91Èȱ¬

So, why, if the NHS is all heavily in debt can the government not just print more money and send it to the hospitals?

I accept that if everyone knew, the value would reduce, so they could just not say anything.

Vikki Pollard can write?

Wow, you learn something new every day

So just how scared of the free market should we be?

If there were no trade barriers and no protectionist policies, would we really disappear under a chinese textile mountain and see an end to European food production? Or would our pre-existing infrastructure, education and capital wealth always keep us ahead?

Dear Nick,

If the government Taxes you adn me in order to pay the wages of doctors and nurses. As a result I have less money (and spend less) while the doctors and nurses have more (and spend more). If the Gov were to give Doc and Nurses money without nicking any of mine then I would spend the same as befour but the medical prfesionals would spend. Ergo more money spent on the same amount of goods = Inflation.

For doctors and nurses read also creditors, drug company share holders etc.

I suggest the market for Footballers is not efficient because many of the ‘value’ factors a manager / chairman may consider are not directly related to his ability to play football today. For example, he may be a ‘brand’ and so able to generate income for the club but, on the pitch, he may be ‘past his best’ for whatever reason.

A manager / chairman may also ask themselves :
- do I need another striker / defender …. at the moment
- does he play in a style that complements the team at the moment
- does he have the right temperament
- where is he in his career at the moment ie beginning (=lots of ‘potential’) or end
- what, if any, emotional / loyalty ties does the footballer have for the club
- what annual salary will be paid
- how much will the footballer add to the club’s income from gate monies, advertising and club shop sales
- is he a saleable ‘brand’

Of course the world needs another blog.

The very best thing about blogs is that they create what appears to me to be an "efficient" market in information and opinion.

Notwithstanding the quirky views of some people, by and large blogs with worthwhile content rise to the surface and become generally well read and well liked, where those with poorer or less well liked content sink like a stone into the depths of internet obscurity.

All blogs are by their nature free to access however one can assess their value by the number of contributors/contributions and the number of links that bring you to them.

Keep it up. "love your work" as they say.

I love the idea of an Economics blog and I'm sure that you're a person well-suited to writing it. I'm teaching Economics in an international school now, but I remember when I was in the UK that you managed to explain the Economics news clearly and as simply as possible. In fact, for the International Baccalaureate, students have to do some of your job - find a news story and explain the theories behind it.

It would be great if you could use this to pull out some of the interesting ideas in the many journals which have something interesting to say and explained more simply. I don't think we really need homework set about the wages of footballers - if we're interested enough to log on, we probably have thought that one through already. Otherwise, look forward to reading more.

I stopped reading when you mentioned Vicky Pollard. Not for me, I'm afraid.

Unless they are identical copies of one another, more blogs represent more views out there in the public domain.

Tim Harford, John Kay and Will Hutton have in the past few years all written of the importance of pluralism - the free and frank exchange of things, some of which will fail and some of which will prosper - in economics. Thus in free market terms more blogs are an unqualified Good Thing: 20 seconds discovering what someone else is interested in is not, I'd say, 20 seconds wasted even if that something doesn't reflect our own interests. And there's always the chance that other people's blogs won't be unbearably dull to brighten up our day.

Might I suggest some future ponderings on the economics of customer service? I estimate that last year I spent around 100 hours complaining about things, and in return received around £400 of refunds and, 'apologies'. Not a great return on my investments (especialy if you consider I have a legal right to some of these refunds that I've spent hours arguing for). But what good does it do me in terms of making companies provide better service to me in the future. Does it make sense for companies to even provide good customer service when they can just pay off the few people who bother to complain?

I see what you mean about the bibliophile site.

Mr Davies,

the appearance of your great blog is most timely. I teach A Level economics and have just launched with my Year 13 a challenge entitled 'The Evan Davies Cup'. I see you as a source of inspiration / motivation in the great reports you complie for the 91Èȱ¬....you make economics really simple and often difficult concepts easy to understand.
So my students have to play the role of an Economics Correspondent and produce a 2/3 minute report on DVD on a European topic in the style of Evan Davies!!
If successful will invite parents in.
Hope you don't mind. If you supply me with an e-mail address I will attach the presentation I gave them.
Your
Tim Procter

Unfortunately, I must disagree.

A visit to the wine regions of California, where I could do tastings in the wineries, themselves, showed me that:

1. Varietals that are excellent, and others that are not, can be found in the same winery, and at the same price points.

2. Some of the better wines are not available in the market, outside the wineries, and some of those can be fairly modest in price. They simply are not produced in sufficient amounts for general sales outside the winery.

