Matt Nolan

A modern version of an old economists joke

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You’ve all heard the joke about the Chicago economist who doesn’t pick up the $20 note on the pavement, as someone would have picked it up already.  All very good – it is discussed over at “Economist’s do it with models”.

The always brilliant SMBC has come up with a different take on this in his comic:

In both cases I think our problem stems from poorly defining the choice set – but that is sort of the point, it is an indication of how we can inadvertently misuse the EMH if we haven’t fully considered the types of expectations, the amount of competition involved, the existence of change from a steady state, and the general ideas of history dependent or emergent phenomenon.

Look, I didn’t say anything I said would be funny – but the comic is humorous ok!

 

Matt Nolan

Some links for today

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Hello all.  Here are some links I’d like to do posts on, but don’t have the time.  As a result, I suggest enjoying them for yourself!

Matt Nolan

Brief notes on communicating economic ideas

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Hey all.  I am doing a short presentation on communicating economic ideas – a bit of an abstract conversation where I talk about it in terms of assumptions.  This is similar to last year’s NZAE paper, but focused on only a subset of what was covered.

The presentation can be found here.

It is aimed at people who do economic modelling and have a core framework that they use with other economists.  It is about conceptualising the ways we adjust our arguments/models to communicate them to a broader public, and in turn focuses on the types of assumptions we put in place – and the ways economists need to be careful with how these are communicated, so to avoid accidentally misleading or overselling.

Matt Nolan

Discussion Tuesday

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Recently, I’ve been attempting to do aerial yoga.  This has led my friends to call me a hippy for some reason, what can I say economists are strange.  Anyway, this led to the following discussion statement from my friend – which he suggested I post (and I agree it would be fun to discuss).

Why would your null hypothesis be that being a hippie makes you less likely to be a dick than being a yuppie? If anything, hippies refusal to compete socially on the dimension of income just means that competition on all other dimensions is likely to be more fierce.

 

Matt Nolan

On free-riders and externalities

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Today I wrote a brief post on the Green announcement of a carbon tax.  I do support the carbon tax, but just wanted to raise some specific issues to think about.

However, a number of people on twitter were unhappy with me saying that, without Kyoto, we didn’t have an externality here – and I think their point is worth discussing.  I think a key issue here is the “group” involved and how we think of policy.  Hopefully by having a brief discussion here I can help to clarify what I was talking about in the prior post.

If this brief rundown isn’t sufficient, I don’t have anything more to say unless you add a comment here with a new framework – I’ve been as clear about my framework as I can be and really need to get back to work 😉

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Matt Nolan

Greens carbon tax

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I see that the Greens have announced a carbon tax to replace the emissions trading scheme (with details and analysis by BERL here).  The authors of TVHE have long been a fan of  this type of switch when discussing the issue (eg here and here).  And the idea of pricing an externality and using it to lower other tax burdens is a good one.  Note:  John Small also discusses here, with specific discussion about dairy.  Aaron Schiff discusses here.

So it should be unsurprising that I broadly agree with the aim Green party policy here, and this should be kept in mind while reading my post.

However, TVHE isn’t about saying what policies I think are good or bad – it is about considering trade-offs and thinking about the details of policy when we can.  In that context, there are a few points I must raise.

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