Sunday, February 27, 2011
Saturday, February 26, 2011
more dani
"Those who advocate greater global governance warn us that, without tighter international economic rules, a free-for-all will leave all countries worse off. "
"..it is a mistake to imagine the world economy as if it were like, say, global climate – with its health and stability ultimately depending on the pursuit of universal instead of parochial objectives."
------------------------
dani at his habitual annoying middle path ism :
"If the government is too heavy-handed, it kills private entrepreneurship."
on the other hand
" If it is too standoffish, markets keep doing what they know how to do best,
confining the country to its specialisation in traditional, low-productivity products"
but the upshot of that other hand
the stand offish hand
is keenly shaped
------
related finding
http://rodrik.typepad.com/dani_rodriks_weblog/2010/09/growth-reducing-structural-change.html
Here is a chart that provides a key insight on why Latin America has done worse than Asia since 1990. The chart decomposes labor productivity growth in the two regions into three components: (i) a “within” component that is the weighted average of labor productivity growth in each sector of the economy; (ii) a “between” component that captures economy-wide gains (or losses) from the reallocation of labor between sectors with differing levels of labor productivity; and (iii) a “cross” component that measures the gains (or losses) from the reallocation of labor to sectors with above-average (below-average) productivity growth.
(The countries identified by “HI” are the high-income countries.)
Note first that Latin America does better than Asia in terms of the “within” component (the blue bars). The representative Latin America country has experienced faster productivity growth in its individual economic sectors than the representative Asian economy. (China is not included in this data set.)
Why then did Latin America do so much worse overall? Because the reallocation terms have contributed negatively to overall economic growth. Note in particular the hugely negative “cross” term for Latin America (the green bar). In Latin America, labor has moved from sectors with high productivity growth to sectors with low (or negative) productivity growth, offsetting to a large extent the large “within” effect and the much smaller (but still positive) “between” effect.
Here is what’s behind the large and negative cross effect. The scatter plot below shows the correlation for Latin America between the change in a sector’s employment share and the sector’s labor productivity growth.
The main message of the scatter plot can be summarized easily. Labor has moved from tradable sectors (agriculture and manufacturing) where labor productivity growth has been rapid to non-tradables, especially wholesale and retail trade, where productivity growth has been negative.
Put differently, the mechanism through which tradables have achieved significant productivity growth in Latin America (remember the large “within” terms noted above) has been to lay off workers. Such “rationalization” is OK from a partial-equilibrium perspective, but doesn’t look great when the displaced labor moves to sectors with worse performance.
As the first chart shows, Asia (where manufacturing has expanded rather than shrunk) has largely avoided this problem, and has ended up with superior overall performance.
Want to help me write my paper? Provide some hypotheses as to why the structural change patterns in the two continents have been so different."
"..it is a mistake to imagine the world economy as if it were like, say, global climate – with its health and stability ultimately depending on the pursuit of universal instead of parochial objectives."
------------------------
dani at his habitual annoying middle path ism :
"If the government is too heavy-handed, it kills private entrepreneurship."
on the other hand
" If it is too standoffish, markets keep doing what they know how to do best,
confining the country to its specialisation in traditional, low-productivity products"
but the upshot of that other hand
the stand offish hand
is keenly shaped
------
related finding
http://rodrik.typepad.com/dani_rodriks_weblog/2010/09/growth-reducing-structural-change.html
Here is a chart that provides a key insight on why Latin America has done worse than Asia since 1990. The chart decomposes labor productivity growth in the two regions into three components: (i) a “within” component that is the weighted average of labor productivity growth in each sector of the economy; (ii) a “between” component that captures economy-wide gains (or losses) from the reallocation of labor between sectors with differing levels of labor productivity; and (iii) a “cross” component that measures the gains (or losses) from the reallocation of labor to sectors with above-average (below-average) productivity growth.
(The countries identified by “HI” are the high-income countries.)
Note first that Latin America does better than Asia in terms of the “within” component (the blue bars). The representative Latin America country has experienced faster productivity growth in its individual economic sectors than the representative Asian economy. (China is not included in this data set.)
Why then did Latin America do so much worse overall? Because the reallocation terms have contributed negatively to overall economic growth. Note in particular the hugely negative “cross” term for Latin America (the green bar). In Latin America, labor has moved from sectors with high productivity growth to sectors with low (or negative) productivity growth, offsetting to a large extent the large “within” effect and the much smaller (but still positive) “between” effect.
