They sound fancy and complex but this is a good explanation from XKCD. What I really like about it is that it emphasises how competition among networks is not unambiguously beneficial to consumers. For more on network effects and why they’re not the same as externalities check out the Palgrave description.
From the Pagan report on modelling at the Bank of England: Models and forecasts are important inputs into any decision-making process …[The] model used in the monetary policy process needs to incorporate the views of the MPC about the way the economy functions, ie to be theoretically coherent, and also be able to replicate historical […]
Though we rail against Government policies it is important to occasionally draw breath and realise how lucky we are! This reminder from Sebastian Edwards’ paper at an NZ Treasury conference on macro imbalances: The way New Zealanders’ think about the economy reminds me of Woody Allen. In most of his movies, the main character (Woody […]
Shamubeel asked yesterday why the Government is asked to fix every perceived problem. As inspiration for his forthcoming post I present the latest initiative from a city councillor in Essex: A council is considering urging taxi firms to provide cheaper cab fares for women who wear revealing clothes. Brentwood Borough Council is considering the bizarre […]
The past week has seen a lot of excitement in the UK with the announcement of forward guidance by the Bank of England. In my day job I’ve been writing and talking (at 1:22) about it a lot lately, although I tend to leave the macro blogging to Matt. However, I’m going to make an […]
Humans are boundedly rational and use heuristics to make decisions, rather than optimise at every turn. It doesn’t always serve us well: In the months after the 2001 terror attacks, passenger miles on the main US airlines fell by between 12% and 20%, while road use jumped. … Professor Gerd Gigerenzer, a German academic specialising […]