Category: Uncategorized

Hot air over Poolbeg

As I expected, nothing happened yesterday. Times, Indo, and Examiner have the same story: Neither party walked away from the contract to build an incinerator in Poolbeg; and Minister Gormley continues in his role as leader of the opposition.

Meanwhile, of course, construction has halted — depriving a bunch of people from a job — and fines for breaching the landfill target accumulate.

The deeper issue was mentioned in the Times: ‘[Mr Tierney] said the managers of the four Dublin local authorities had been put in an “impossible position”. They had been given the responsibility by Government to ensure waste policy was implemented but “at the 11th hour complete and utter uncertainty has been created”.’

Long-term investment requires regulatory certainty.

A Comment on Comments

I think this blog has been a useful initiative and the comment feature has been an important part of this success. The large number of comments that the site receives is proof of its popularity and impact. However, unlike some popular economics blogs from other parts of the world (Calculated Risk, Baseline Scenario) the debate in the comments is often (not always) well informed and useful. Also, unlike many other blogs, the contributors here have often shown a willingness to engage with the commenters.

As everyone knows, the underlying economic news has generally been pretty bad over the past couple of years. And, even with signs of economic recovery around, there are lots of serious problems and things to worry about. For this reason, many of the posts focus on facts and figures that are negative.

Over time, certain patterns have emerged in the debate in the comments. Some of the commenters on this site have decided that there is somehow a conspiracy of bias among the contributors to deliberately focus on negative things or to (sigh) “talk down the economy” or that contributors are motivated by some sort of political agenda. For people who are contributing in an unpaid manner in their spare time and motivated by the desire to inform the public, this stuff is quite disheartening.

Debate in the comments is practically never censored – personal abuse and Don’t Get Philip Sued are, as far as I can tell, the only things that trigger contributors to lose precious time deleting comments.

However, policy on policing of comments is generally up to the individual contributor. Other contributors can make their own rules but, after what has been a particularly fractious week in the comments, I’ve decided to make the following request of people commenting on my posts:

1. No personal abuse of the economists who contribute to the site or other commenters.

2. No insinuations about grand conspiracies on the part of the evil blog henchmen or commenters.

3. No insinuations about contributors being motivated by their support for some political party.

Those who fail to honour the request should not be too surprised if at some point in between doing all the other things I actually get paid to do, I decide to delete their comments. Personal abuse of named individuals by those who decide to use a nom de blog will be particularly frowned upon. Also, comments whinging about having your comments deleted will also be deleted.

In return, those who keep to the guidelines can disagree with me all they want.

Frank Convery on ‘The Irish Economy’

Over at Comhar, Frank Convery has posted a detailed analysis of this Blog.

IMF: The Fiscal Situation in Advanced Economies

The IMF has released three major studies on the fiscal situation in advanced economies.

The summary is here, while the papers are available at:

Whelan on Ricardian Equivalence

I’m constantly surprised by the naivety of opponents of Ricardian Equivalence.  There are indeed many reasons why it may not hold. Some of these have already been mentioned in a previous post.  I can add another to the list: hyperbolic discounting. 

In addition, the difficulties associated with econometrically testing the proposition are almost intractable, mainly because of endogeneity considerations.  What is certain is the near impossibility of isolating a particular policy episode and conclusively asserting that it does or does not amount to an expansionary fiscal contraction.

Nevertheless, none of the arguments against Ricardian Equivalence are sufficient to enable us to conclude that there is no tax discounting whatsoever.  Such a view cannot provide “a valuable theoretical baseline”.   The same remark applies to policy.   Otherwise, the sort of spiralling sovereign debt burden, which Ireland is currently experiencing because of the bank bailout, would have no welfare implications because it would not affect private behaviour.