Here is what’s behind the large and negative cross effect. The scatter plot below shows the correlation for Latin America between the change in a sector’s employment share and the sector’s labor productivity growth.
The main message of the scatter plot can be summarized easily. Labor has moved from tradable sectors (agriculture and manufacturing) where labor productivity growth has been rapid to non-tradables, especially wholesale and retail trade, where productivity growth has been negative.
Put differently, the mechanism through which tradables have achieved significant productivity growth in Latin America (remember the large “within” terms noted above) has been to lay off workers. Such “rationalization” is OK from a partial-equilibrium perspective, but doesn’t look great when the displaced labor moves to sectors with worse performance.
As the first chart shows, Asia (where manufacturing has expanded rather than shrunk) has largely avoided this problem, and has ended up with superior overall performance.
Want to help me write my paper? Provide some hypotheses as to why the structural change patterns in the two continents have been so different."
dani on development
"every country that has been successful has managed to leverage globalisation with a domestic strategy.
It’s always been a combination of a solid domestic growth strategy alongside the forces of globalisation.
It is a careful, managed kind of globalisation that has worked.
The countries that have simply opened themselves up to world trade and finance without a complementary growth strategy at home haven’t done that well "
---------------
free range trans border corporations want free fire zones in emerging regions
vide
romers neo hanseatic fantasy
so its eclectic social liberal/social democrat dani R
versus
the flying fleet of trans nats
a very uneven combat
and then dani
lets the PRC shine
"...without globalisation China wouldn’t have been able to grow as rapidly as it did.
But China is not a simple story of letting globalisation work its magic.
They, in fact, have opened up very gradually, very carefully and always after having established strengths in their domestic economy.
It was on the basis of their domestic industrialisation that they progressively opened up to international trade and when they opened up to trade it was very partial too.
It wasn’t ‘Let all the tariffs come down!’ It was through special economic zones, so only in parts of the country.
They protected their state-owned enterprises so there wouldn’t be large-scale unemployment.
They made sure foreign investors would transfer technology to their domestic counterparts.
They entered the WTO relatively late, only after they had already become a manufacturing powerhouse.
With respect to international finance, to this day they have capital controls, they prevent free inflow of capital and they’re intervening heavily to make sure that they have a very competitive currency – which effectively subsidises their exports and their manufacturing industry.
So China has had a combination of highly interventionist domestic policies to diversify and develop its industries alongside a policy of export-orientation and taking advantage of globalisation.
This combination has been key.
Other countries that have tried to take advantage of globalisation simply by lowering their barriers to trade and letting their capital flow freely such as the Latin American countries since the 1990s have actually done relatively poorly. "
but dani
might not democracy ie bourgeois liberal systems of democracy
PREVENT the han strategy ???
if trans nats can lever in the pluralistic open society state system
to "run and regulate"
an emerging national markeyt system
whither industrial policy ??
whither " credit/capital" management ???
It’s always been a combination of a solid domestic growth strategy alongside the forces of globalisation.
It is a careful, managed kind of globalisation that has worked.
The countries that have simply opened themselves up to world trade and finance without a complementary growth strategy at home haven’t done that well "
---------------
free range trans border corporations want free fire zones in emerging regions
vide
romers neo hanseatic fantasy
so its eclectic social liberal/social democrat dani R
versus
the flying fleet of trans nats
a very uneven combat
and then dani
lets the PRC shine
"...without globalisation China wouldn’t have been able to grow as rapidly as it did.
But China is not a simple story of letting globalisation work its magic.
They, in fact, have opened up very gradually, very carefully and always after having established strengths in their domestic economy.
It was on the basis of their domestic industrialisation that they progressively opened up to international trade and when they opened up to trade it was very partial too.
It wasn’t ‘Let all the tariffs come down!’ It was through special economic zones, so only in parts of the country.
They protected their state-owned enterprises so there wouldn’t be large-scale unemployment.
They made sure foreign investors would transfer technology to their domestic counterparts.
They entered the WTO relatively late, only after they had already become a manufacturing powerhouse.
With respect to international finance, to this day they have capital controls, they prevent free inflow of capital and they’re intervening heavily to make sure that they have a very competitive currency – which effectively subsidises their exports and their manufacturing industry.
