The single most important fact about the UK economy is that its productivity—and by extension its real wages—has remained almost flat since 2008. The chart plots real wages in four countries before and after the financial crisis. Germany, once derided as Europe's "sick man," saw wages stagnate in the early 2000s but recover steadily after … Continue reading Whatever Happened to UK Productivity?
The Price of War
This November I attended a symposium organized by the Czech CERGE-EI foundation at Westminster. The topic: "The Price of War." I don’t know what good fortune got me invited. But the prospect of hearing David Petraeus speak—the US General who pacified Iraq—drew me in. The price of war is immense. Which is why investments in … Continue reading The Price of War
Other Kingdoms
Global fertility rates are low. Why? This post looks beyond socio-economic determinants and examines the role of faith as a fundamental factor.
In Search of Economics: Reflections from LSE’s “Perspectives on Economic Theory” Conference
My task to give a faithful account of the conference is doomed from the start. “Rani Spiegler’s talk was the best” tells me the LSE grad student who I bump into on the way out. Alas, Rani’s was the first talk of the day, and I missed it. I know of his book, of course. … Continue reading In Search of Economics: Reflections from LSE’s “Perspectives on Economic Theory” Conference
Walras’ Road to Objectivity
Offering advice on which are the public’s most fortuitous gambles is a key responsibility for applied economists. But which economist should the public listen to? Revealing individual prediction records could go a long way to tell muddled and realistic thinkers apart.
The third child
To raise fertility, the intensive margin—average family size—matters most. Families respond to lived experiences, and excluding mothers from adult life creates a hold-up. To reverse the decline in births, mothers' happiness is imperative. This requires genuine, not just rhetorical, inclusivity.
Buying Sunglasses in Brazil (or how to restore commitment in bargaining)
The last time our family went to Brazil, our little ones arrived poorly prepared. We did not bring any sunglasses. Why would we? London’s winter sky rarely requires them. Brazil? That’s a different story. Upon our first five-minute walk between the luxurious apartment blocks, we were struck by the brightest of sunlight. Instead of buying … Continue reading Buying Sunglasses in Brazil (or how to restore commitment in bargaining)
Taxing Private Education
In the wizarding world, the UK’s most famous school—Hogwarts—is a state school that charges no tuition and is open to all capable of witchcraft. Despite its open-door policy, Hogwarts boasts an alumni list brimming with accomplished wizards and witches, many of whom have gone on to write the very textbooks used in the Harry Potter … Continue reading Taxing Private Education
The Chainstore Paradox and State-Sanctioned Murder: Game Theory in International Relations
Game theory students will remember Selten’s chainstore paradox. An incumbent chainstore with huge profit margins seeks to fend off a potential entrant. This is a sequential move game. In the first stage, an entrant decides whether to contest a market and enter. In the second stage, the incumbent chainstore decides whether to accommodate entry and … Continue reading The Chainstore Paradox and State-Sanctioned Murder: Game Theory in International Relations
Washing the Dishes in China and Coase’s Theory of the Firm
Just before I left for China earlier this month, the Englishman whom I told about the adventure quipped that nowadays “Britain is more socialist than China.” Be that as it may, as a theorist I'm trained to understand cause and effect, not judge the big picture. One thing I learnt: there are many markets in … Continue reading Washing the Dishes in China and Coase’s Theory of the Firm