I do not have time to fully develop this point but there have been several media reports in recent times on the adverse impact of Ireland’s improved road network on the demand for inter-city air travel and train travel within Ireland. These reports focus on the negative impact on the suppliers of air and train travel and the requests for increased public funding to upgrade air and train networks to compete. However, the more direct public-interest interpretation is that part of the payoff to the major investment in the road network is that fewer resources need to be absorbed by providing air and train links where the road network now dominates. (If it turns out that environmentally-optimal road pricing would call for more trains and planes, that is a valid argument. But to justify extra investment just on the basis of losing market share to the road network is not a strong argument in itself.)
Category: Uncategorized
This new World Bank Policy Research working paper looks at the impact of economics blogs
Summary: There is a proliferation of economics blogs, with increasing numbers of economists attracting large numbers of readers, yet little is known about the impact of this new medium. Using a variety of experimental and non-experimental techniques, this study quantifies some of their effects. First, links from blogs cause a striking increase in the number of abstract views and downloads of economics papers. Second, blogging raises the profile of the blogger (and his or her institution) and boosts their reputation above economists with similar publication records. Finally, a blog can transform attitudes about some of the topics it covers.
Around the time of the EU/IMF deal for Ireland, Patrick Honohan advocated that it would be more effective if the financial risks associated with fixing the Irish banking system could be shared across the European system, rather than just making ‘plain vanilla’ official loans to the Irish government.
In her Jackson Hole remarks, Christine Lagarde agrees:
Second, banks need urgent recapitalization. They must be strong enough to withstand the risks of sovereigns and weak growth. This is key to cutting the chains of contagion. If it is not addressed, we could easily see the further spread of economic weakness to core countries, or even a debilitating liquidity crisis. The most efficient solution would be mandatory substantial recapitalization—seeking private resources first, but using public funds if necessary. One option would be to mobilize EFSF or other European-wide funding to recapitalize banks directly, which would avoid placing even greater burdens on vulnerable sovereigns.
Today’s FT lead article also makes the same point – but where the EFSF would guarantee funding lines for banks, rather than inject capital.
John Fitzgerald assesses the prospects for the Irish fiscal situation in this Sunday Business Post article.