So China has had a combination of highly interventionist domestic policies to diversify and develop its industries alongside a policy of export-orientation and taking advantage of globalisation.
This combination has been key.
Other countries that have tried to take advantage of globalisation simply by lowering their barriers to trade and letting their capital flow freely such as the Latin American countries since the 1990s have actually done relatively poorly. "
but dani
might not democracy ie bourgeois liberal systems of democracy
PREVENT the han strategy ???
if trans nats can lever in the pluralistic open society state system
to "run and regulate"
an emerging national markeyt system
whither industrial policy ??
whither " credit/capital" management ???
dani's 7
http://www.project-syndicate.org/commentary/rodrik52/English
dani is the ever gay eclectic
"...pretty much everybody understands that there really is no alternative to market-based systems. But that still leaves huge room for argument about the type of market system. If you look at the national economies of different countries, they have very different kinds of market-based systems. The US economy is very different from the Swedish economy, which in turn is very different from the French economy, which in turn is very different from the Japanese one. And all of them are very different from the kind of market economy China is."
one wonders why he has so much faith in institutional variations
without a theory of the limits to institutional impact on any market based production system
ie
how much difference is a difference
at any rate... regadrez :
" global markets are fundamentally hostile to heterogeneity on these questions, so what economic globalisation tends to do is push for uniformity, to push for similarity in standards and regulations. It is not entirely clear that this is desirable either politically or economically.... "
i think the following requires proof as well
"... (uniformity ) ..is certainly not inevitable in any way "
why ??
"...it’s up to governments and policy-makers to decide to what extent they want to go down that route "
ah... but can national gubmints survive long ...if they defy global corporate dictates ???
is this pipe dreaming ???in that light dani's 7 "pipe dreams ".......
1. Markets must be deeply embedded in systems of governance. The idea that markets are self-regulating received a mortal blow in the recent financial crisis and should be buried once and for all. Markets require other social institutions to support them. They rely on courts, legal frameworks, and regulators to set and enforce rules. They depend on the stabilizing functions that central banks and countercyclical fiscal policy provide. They need the political buy-in that redistributive taxation, safety nets, and social insurance help generate. And all of this is true of global markets as well.
2. For the foreseeable future, democratic governance is likely to be organized largely within national political communities. The nation state lives, if not entirely well, and remains essentially the only game in town. The quest for global governance is a fool’s errand. National governments are unlikely to cede significant control to transnational institutions, and harmonizing rules would not benefit societies with diverse needs and preferences. The European Union may be the sole exception to this axiom, though its current crisis tends to prove the point.
Too often we waste international cooperation on overly ambitious goals, ultimately producing weak results that are the lowest common denominator among major states. When international cooperation does “succeed,” it spawns rules that are either toothless or reflect the preferences of only the more powerful states. The Basle rules on capital requirements and the World Trade Organization’s rules on subsidies, intellectual property, and investment measures typify this kind of overreaching. We can enhance the efficiency and legitimacy of globalization by supporting rather than crippling democratic procedures at home.
3. Pluralist prosperity. Acknowledging that the core institutional infrastructure of the global economy must be built at the national level frees countries to develop the institutions that suit them best. The United States, Europe, and Japan have produced comparable amounts of wealth over the long term. Yet their labor markets, corporate governance, antitrust rules, social protection, and financial systems differ considerably, with a succession of these “models” – a different one each decade – anointed the great success to be emulated.
The most successful societies of the future will leave room for experimentation and allow for further evolution of institutions. A global economy that recognizes the need for and value of institutional diversity would foster rather than stifle such experimentation and evolution.
4. Countries have the right to protect their own regulations and institutions. The previous principles may seem innocuous. But they carry powerful implications that clash with the received wisdom of globalization’s advocates. One such implication is the right of individual countries to safeguard their domestic institutional choices. Recognition of institutional diversity would be meaningless if countries did not have the instruments available to shape and maintain – in a word, “protect” – their own institutions.
We should therefore accept that countries may uphold national rules – tax policies, financial regulations, labor standards, or consumer health and safety rules – and may do so by raising barriers at the border if necessary, when trade demonstrably threatens domestic practices enjoying broad popular support. If globalization’s boosters are right, the clamor for protection will fail for lack of evidence or support. If wrong, there will be a safety valve in place to ensure that contending values – the benefits of open economies versus the gains from upholding domestic regulations – both receive a proper hearing in public debates.
