Various teaching links

1. Terrific piece on energy and externalities with quantification of external effects and global warming policy by Bill Nordhaus.

2. Can Italy really be this bad?  It just might be.

3. Can the World Feed 9 Billion People?  A great piece from Tim Taylor who sets out the Economist's view of this, quite contrary to Malthus.  Exercise: draw a supply and demand curve for food.  With nothing else changing, as the population grows, what would have to happen for food to "run out"?  What if anything saves the world from this outcome?  What does the behaviour of food prices suggest about the balance of forces in the world food market?

4. Steve Gibbons has a very good post on the right use of evidence to overcome suspicion, this time regarding the beneficial use of competition in the NHS. 

Various teaching links

1. Wise words on the need for increased captial requirements and whether they will stiffle growth from Howard Davies. 
2. Very nice case study of two-sided markets in the music industry and how record companies don't get it from Prospect magazine. In the lecture on demand we studied how demand might be affected by a network: in this case, demand for one good (in this case live music) is affected by demand for another good (in this case recorded music).
3. A really bad tax idea: taxing you as you get a suntan. This from Tim Taylor.

Various teaching links

1. The price is wrong.  We looked in class at how markets are unlikely to price energy externalities correctly.  Here's some work by Frontier emphasising that the price is indeed wrong.

2. Is there anyone better than John Lanchester on the financial crisis?  Here's a piece on the banks I particualrly like. :http://www.lrb.co.uk/v31/n10/john-lanchester/its-finished

3. Tim Talyor links to Brian Aurther on the new digital economy: http://conversableeconomist.blogspot.com/2011/10/vast-automatic-invisible-economy-w.html.

4. Essential reading on why the latest Eurozone resue plan will fail, from Wolfgang Munchau:  http://on.ft.com/nLyGlu

China's R&D, catching up

Here is OECD data on China's R&D over time, compared with other countries, showing a catch up to European levels (click on this picture to enlarge).  In the light of this can someone explain why the EU spends 45% of its budget on farming subsidies? The link to the document describing the is here and the data are here. 

 

Update.  I see the is sponsoring a large innovation confernce, h.  Would be great if they diverted some money towards the innovators...

Is the middle being squeezed in the UK?

Tyler Cowan has got a lot of traction from his penetrating observation that real median household wages in the US have hardly grown for almost 30 years (top wages have of course). The great Russ Roberts blogs  on a TUC report about median wages in the UK, which shows a 57% improvement in the male full time median real wage over the last 30 years.

One thing that really matters is comparing males, females, households etc. This is done by the Resolution Foundation "Growth Without Gain".  Here's the US data showing the stagnation, lower line clearly:
 

and here is the UK data:.




What do we see from this?  I don't know the answer but

1. It's remakable how well women are doing in both countries (BTW, 40% of our starting MBA students this year are women).  
2. There are some signs of (male) stagnation in the UK in recent years.  But not what we have seen in the US. And not for women.
3. These does seem, in the UK, like in the US to have been a decoupling from GDP growth perhaps in recent years.  These are median wages and one has to be careful with deflators etc. but that should show up in reduced share of labour compensation in GDP. The data on this are set out below:

Here, from EUKLMS are the UK and US labour shares of total GDP


Source: EUKLEMS data


The US labour share has been falling steadily, the UK falling only perhaps in the latest years.  So what we really need, for the most recent years, is an explanation of how returns to capital are rising, and returns to women and superstar labour is rising.  I am working on this with Lawrence, Slaughter and Leamer, work out soon.