The dodgy dynamics of economics (1)

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This is the talk I gave at the Finance, Math­e­mat­ics and Phi­los­o­phy sem­i­nar orga­nized by the Depart­ment of Phi­los­o­phy and the Depart­ment of Physics at Sapienza Uni­ver­sita de Roma. It was an extremely good con­fer­ence, with the spe­cial bonus that I got to meet one of my heroes in non­lin­ear dynam­ics, Ping Chen.

PS Video below init­lally linked only to the adver­tise­ment before my video. That is fixed now, and I only hope my bags also get found after going astray in Rome airport.

I’ll fol­low up with my paper shortly, once I have time to com­plete it.

3 heterodox-friendly positions at Kingston University

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Kingston Uni­ver­sity has adver­tised three fixed-term lec­turer posi­tions with a very tight dead­lline of June 22nd, with inter­views to be held on July 1st. Appli­ca­tions from econ­o­mists with a research area in het­ero­dox eco­nom­ics are welcome.

For queries please con­tact Julian Wells (J.Wells AT, who is the Direc­tor of Studies.

The for­mal details of the posi­tions are below.

Ref­er­ence Num­ber: 1264

Salary: £35770-£38869

Fac­ulty / Depart­ment: Fac­ulty of Arts & Social Sciences

School / Sec­tion: School of Eco­nom­ics, His­tory and Politics

Loca­tion: Pen­rhyn Road Map & Directions

Permanent/Fixed Term: Fixed Term (FTC)

Full Time/Part Time: Full Time

Genius versus bricks-and-mortar in the head

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Aus­tralia could have been the world leader in lap­top com­put­ers — if we didn’t have a brain-dead finan­cial sector.

Han­nah Fran­cis’ arti­cle last week about the Vix­tel Unity – a new Australian-designed multi-function Tablet/Laptop/Phone (The three-in-one Aussie device that could kill the PC) — seri­ously stopped me in my tracks when I saw that its devel­oper was Terry Crews. For that rea­son alone, I popped over to the Indiegogo site where Vix­tel is run­ning a crowd-funding cam­paign and chipped in $645 towards its $100,000 goal — for which I’ll receive one of the first pro­duc­tion run tablets that will be avail­able in July (about 4 to 6 weeks from now).

Why industrial strength is born from diversity

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Diver­sity — not spe­cial­i­sa­tion — is the advantage.

When I was invited to speak at a con­fer­ence in Bonn some years ago, my host insisted that I stay with him, rather than in the con­fer­ence accom­mo­da­tion. I expected to find myself in a sub­urb of Bonn, but instead we drove to a tiny vil­lage with just 5,000 inhab­i­tants 130km away.

The bonus was that this was July 4, on which date each year a local Phil­har­monic group put on an open-air con­cert on the banks of an nearby extinct volcano’s caldera lake. The whole town was there for the event, and my host intro­duced me to a lovely old cou­ple sit­ting on a park bench.

Why Clive Palmer speaks budget sense

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It was an inter­est­ing expe­ri­ence to be part of the bud­get lock-up last week, but as I warned in my arti­cle, I could make mis­takes under that time pres­sure — and I did. I’ll cor­rect them below, but I want to open with a dec­la­ra­tion that I never expected to make: that the best sense I heard spo­ken about the bud­get was uttered by nei­ther Lib­eral nor Labor nor Green, but by Clive Palmer.

Applying some MMT arithmetic to Australia’s budget

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NOTE: I made an error in my arith­metic in this post which I’m fix­ing up after too lit­tle sleep last night thanks to the post-Budget lockup drinks: the basic logic is OK but the num­bers are wrong. I’ll link nonethe­less and amend the num­bers tomorrow.

Will the Lib­eral Party’s his­toric eco­nomic for­tune hold for this bud­get? Bal­anc­ing Joe Hockey’s books would seem to require Aus­tralian pri­vate sec­tor debt around 250 per cent of GDP by 2025…

Taking stock of Wall Street’s boom (1)

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If the US econ­omy was per­form­ing as well as the US stock­mar­ket, even Wal­mart work­ers would be break­ing out the champagne.

Since 2009, the S&P has risen over 250 per cent in nom­i­nal terms, and almost 230 per cent in infla­tion adjusted terms. In nom­i­nal fig­ures, it is at its high­est value ever, though when you adjust for infla­tion, it is still 10 per cent below its peak in 2000 (see Fig­ure 1).

The $64 ques­tion is: will it keep on going up?

Fig­ure 1: The S&P 500 before and after infla­tion
Graph for Taking stock of Wall Street's boom

For a pluralist education, come to Kingston

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I have just accepted an offer to become Head of the School of Eco­nom­ics, His­tory and Pol­i­tics at Kingston Uni­ver­sity in Lon­don. I will take up the appoint­ment in time for the Autumn term, which starts on Sep­tem­ber 23rd.

Kingston will respond pos­i­tively to calls from stu­dents for gen­uine reform of eco­nom­ics education—like those made by the Post-Crash Eco­nom­ics Soci­ety in Man­ches­ter, and the Inter­na­tional Stu­dent Ini­tia­tive for Plu­ral­ism in Eco­nom­ics (which was launched only days ago).

These stu­dent calls for gen­uine reform are timely, because though there are some ini­tia­tives for reform, aca­d­e­mic eco­nom­ics has, if any­thing, become more hos­tile to crit­i­cism of the main­stream and to pre­sen­ta­tion of alter­na­tive per­spec­tives than it was before the crisis.

The students are revolting

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And good on them for it! Aca­d­e­mic econ­o­mists are ignor­ing or min­i­miz­ing the need for change, just as they did 40 years ago when I was one of the revolt­ing stu­dents. So stu­dents are tak­ing their demands to hear other sto­ries read from other than the Neo­clas­si­cal song­book to the streets–and the web and newspapers.

Today 42 dif­fer­ent stu­dent groups around the world have launched the “Inter­na­tional Stu­dent Ini­tia­tive for Plu­ral­ism in Eco­nom­ics”. They have penned an Open Let­ter on the need for plu­ral­ism, which will be pub­lished in a num­ber of news­pa­pers today–May 5th 2014. The open­ing para­graph of the let­ter is (with two points high­lighted in italics):

Should governments run permanent surpluses? (2)

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Last week I showed that Australia’s net gov­ern­ment debt to GDP ratio is noth­ing to panic about when com­pared to the rest of the world. We’re cur­rently at under 12 per cent, whereas most OECD nations have ratios of 50 per cent and above.

But maybe that’s one rea­son Australia’s econ­omy is rel­a­tively strong.

I also showed that most coun­tries aren’t like busi­nesses in that most coun­tries have a net neg­a­tive equity posi­tion — their lia­bil­i­ties exceed their assets — which is a sit­u­a­tion that would have most com­pa­nies on their way to being declared bankrupt.