5. Countries have no right to impose their institutions on others. Using restrictions on cross-border trade or finance to uphold values and regulations at home must be distinguished from using them to impose these values and regulations on other countries. Globalization’s rules should not force Americans or Europeans to consume goods that are produced in ways that most citizens in those countries find unacceptable. But nor should they allow the US or the EU to use trade sanctions or other pressure to alter foreign countries’ labor-market rules, environmental policies, or financial regulations. Countries have a right to difference, not to imposed convergence.
6. International economic arrangements must establish rules for managing interaction among national institutions. Relying on nation states to provide the essential governance functions of the world economy does not mean that we should abandon international rules. The Bretton Woods regime, after all, had clear rules, though they were limited in scope and depth. A completely decentralized free-for-all would benefit no one.
What we need are traffic rules for the global economy that help vehicles of varying size, shape, and speed navigate around each other, rather than imposing an identical car or a uniform speed limit. We should strive to attain maximum globalization consistent with the maintenance of space for diversity in national institutional arrangements.
7. Non-democratic countries cannot count on the same rights and privileges in the international economic order as democracies. What gives the previous principles their appeal and legitimacy is that they are based on democratic deliberation – where it really occurs, within national states. When states are not democratic, this scaffolding collapses. We can no longer presume that its institutional arrangements reflect its citizens’ preferences. So non-democracies need to play by different, less permissive rules.
These are the principles that the architects of the next global economic order must accept. Most importantly, they must comprehend the ultimate paradox that each of these principles highlights: globalization works best when it is not pushed too far.
dani is the ever gay eclectic
"...pretty much everybody understands that there really is no alternative to market-based systems. But that still leaves huge room for argument about the type of market system. If you look at the national economies of different countries, they have very different kinds of market-based systems. The US economy is very different from the Swedish economy, which in turn is very different from the French economy, which in turn is very different from the Japanese one. And all of them are very different from the kind of market economy China is."
one wonders why he has so much faith in institutional variations
without a theory of the limits to institutional impact on any market based production system
ie
how much difference is a difference
at any rate... regadrez :
" global markets are fundamentally hostile to heterogeneity on these questions, so what economic globalisation tends to do is push for uniformity, to push for similarity in standards and regulations. It is not entirely clear that this is desirable either politically or economically.... "
i think the following requires proof as well
"... (uniformity ) ..is certainly not inevitable in any way "
why ??
"...it’s up to governments and policy-makers to decide to what extent they want to go down that route "
ah... but can national gubmints survive long ...if they defy global corporate dictates ???
is this pipe dreaming ???in that light dani's 7 "pipe dreams ".......
1. Markets must be deeply embedded in systems of governance. The idea that markets are self-regulating received a mortal blow in the recent financial crisis and should be buried once and for all. Markets require other social institutions to support them. They rely on courts, legal frameworks, and regulators to set and enforce rules. They depend on the stabilizing functions that central banks and countercyclical fiscal policy provide. They need the political buy-in that redistributive taxation, safety nets, and social insurance help generate. And all of this is true of global markets as well.
2. For the foreseeable future, democratic governance is likely to be organized largely within national political communities. The nation state lives, if not entirely well, and remains essentially the only game in town. The quest for global governance is a fool’s errand. National governments are unlikely to cede significant control to transnational institutions, and harmonizing rules would not benefit societies with diverse needs and preferences. The European Union may be the sole exception to this axiom, though its current crisis tends to prove the point.
Too often we waste international cooperation on overly ambitious goals, ultimately producing weak results that are the lowest common denominator among major states. When international cooperation does “succeed,” it spawns rules that are either toothless or reflect the preferences of only the more powerful states. The Basle rules on capital requirements and the World Trade Organization’s rules on subsidies, intellectual property, and investment measures typify this kind of overreaching. We can enhance the efficiency and legitimacy of globalization by supporting rather than crippling democratic procedures at home.
3. Pluralist prosperity. Acknowledging that the core institutional infrastructure of the global economy must be built at the national level frees countries to develop the institutions that suit them best. The United States, Europe, and Japan have produced comparable amounts of wealth over the long term. Yet their labor markets, corporate governance, antitrust rules, social protection, and financial systems differ considerably, with a succession of these “models” – a different one each decade – anointed the great success to be emulated.
