Monday assorted links


At least, in Cuba, for now, "atruena la razón em marcha".

I don't get why a country gets credit for having good education outcomes if its citizens are poor anyway. What's the point if it doesn't lead to increased productivity? Maybe you say being educated allows you live a fuller life, but that's a subjective value judgment, not something that should go into a developmental index, which I gather tries to measure objective measures of well-being. It would be like counting "greater religiosity" as an accomplishment of a government. Some people think that there are benefits to religion, but simply increasing the piousness of a population isn't considered a great human development objective.

'Education is not preparing for life, but life itself', John Dewey

btw, the benefits of religion aren't increased piousness, but control of the citizenry.

Robert F Kennedy already answered this question:

6. "Immigrants were prevalently highly educated..."

High levels of education are a good predictor of high productivity; that applies to immigrants too. No surprise there. What most French object to is the low-education, low-productivity immigrants. For example the guy who crashed a truck into a crowd in Nice last July, killing 86 people: he was a basic delivery truck driver. In fact he had obtained a French residency permit long before his truck-driving license. I really don't understand why France grants entry to any unskilled immigrants (other than refugees), given its high unemployment rate amongst the unskilled.

Besides, the study doesn't show a causal link between immigrants and productivity; nor does it show that this productivity was good for the workers, rather than good for the owners of capital.

> Highly skilled natives were pushed towards firms that did not hire too many immigrants spreading positive productivity effects to those firms too.

Perhaps the arrival of immigrants makes the natives work harder, so that they can afford to move into better neighborhoods and away from the immigrants. Making everyone work harder might be good for the economy; and it's certainly very good for the owners of capital; but it's hardly what most people want in life.

Please sir. You are not supposed to notice those things.

Instead you should learn the prhase; an immigrant is an immigrant is an immigrant.

Explicitly mentioning something does not strike me as a highly effective method of hiding something.

"Perhaps the arrival of immigrants makes the natives work harder, so that they can afford to move into better neighborhoods and away from the immigrants. Making everyone work harder might be good for the economy (...)"
Higher taxes must be great for the economy, people must work harder to enjoy the lifestyle they grew accostumed to.

Do they count terror attacks as part of productivity? French jihadists are some of the most productive in the world.

#5: the author points to something interesting in the low infant mortality rate. High abortions rate makes the fertility rate go down. With fewer children to working adults ratio, "society" can provide for children more easily. But Cuba's total fertility rate has been below replacement since 35 years ago. Fewer children live well but human capital is disappearing. Who is going to sustain the old people in 20-30 years?

Re "Who is going to sustain the old people in 20-30 years?": Tourists.

More specifically, ala Thailand, sex tourists.

Is there a lot of money in that for old people?

Sometimes you're a bit too honest, Ray ;)

But seriously, Cuba has lower fertility rate than China.

If the country is allowed to open up and develop and things improve, the fertility rate might rise some. Countries under duress are rarely places where people want big families.

5) Interesting, but it states as fact the assumption of tradeoffs between growth and inequality, whereas in many cases it is quite clear that unequal distribution of economic resources is itself a major factor which SLOWS growth.

For an extreme sort of example, consider a dictator that skims most of the oil wealth and deposits the proceeds in a Swiss bank. The results inequality reflects a situation that, if fixed, would result in faster economic development as a direct result of fixing the cause of inequality.

A far more marginal, or less obvious example would be basically any situation where the wealthy hoard or waste economic resources (from the perspective of GDP growth) whereas redeploying financial and human resources dedicated to their luxiries in general towards health, education, infrastrucutre, etc., which makes economic development processes more profitable and therefore faster. (In the interest of freedom, most people do not prefer to extend this logic to absurdity.)

So, starting with the assumption that there are tradeoffs between inequality and growth is incorrect.

The example used in the article refers explicitly to redistribution directed towards consumption, and completely ignores a) that many forms of consumption contribute to future economic potential, and b) that many public expenditures funded by a progressive (or formal/informal segmented) tax system are redistributional in their sources and applications, but are geared towards economic production potential and not consumption for its own sake. For example, improving rural roads in an area where this implies better market access for farmers in their area, and paying for this using taxes raised from wealthier urban areas.

However, the basic logic that we should not excessively concern about rising inequality during periods of rapid growth should not be ignored. If one region or sector of the economy explodes, obviously the gains will accrue mostly to the people in that region or sector. So long as development processes are proceeding at a decent rate elsewhere, this shouldn't be too big of a problem. Which is a different situation from a third generation of impoverished peasants looking upon the mansion of a local despot who makes his money orchestrating a variety of monopolies, dodgy tax practices and/or abuse of public funds, etc.

Mr. Troll, Cuba has a fertility rate comparable to Germany. They had fewer children and in theory available resources should have boosted economic growth. Today, there is neither (enough) young people nor developed economy. By the fall in fertility, Cuba should have been an Asian tiger, should......

#6: "Immigrants were prevalently highly educated and this effect is consistent with a positive complementarity and spillover effects from their skills... We also find this effect to be significantly stronger for firms with low initial productivity and small size."

This seems to follow an increasingly growing body of literature documenting that a significant proportion of TFP improvements in the modern economy comes from workers spreading new skills and techniques to their co-workers. One of the lessons here is that California probably dominates the tech sector because of the near lack of enforceability of non-competes. Making this policy national would probably be one of the best things we could do to improve growth.

#3...Wisely, the Italian ballot will list the following three choices....Yes...No...Put off decision until the next referendum.

#5 makes a good argument about health in Cuba, claiming that their number of doctors is a misallocation of resources. That's all well and good, but could we use the same argument in the opposite direction for the US? The regulatory environment and the expense in training makes the US have a very low number of doctors per capita. Why don't we see pro-market economists argue that our specific set of distortions give us too few people practicing medicine, and too many people working on medical billing?

That seems clearly true. No one says that?

Er, don't we?

#5 Communist dictatorship. So the poor to middling stats must be far worse in reality.

There is no reliable evidence that Cuba is better than any Central American country.

There is virtually no overlap between the lists of the Guardian and the Telegraph. I only saw 2 - Swing Time & All that Man is. Might have been a couple more - I didn't create a spreadsheet or anything like that. It really makes you wonder what the word "best" means. Or we do live parallel lives.

#3: Are German bonds indexed for inflation? I ask because the linked article claims that the German bonds are used in repo deals, but cash is not. Since a bond is just a promise to pay cash at some point, what's special about the German bonds, especially in short term lending?

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