Once I discovered this to be true, I did pay more attention to doing tastings, and to what wine varietals certain wineries seemed to have a knack for, at a good price.

I now enjoy wine much more, and pay less......because I have found that price.....truly is not an indicator of quality.

I find the same to hold true for other wine producing regions in other countries, as well.

Dear Evan

I've always enjoyed your analysis of topical issues and a fan of Dragon's Den. I'm a PhD student in Economic Psychology and focusing on the nature of windows of opportunity. I am interested to move into public policy (especially in economic devt) and thought I'd seek the advice of someone who has clearly leveraged his expertise well. Prior to the PhD I have a background in finance and law and worked in development. If you do find a few minutes, I would appreciate any input/ leads.

Thank you.
wilson

I took the trouble to read the blog by the booksorter, and wasn't a bit surprised to learn that he had a huge collection of "cooking for one" books.

Any chance you will write about the vast deficiencies of economics as any kind of real science?

Hello. I caught a bit of a trail about a programme you are making called (I think) 'the price of housing' which looks at more than just house prices. I can't find any reference to this on your webpages, so would be most grateful if you could post when and where it will be broadcast.
A refugee from the world of business, I now teach Econ and Biz at GCSE and A level, and this looks very useful. As all the kids have MP3s and love playing with the things it could even (if downloadable) be a whole new homework experience. Many thanks.

As much as a blog by Mr Davies is welcome in demystifying Economics to the layperson I think the blog should have a more substantive purpose and that is for Mr Davies to use his position and profile to expose the practice of rent-seeking ie the activity of one group in society gaining at the expense of another - which is far from efficient and is unsustainable. Mr Davies' competitor Liam Halligan (?) in C4 has started to do this with a useful piece on NHS on Dispatches although this did not go far enough. Evanomics may be jumping on the Freakonomics bandwagon but at least the latter did attempt to courageously expose conventional myths. Mr Davies the challenge is yours (Economists should welcome competition) should you wish to accept it or will you play it safe and stick to comfort topics like property etc.

Evan
I was interested in your Gordon Brown retropsective and why you didn't mention his looting of pension funds. Although stock market drops of 2-3 years ago, contributed in a major way to the pensions crisis, the treasury 'take; in cancelling dividend tax credits, appears to be about half of the hole in occupational pensions. He has got away with this, as for some reason, you and just about every other financial reporter have not held him to account. Your thoughts please
Best regards Martin

I agree with what Torchwolf wrote on 24 Feb.

Thank you for making such matters easier for someone like me to understand!

Evan - so much of the manufacturing of the west has moved to China – the reason is lower costs, this is often taken to mean lower labour costs. But since most production is automated; cars and high-tech goods are produced by robots etc, then labour costs are only a small proportion of total costs.

What is the real reason for the move to China ? Business will say the lack of bureaucracy, red tape.

Perhaps the real reason is taxes. Western companies have moved production off-shore so they pay very little tax. Is this the real incentive ?

Can you put a search function for the blog? It would be useful to search this blog only (rather than having to search the whole of the 91Èȱ¬s online sources)?

What would be the inflationary impact of the various proposed uses of "unclaimed assets"?

By this I mean, those bank accounts and other investments that are sitting on institutions books, where they can't trace the owners.

Politicians all seem to have their own plans for this "free" money, that won't cost the tax payer, eg "good causes" or bailing-out failed pension schemes.

However, surely this is money that is effectively out of circulation that is being brought back into circulation and starting to chase goods again? This is like the BoE just printing extra cash, "helicopter money" as the textbooks would call it. Since the money does not result from any new production, it effectively just drives up medium-term prices.

Therefore there is no direct cost to the tax payer, but there is a cost to everyone indirectly. There is no free lunch.

I'm not sure, however, how big this issue is in the scale of things. The unclaimed assets may be a small fraction of the money supply.

This might be a worthy topic of a blog in itself. What do you think?

Evanomics is essential. The only time I listen to anything to do with economics/business is when Mr Davis is on. And I was craving for more. Mr Davies simplifies my favourite topic that was made complicated.

Mr. Davis,

I just want to thank you for instructional piece of writings on your blog regarding private equity, specially for keeping it simple and understandable. You should quit your job at 91Èȱ¬ and start teaching.

Serhat SENEL
Ph.D Candidate in Public Administration,
Auburun University, USA.