The most successful societies of the future will leave room for experimentation and allow for further evolution of institutions. A global economy that recognizes the need for and value of institutional diversity would foster rather than stifle such experimentation and evolution.
4. Countries have the right to protect their own regulations and institutions. The previous principles may seem innocuous. But they carry powerful implications that clash with the received wisdom of globalization’s advocates. One such implication is the right of individual countries to safeguard their domestic institutional choices. Recognition of institutional diversity would be meaningless if countries did not have the instruments available to shape and maintain – in a word, “protect” – their own institutions.
We should therefore accept that countries may uphold national rules – tax policies, financial regulations, labor standards, or consumer health and safety rules – and may do so by raising barriers at the border if necessary, when trade demonstrably threatens domestic practices enjoying broad popular support. If globalization’s boosters are right, the clamor for protection will fail for lack of evidence or support. If wrong, there will be a safety valve in place to ensure that contending values – the benefits of open economies versus the gains from upholding domestic regulations – both receive a proper hearing in public debates.
5. Countries have no right to impose their institutions on others. Using restrictions on cross-border trade or finance to uphold values and regulations at home must be distinguished from using them to impose these values and regulations on other countries. Globalization’s rules should not force Americans or Europeans to consume goods that are produced in ways that most citizens in those countries find unacceptable. But nor should they allow the US or the EU to use trade sanctions or other pressure to alter foreign countries’ labor-market rules, environmental policies, or financial regulations. Countries have a right to difference, not to imposed convergence.
6. International economic arrangements must establish rules for managing interaction among national institutions. Relying on nation states to provide the essential governance functions of the world economy does not mean that we should abandon international rules. The Bretton Woods regime, after all, had clear rules, though they were limited in scope and depth. A completely decentralized free-for-all would benefit no one.
What we need are traffic rules for the global economy that help vehicles of varying size, shape, and speed navigate around each other, rather than imposing an identical car or a uniform speed limit. We should strive to attain maximum globalization consistent with the maintenance of space for diversity in national institutional arrangements.
7. Non-democratic countries cannot count on the same rights and privileges in the international economic order as democracies. What gives the previous principles their appeal and legitimacy is that they are based on democratic deliberation – where it really occurs, within national states. When states are not democratic, this scaffolding collapses. We can no longer presume that its institutional arrangements reflect its citizens’ preferences. So non-democracies need to play by different, less permissive rules.
These are the principles that the architects of the next global economic order must accept. Most importantly, they must comprehend the ultimate paradox that each of these principles highlights: globalization works best when it is not pushed too far.
Friday, February 25, 2011
macro trumps trade theory
everyone knows comparative statics is of no use in policy debates
and yet lots of spilt ink recently over gains from new cross border trade
with or without a compensating transfer system TS
but look at trade in independent pieces
new imports take market share from pre existing domestic producers eh ??
the lost value added pnce earned by local producers
is only by assumption off set by "equally valued " exports
how can the TS pareto ize the outcome ??
not even the implicit market clearing mechanisms can rig this exercise
of course there's no reason to expect the shock of trade on relevent local markets
to quickly diffuse through out the "bordered factor system "
before a generation of non traders in the bordered area have taken a beating
but put that aside
recall all trade is mediated by credit or credit money now
and so any balance becomes remote
ie the as if barter assumptions is a complete magic trick
the bordered areas aggregate advantage
hardly comes into play if the macro effects lead to disemployment in the borrdered area
rather then smooth distribution of impact into winners and losers all still "employed "
as is implicit in the trade theory formulations
shared by all players
trade occurs across borders if the traders gain on both sides of the border
AND the non traders can't mount a stop order or rely on automatic TS actions
to maintain ex ante positions of non traders
and yet lots of spilt ink recently over gains from new cross border trade
with or without a compensating transfer system TS
but look at trade in independent pieces
new imports take market share from pre existing domestic producers eh ??
the lost value added pnce earned by local producers
is only by assumption off set by "equally valued " exports
how can the TS pareto ize the outcome ??
