I was glad that James discussed a bunch of the literature that uses habits and habit persistence yesterday. I have run into the idea of habit persistence in consumption before while doing macroeconomic modeling, and it was good to see him bring it back to the observed phenomenon of reference dependence in individuals – as […]
I have repeatedly been informed that the “economic man” is a poor description of individuals, and given this economic models provide a poor description of the world we live in. As I have said previously, I don’t agree with this conclusion – and we really need to ask what an economic model is, and why […]
On Sunday I was sent a copy of an article where I was taken completely out of context. While I am sure that this wasn’t intentional I would just like to point out that I believe the opposite of what the article suggests – I believe that households are significantly better off than back in […]
According to this story on Stuff, the people of the world are simultaneously threatening to eat all the worlds resources – while being obese. If that sounds non-nonsensical to you then you would be right – this is the nature of discussing the allocation of resources without taking account of prices. Here is their “scientific” […]
I see that the latest Barfoot figures are out, and they are pointing to fairly strong sales figures in the Auckland region. That’s nice. There are also suggestions that this is indicative of a bubble or boom coming into the housing market. However, it is important to look at a broader view of what is […]
This article on stuff seems to throw down a great set of principles to keep in mind when talking about the New Zealand economy with New Zealand macroeconomists – in a way that intelligent people not versed in economic prose can understand. They are: Commodities are our comparative advantage, they are what NZ is relatively […]