came as a big surprise, but is certainly welcome. I’ve always been keen on Ostrom’s careful and empirically-based analysis of common property systems (I did my Master’s thesis on this topic, and wrote a bunch of papers about it back in the 1980s), in contrast to the factually false Tragedy of the Commons story pitched by Garret Hardin. And Williamson’s work on transactions costs transformed the way economists think about these things, though we have yet to offer a fully satisfactory account of them.

Update Over the fold, an extended version I wrote for Crikey

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Praising with faint damns

John Quiggin9 Comments

The Australian’s Online Poll today is “Do you think the federal government deserves all the credit for averting a recession? ”

Obviously they judged that even the readers of the Oz weren’t going to reject the idea that the government deserves some credit for its successful management of the crisis. Even the obviously rigged version only got 62 per cent in favour at last count.

Bookblogging Micro-based macro

John Quiggin4 Comments

Over the fold, yet more from my book-in-progress, Zombie Economics: Undead ideas that threaten the world economy. This is from the Beginnings section of the Chapter on Micro-based Macro, and covers the breakdown of the Phillips curve and the rise of New Classical and Rational Expectations macro. This (along with the bits to come on DGSE models) is probably the section on which my own background is weakest, so feel free to point out my errors.

I’ve now posted drafts of the first three chapters (+Intro) at my wikidot site, so you can get some context. In particular, before commenting on omissions, take a quick look to see that the point hasn’t been covered elsewhere.

Micro-based macro is here

I’ve got a lot out of comments and discussion so far, and I hope some of this is reflected in what you are reading.

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Weekend reflections

John Quiggin123 Comments

It’s time again for weekend reflections, which makes space for longer than usual comments on any topic. As always, civilised discussion and no coarse language. I’ve cut off a thread-derailing discussion of the Pinochet dictatorship on another post, but those so inclined can go at it here, bearing in mind the comments policy and the requirement for civility.

Bookblogging: Micro-based macro

John Quiggin14 Comments

Another installment of my slowly-emerging book on Zombie Economics: Undead ideas that threaten the world economy. This is from the Beginnings section of the Chapter on Micro-based Macro. I’ve now posted drafts of the first three chapters (+Intro) at my wikidot site, so you can get some context. In particular, before commenting on omissions, take a quick look to see that the point hasn’t been covered elsewhere.

Micro-based macro is here

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Options after a double dissolution election

John Quiggin59 Comments

I’ve been thinking a bit about the possibility of a double dissolution. Given the complete incoherence of the Opposition, anything could happen, but it’s hard to see them agreeing on amendments that would be workable in any way. And equally it’s hard to imagine any outcome from a DD election other than a crushing victory for the government. Even so, a Senate majority looks out of reach.

That leaves them with two options after the election. They could use the joint sitting mechanism to pass the ETS bill rejected twice by the Senate. Alternatively (or subsequently), they could sign on to an agreement at Copenhagen and introduce new legislation implementing that agreement, relying on support from the Greens (or, in the event of a post-thrashing change of heart, the Opposition). The latter option looks a lot more appealing in many ways.

The worm in the bud

John Quiggin62 Comments

I finally read Gillian Tett’s Fools Gold

, an account of the development of the derivatives industry centered on credit default swaps (CDS) and collateralised deposit obligation (CDOs) that collapsed so spectacularly last year. The discussion is excellent, but still, I think, too charitable to these instruments and their creators. Tett’s main source is the group at JP Morgan who pioneered many of these derivatives and, largely, got out before the crash. Their line, unsurprisingly, is that the problem was not with the concept as they developed, but its abuse by latecomers.

But a close reading of Tett’s account yields a different story. These innovations were defective from day one.

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Bookblogging & bookwiki

John Quiggin2 Comments

I’ve been moving slowly on the book for the last few weeks, but I have taken one positive step to encourage further discussion. In response to suggestions from readers, I’ve started a wiki site imaginatively named Zombiecon where my plan is to post draft chapters. The Efficient Markets Hypothesis is already up. In part, the idea is to provide a reference to avoid some of the problems that arise from blogging a section at a time. But, if someone wants to create one or more talk pages on the site itself, that would be great. I’m not really sure joint editing in the mode of Wikipedia, but if you have suggested minor changes, go ahead and make them – I may revert or partially adopt them. ????? ???? ? ????????? ????????

Some interesting quotes

John Quiggin119 Comments

Glenn Milne

Any other outcome than the endorsement of Dutton by the Gold Coast Liberals would render the party not worthy of a vote across the country.

(Dutton lost).

Tony Abbott

The argument [on climate change] is absolute crap. However, the politics of this are tough for us. Eighty per cent of people believe climate change is a real and present danger.”

Malcolm Turnbull

I am very committed to my service to the people of Wentworth and I’ve got no plans to leave,

(on this, see JK Galbraith)

Miranda Devine

the fact is that you can articulate a position on climate change that does not dispute man’s contribution without buying into a complicated ETS,

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