not even the implicit market clearing mechanisms can rig this exercise
of course there's no reason to expect the shock of trade on relevent local markets
to quickly diffuse through out the "bordered factor system "
before a generation of non traders in the bordered area have taken a beating
but put that aside
recall all trade is mediated by credit or credit money now
and so any balance becomes remote
ie the as if barter assumptions is a complete magic trick
the bordered areas aggregate advantage
hardly comes into play if the macro effects lead to disemployment in the borrdered area
rather then smooth distribution of impact into winners and losers all still "employed "
as is implicit in the trade theory formulations
shared by all players
trade occurs across borders if the traders gain on both sides of the border
AND the non traders can't mount a stop order or rely on automatic TS actions
to maintain ex ante positions of non traders
clark world tricks
the factor payments in any n factor production system
might look crazy if one factor could operate as a monopoly
"take us or leave us " while the rest of the factors remain wide open to general "supply " conditions
just compensation becomes problematic far before that however
even if there is no residual because of euler-ization of the "system"
might look crazy if one factor could operate as a monopoly
"take us or leave us " while the rest of the factors remain wide open to general "supply " conditions
just compensation becomes problematic far before that however
even if there is no residual because of euler-ization of the "system"
Monday, February 21, 2011
debt equity sunk costs
sunk costs oughta be immediately equitized
just as debt oughta be free to fall into a negative short term rate of interest
sunk cost the universal labor value wanna be
always operates at a deficit
in as much as it piles up as debt
a pure incubus
society needs to swap the cost of sunk costs for shares in the project/enterprise's residual stream
even if this involves cashing out some or even all of the compensation for the project/enterprise's sunk costs
the notion of a grant however seems too "liberal" a funding mechanism
to be pre dominant in funding r and d operations
the mechanism oughta be more complex time lagged and contingent on results
just as debt oughta be free to fall into a negative short term rate of interest
sunk cost the universal labor value wanna be
always operates at a deficit
in as much as it piles up as debt
a pure incubus
society needs to swap the cost of sunk costs for shares in the project/enterprise's residual stream
even if this involves cashing out some or even all of the compensation for the project/enterprise's sunk costs
the notion of a grant however seems too "liberal" a funding mechanism
to be pre dominant in funding r and d operations
the mechanism oughta be more complex time lagged and contingent on results
Sunday, February 20, 2011
just keep your eye on export import prices
sure forex fiddles matter
but set your target path to balanced trade
and start fiddlin'
and watch for export import price responses
they are likely to be mighty sluggish
reversing the trade balance effect
of a long bout of unfavorable forex rates
is obviously a very protracted process
given firm price formation especially inter border pricing
why ought the forex induced distortion effect on trade balance
take less time going out as coming on
imagine the reconstruction of productive facilities involved
but set your target path to balanced trade
and start fiddlin'
and watch for export import price responses
they are likely to be mighty sluggish
reversing the trade balance effect
of a long bout of unfavorable forex rates
is obviously a very protracted process
given firm price formation especially inter border pricing
why ought the forex induced distortion effect on trade balance
take less time going out as coming on
imagine the reconstruction of productive facilities involved
how pockets of inelastic debt bubbles burden price elastic exchange intended product markets
simple really
burden is inversely related to price level movement
if you inflate the product price levels you shrink the debt bubble to product "value " ratio in the total
production system
and of course the nasty case of visa versa if you allow the product price levels to deflate ....
yikes enter irv fisher
burden is inversely related to price level movement
if you inflate the product price levels you shrink the debt bubble to product "value " ratio in the total
production system
and of course the nasty case of visa versa if you allow the product price levels to deflate ....
yikes enter irv fisher
rational or rationalization
does it matter what forms expectations or how these expectations inform "next moves ???
obviously "traders " operate with different "move - position"
choice systems
as well as data bases
my intuition as one
" adds in "
varieties of player/trader choice systems
the market behaviour "results" begin to approach each other a vast if rough and ready cancellation of symetrical tails
and yet we have influenzas that shake the grip of these more or less "normal " shaped systems
flus generate among other outcomes the interetsting rational ..if collectively self defeating ..cascade into stampedes once the rationalists lack the credit lines to hold back the thundering panic herd
if one must either or these assumptions i share joe stigs paradigm preference for rational agents over modeling varieties of human trading behaviour primarily becausing learning looks like convergence to ratex
but i don't think it "matters " in "simulating " the actual collective behaviours ofon going continuosly operating shock struck markets where conditions not only are under constant bombardment from "outside " but equally and in climactic moments far more so constantly generating their own internal contradiction...ie endogenous shocks
upshot :
uncertainty in the end overwhelms rational "method " inherent spontaneous chaotic variability triumphs .. that is until the market "blows itself up " or is harnessed by a higher authority imposing rules and refs
' now toss in ...using " other peoples money"
and you are introducing
agent/ principal incentive contradictions not just inter player contradiction which needless to add
brings on another set of dimensions entirely
fraud swindle puffery you name
the marketing of "ability " is a competition
with its entrained series of deceptions fads etc
are markets self correcting along these dimensions ???
