tag:blogger.com,1999:blog-2830084253401570472.post3355163091303317809..comments2024-03-28T09:22:36.967+13:00Comments on Offsetting Behaviour: Negative value added: education editionEric Cramptonhttp://www.blogger.com/profile/15831696523324469713noreply@blogger.comBlogger11125tag:blogger.com,1999:blog-2830084253401570472.post-32105124359653177632014-09-15T09:23:42.752+12:002014-09-15T09:23:42.752+12:00James. I've been thinking about Point 2 some m...James. I've been thinking about Point 2 some more. Why is it that a country could not have more than one currency if it comprised more than one optimal currency area. I think the question is moot because borders are so hugely important, that optimal currency areas are never smaller than individual nation states. So point 1 is trumps all.Seamus Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-61102222365347656922014-09-14T23:48:06.917+12:002014-09-14T23:48:06.917+12:00James. I think your conclusion depends on the foll...James. I think your conclusion depends on the following: <br />1. Scotland's relatively poor performance since the GFC is purely because it is an optimal currency area and so looser monetary policy is all that it needs to perform better; because<br />2. The only way to achieve a separate currency is to separate from the U.K. <br />3. The benefits of inflating out of the crisis will be so large that the other costs associated with operating a separate currency to the Disunited Kingdom will not outweigh them. <br />4. There is no other way of achieving the relative price changes implied by depreciation. <br /><br /><br />I can buy point 2. I think 1 is highly unlikely. All the literature on how much international borders restrict trade relative to what gravity models of distance would imply suggests to me that 3 is even more unlikely. And even the stickiest models of sticky prices don't suggest that relative prices stay unchanged forever, even under a fixed exchange rate.Seamus Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-92064479934250915342014-09-14T00:39:27.246+12:002014-09-14T00:39:27.246+12:00Hey Seamus,
I'm not too sure about this one. ...Hey Seamus,<br /><br />I'm not too sure about this one. I pulled the Scottish economic statistics up (http://www.scotland.gov.uk/Topics/Economy/Statistics) and Scotland's economy has been in a bad state since 2008. Whereas New Zealand came out of the GFC in 2010, Scotland has been mired in the slump up until this year.<br /><br />That's 6 years of national economic under-performance. I can't help but wonder whether being part of the United Kingdom and having the pound as its currency means Scotland's export competitiveness is being determined by the strong English economy which is setting the pound's exchange rate.<br /><br />Krugman's article talks about problems of independence AND retaining the pound. Independence and ditching the pound for a floating exchange rate might just be the ticket for rebalancing Scotland's export price competitiveness and revitalising their economy.<br /><br />Thoughts?James Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-84619765468394986232014-09-10T09:21:12.498+12:002014-09-10T09:21:12.498+12:00Your links are pretty depressing. But the age brea...Your links are pretty depressing. But the age breakdown may not be cause for too much pessimism. After the first Quebec referendum, the conventional wisdom was that it was only a question of time as young voters were more separatist than older voters. It turned out that that was an age effect, not a generational effect. As those young separatists grew older, their views mellowed somewhat.Seamus Hogannoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-56139663738270917772014-09-10T08:48:46.863+12:002014-09-10T08:48:46.863+12:00You're right. That's exactly what I should...You're right. That's exactly what I should have written.Eric Cramptonhttp://offsettingbehaviour.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-85636001718736834292014-09-10T03:49:09.791+12:002014-09-10T03:49:09.791+12:00In your red vs blue engine example, it might be mo...In your red vs blue engine example, it might be more correct to say 'uses too much fuel regardless of the efficiency with which it is converted to horsepower'. We should all be riding Mopeds, you know.Granite26noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-33466397363153034652014-09-09T23:45:59.837+12:002014-09-09T23:45:59.837+12:00Amazing. Could not be more wrong. Equity has nothi...Amazing. Could not be more wrong. Equity has nothing to do with market failure. Economists are famous for having little to say on equity.Jim Rosehttp://utopiayouarestandinginit.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-32224044277971723102014-09-09T15:53:18.680+12:002014-09-09T15:53:18.680+12:00I haven't evaluated the rest of the course. Th...I haven't evaluated the rest of the course. This part of it is value-destroying.<br /><br /><br />Consider too that a very badly taught high school econ curriculum can both mislead students AND put them off taking econ at Uni.Eric Cramptonhttp://offsettingbehaviour.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-90097798513394224362014-09-09T15:44:13.598+12:002014-09-09T15:44:13.598+12:00I'm not sure that the course on the whole is a...I'm not sure that the course on the whole is actually destroying value. If we accept that lack of economic thinking among voters makes democracy worse, then I'd expect that the net effect of the course is improved economic thinking and therefore added value.Lliam Munronoreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-68319053676480128452014-09-09T15:08:52.200+12:002014-09-09T15:08:52.200+12:00That "weeping" tag is there for a reason...That "weeping" tag is there for a reason.Eric Cramptonhttp://offsettingbehaviour.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-2830084253401570472.post-79945460019670768602014-09-09T14:47:06.128+12:002014-09-09T14:47:06.128+12:00You're kidding. I actually think I might cry.You're kidding. I actually think I might cry.fibbynoreply@blogger.com