Hello Evan,
Not so much a comment, more of a query (hope that's OK!) regarding the recent flooding in the UK: even though it has caused significant losses and damage to property, is it true that the overall effect of the huge remedial activity is to increase economic growth?
Thanks,
Richard

hello Evan,
I hope you don't mind me asking an economics question. I have always been puzzled by the arguments against a single Euro interest rate and why it cannot apply across the whole euro zone. Perhaps you can explain in your blog.
In any currency area there will always be some winners and losers from the interest rate – perhaps Northumbrian sheep farmers don’t prosper from a rate which benefits London property developers? This would be exaggerated in a bigger currency area like the Euro but it seems to work for other large currency areas. Take the US; the same dollar rate is set for pineapple pickers in Hawaii, oil workers in Alaska, school teachers in Chicago, and retired opticians in Florida. What mechanisms allow such a range of people to be happy with the one size fits all dollar interest rates and why could those same mechanisms not work in Europe? Yes there is easier movement of people within the US due to a single language but there are variations in state taxes. I’m not convinced that someone would decide to retire to Nebraska instead of Florida because of a fraction of a percentage point difference in local inflation and I believe that the US can experience local booms/busts like the Massachusetts property bubble.
If it is the variation in language and culture that is the impediment to the movement of people needed to make the interest rates work then is it the case that a country like India with a population of 1 Billion and 30 major languages and numerous ethnic and religious groups will not be able to maintain a single currency? Would it make economic sense for it to split into 10 smaller countries?
I’m sure I must be missing something. Can you shed any light?

Hi Evan,

I wonder if you might comment on the current credit crunch problem in an upcoming blog? I must admit, I'm a little confused.

Firstly the market seems to have the jitters as it can't quantify the extent of the problem. I wonder why not? Is it not possible to look at number of housing transactions over last 3 years x average value x average borrowing x probabilty of default?

Secondly, how does the various central banks pumping in money help the situation? And how does this affect me if I am a saver not a borrower?

Cheers,

Iain

Something for Evan to think about?

he 91Èȱ¬ have this article based on nformation from the JCQ:

What they are saying is the equivalent of "House prices in Knightsbridge show bigger gains than prices in Toxteth", which is obvious since the starting point is the different. The growth rates are approximately equal (my recollection is that private schools go from 42% to 48%, i.e. a rate of (48-42)/42= 1/7, comprehensives go from 16-19 i.e. 3/16 = 1/5.3) i.e. the growth rate of the comprehensives is BETTER than the independent schools.

This may seem a bit like black arts, but the theory comes from epidemic or economic models, and I would suggest the growth in grade A's should be as in the logistic function (https://en.wikipedia.org/wiki/Logistic_function#The_Verhulst_equation) since the system eventually saturates when everyone gets an A, as you approach saturation it becomes harder to get the weak students to the required grade. The Verhulst equation suggests that the growth rate around 40-50% saturation should be more than 3 times the rate than at 15-20% saturation. Which is even worse for the independent sector!!!

I think the exam boards where trying to make the point that A-levels aren't getting easier - in a perverse manner. My understanding is that A-levels are now designed as a static benchmark, rather than an indication of the top 5%, 25% .. etc. Therefore it would be a disaster if more people didn't hit the mark.

What annoyed me was the independent sector used the results to suggest they were a lot better than the comprehensives (using the JCQ data for their marketing purposes), but in fact the data suggests that they are not improving as well as comprehensives.

The U.S.subprime mortgage problem - never mind the C.D.O's, carry funds, and various foggy layers - as these are secured loans who holds the property titles? - anyone help?

Your TV reports are so superbly lucid - only the finest teachers achieve this! Keep up the brilliant work. If ever you teach 'Introduction to Economics' let me know.

Has the euro just reached (15:10, 21 Dec 2007) a new high against the pound, as it currently stands 0.72547 pounds per euro?

Should Sir Michael Rose return his knighthood with a polite thank you note?
If a school recorded a 2% drop in results over one term, would 20% of the parents immediately withdraw their children.
Supermarkets/money markets is there a difference for those who own them?
One thing is fairly sure if they were as dangerous as some NHS hospitals, they would only have to be responsible for the death of one customer to find themselves in deep trouble.

Bank of England announcement 10th Jan.

Foreign currencies reacted predictably to the interest rate news today.

Unfortunately the reaction occurred on the stroke of 11.00am an hour before the announcement was released.

Does someone at the Bank need a new watch or has a foul been committed.

I am a keen skier and a keen photographer and have practised both since 1960s. Why is it that I as a consumer am now being forced by manufacturers to use short carving skis rather than the older long skis and (increasingly) digital cameras rather than film cameras? I am increasingly being deprived of choice as a consumer in these areas. Which other areas of life will be similarly affected in due course? I would value your comments. Which area of economic theory applies to this issue?