maybe if and only ifcrashing into a wall is labeled a braking system
choice systems
as well as data bases
my intuition as one
" adds in "
varieties of player/trader choice systems
the market behaviour "results" begin to approach each other
and yet we have influenzas that shake the grip of these more or less "normal " shaped systems
if one must either or these assumptions
but i don't think it "matters " in "simulating " the actual collective behaviours of
upshot :
uncertainty in the end overwhelms rational "method "
'
and you are introducing
agent/ principal incentive contradictions not just inter player contradiction
brings on another set of dimensions entirely
fraud swindle puffery you name
the marketing of "ability " is a competition
with its entrained series of deceptions fads etc
are markets self correcting along these dimensions ???
maybe if and only if
Tuesday, February 15, 2011
harmless assumption
the rationality of crowds ... is it's mean value
is that about the assumption the new wave of ratexers/learners use ??
it really is a pure sim if you assume a mechanical reality
is the economy
ie the economy is a model-able system
that can be discovered in the goodness of time
no matter how dynamical and fragile
i know saying a system is historical lacks sharp contours as a notion
but it seems harmless as an assumption
if we can interact with a system
in performance improving ways
we can build a clinical science ....no ???
sterling example
macro effective demand
management :
enhancing "remedies"
like larger fiscal deficits
for too high unemployment
zipping up
a sluggish phase state
of a market based..for profit
corporate dominated
credit driven economy
why require more then...
"hey look this Rx works !!":
at least
till we reach some impasse
where said Rx is no longer performing well
or is producing unacceptable side effects
again take schlock keynesianism
okay if we push too long and too hard
with the fiscal deficit measures
---vide the notorious 70's --
we need to improve our handling of
certain side effects like ....wage push inflation
the above is all posted to this humble purpose :
maybe we don't need any more then a successful critique of rat ex models
perhaps we are not required to build a better mouse trap
if we can use doc keynes patent elixir to "cure " the ill
i guess i'm too in love with late goodwin for my own goodwin
not macro policy wise
we can see the record plainly enough nowK school macro policy works and about as expected ...lots of times
...at least from a clearly defined class point of viewwhere more demand for labor is job one
what else do we need ??
the plague of idle-ness is past
the patients are back on their feetproducing widgets for mr plutonium
is that about the assumption the new wave of ratexers/learners use ??
it really is a pure sim if you assume a mechanical reality
is the economy
ie the economy is a model-able system
that can be discovered in the goodness of time
no matter how dynamical and fragile
i know saying a system is historical lacks sharp contours as a notion
but it seems harmless as an assumption
if we can interact with a system
in performance improving ways
we can build a clinical science ....no ???
sterling example
macro effective demand
management :
enhancing "remedies"
like larger fiscal deficits
for too high unemployment
zipping up
a sluggish phase state
of a market based..for profit
corporate dominated
credit driven economy
why require more then...
"hey look this Rx works !!":
at least
till we reach some impasse
where said Rx is no longer performing well
or is producing unacceptable side effects
again take schlock keynesianism
okay if we push too long and too hard
with the fiscal deficit measures
---vide the notorious 70's --
we need to improve our handling of
certain side effects like ....wage push inflation
the above is all posted to this humble purpose :
maybe we don't need any more then a successful critique of rat ex models
perhaps we are not required to build a better mouse trap
if we can use doc keynes patent elixir to "cure " the ill
but isn't this the essence
of
historical materialism
a causal system too complex to simulate adequately
but
again
complexity of causation as a claim doesn't have to mean
hayekian quiessence
we can see the record plainly enough now
...at least from a clearly defined class point of view
what else do we need ??
the plague of idle-ness is past
the patients are back on their feet
goodwin's great point
if the causation pattern in a model
is complex enough
the output will pass all tests for random-ness
that is history defined
is complex enough
the output will pass all tests for random-ness
that is history defined
Saturday, February 12, 2011
bull shit talks
http://streetlightblog.blogspot.com/2011/02/lean-mean-manufacturing-machine.html
a nasty blog boob-blob
tries to hanky pank the numbers on us
to prove
us manufacturing is lean and mean
vis a vis other " mature industrial economies "
errr except korea
basis:
unit labor cost and rate of output recovery
in otherwords
higher wage stag here and no work sharing program
and the bitter fruits of a legacy of relatively dead manufacturing output in the last recovery
setting a lower recovery target
that brushed aside
here's the up shot :
"My suspicion is that nearly all of the low-hanging fruit that could be gathered by shifting production from the US to low-cost countries like China has already been picked."
