The IMF has a new Staff Position Note on the role of government intervention in improving the efficiency of household debt restructuring: you can read it here.
The Irish Times reports that
TAOISEACH BRIAN Cowen has announced the appointment of an innovation taskforce to advise the Government on its strategy for positioning Ireland as an international innovation hub and to assist in making the “smart economy” a reality.
The taskforce to assist in making the Smart Economy a reality doesn’t contain an economist of any sort, smart or otherwise. This seems to me to be a pity. Economists tend to think about the effect of policies on the economy in a somewhat different ways to scientists, civil servants and CEOs and could have had a useful influence on such a taskforce. (Hey, if we’re not for ourselves, who else is going to be?)
In particular, economists tend to think about government interventions in a more systematic way (What’s the market failure that these policies are addressing? Externalities? Natural monopoly?) and to better see the linkages between new initiatives and past industrial policies. Since there won’t be any economists advising the government on this taskforce, I would encourage participants in this blog to come forward a bit more to discuss these issues here.
One aspect of the current Smart Economy strategy for which, in my opinion, the likely economic impact is being exaggerated is the link from university innovation to start-up firms and jobs. Policies to encourage university R&D and its commercialisation may change the type of jobs in Ireland but they are unlikely to have much effect on the number of jobs. Similarly, the statistics on start-ups show that failure rates are very high, so as much it’s nice to talk about starting up a Nokia here in Ireland, the truth is that this process is highly random.
More generally, given the heavy emphasis in recent policy statements on university innovation and spinoffs, it is important be realistic about the role of such activity in other advanced economies. Engineer Richard K. Lester from MIT is an international expert in the interactions between science and the economy. Here is an interesting presentation titled “A Framework for Understanding How Higher Education Affects Regional Growth” in which he discusses some common “myths” with regard to university innovation.
Finally, here’s a link to an edition of the journal Capitalism and Society, which has a paper on the Oxford model of commercialisation as well as interesting comments from Lester.
The papers are behind a pay firewall which many of you won’t have access to, so here’s a brief excerpt from Lester’s comments:
Thanks to Philip for posting about the video of the the InterTradeIreland event. I was interested in the video footage because Ciaran O’Hagan had, justifiably, raised a question about my post last week about the Minister for Finance’s reported comments at this event. The Irish Times article I pointed to had partially summarised the Minister’s statement and Ciaran questioned whether we could really be sure that they had gotten it right.
Well, having looked at the video, I can say that the Times story accurately reflected what the Minister said. In addition, the Minister’s comments on the banking situation were actually far more interesting than reported by the Times, so I took them down and have repeated them below (on the video these comments start at about 8.50 in).
The first InterTradeIreland Economic Forum – Global Outlook took place in Dublin on the 18th June 2009. You can see the presentations here.
The Irish Academy of Engineering has released a report here which argues that enegy investment plans should be scaled back, and expresses scepticism about our high renewables targets.
Ashoka Mody leads the IMF’s work on Germany as well as on Ireland. He writes in today’s FT in praise of the German fiscal law: you can read it here.
I’ve been looking into the AIB debt buyback program, details of which were announced on Monday (Irish Times story here.) Why in God’s name would I be doing that during a rare sunny week in this country? Well, between the state guarantee and NAMA, pretty much everything the banks do these days has implications for the taxpayer, so it’s worth taking a look at. That and the fact that I’m a nerd. Wonky corporate financey post below the fold.