" Companies for which it made sense to shift production to other countries have already done so"
". Most of the manufacturing left in the US is, by and large, stuff that I think will probably stay in the US"
well that's a relief ..eh ??
this side bar
as the euro queens continue to stag on importation from yankee town
chinese/mexican imports of us exports be way up ...dramatically speaking
err but is this mainly industrial mr krush ?? ....just askin'
http://streetlightblog.blogspot.com/2011/02/selling-stuff-to-china.html
a nasty blog boob-blob
tries to hanky pank the numbers on us
to prove
us manufacturing is lean and mean
vis a vis other " mature industrial economies "
errr except korea
basis:
unit labor cost and rate of output recovery
in otherwords
higher wage stag here and no work sharing program
and the bitter fruits of a legacy of relatively dead manufacturing output in the last recovery
setting a lower recovery target
that brushed aside
here's the up shot :
"My suspicion is that nearly all of the low-hanging fruit that could be gathered by shifting production from the US to low-cost countries like China has already been picked."
" Companies for which it made sense to shift production to other countries have already done so"
". Most of the manufacturing left in the US is, by and large, stuff that I think will probably stay in the US"
well that's a relief ..eh ??
this side bar
as the euro queens continue to stag on importation from yankee town
chinese/mexican imports of us exports be way up ...dramatically speaking
err but is this mainly industrial mr krush ?? ....just askin'
http://streetlightblog.blogspot.com/2011/02/selling-stuff-to-china.html
grants versus loans
macro options simplified:
what is the core difference between a macro policy based on the credit system
versus one that must dip deeper into the tax and transfer system ??
when loosening household loan availibility is simply not enough ..err like now
you gotta go to uppin the grants flow ..give it away
trying to promote added household spending now
that has to be paid back later
is useless
when dah nuts already too big
obviously uncle can monetize the net grant addition
thesis :
when you gotta up the grant flow
monetizing will have near zero impact on product price level dynamics
what is the core difference between a macro policy based on the credit system
versus one that must dip deeper into the tax and transfer system ??
when loosening household loan availibility is simply not enough ..err like now
you gotta go to uppin the grants flow ..give it away
trying to promote added household spending now
that has to be paid back later
is useless
when dah nuts already too big
obviously uncle can monetize the net grant addition
thesis :
when you gotta up the grant flow
monetizing will have near zero impact on product price level dynamics
Thursday, February 10, 2011
lets be perfectly clear ...
commodity markets are rigged up
a few big players steer the price path
that oughta be the thesis to be refuted ...eh ?
pk has simply assumed adequate seller competition
...... enough producer/sellers pushing price quickly
down to marginal cost of production ...at all times
this amounts in reality
to chronic over supply conditions
if elasticity is low enough how can that condition ever last long
so long as adding supply has such a long " pipe line "
a few big players steer the price path
that oughta be the thesis to be refuted ...eh ?
pk has simply assumed adequate seller competition
...... enough producer/sellers pushing price quickly
down to marginal cost of production ...at all times
this amounts in reality
to chronic over supply conditions
if elasticity is low enough how can that condition ever last long
so long as adding supply has such a long " pipe line "
the oligs are behind the specs
the attempt to find a signature for commodity market manipulation
has bogged down over pk's "where's the hoard ?"
my own conflation of oligs who sell real oil wheat etc
with the paper bats flying around em
ie the specs
doesn't help
and trying to claim the inelasticity is so great the hoard could be so small
you couldn't find it
like a soft ball sized h bomb
missed in the search for wmd's in iraq
the question that kills
if its so easy to [pop the price why wasn't it done yesterday
since profit max is the agent's mission
why wait till today ??? why not profit max everyday ??
recall these models always start with spot price equal to marginal cost of production....
but why would it ever be that if it could be higher ???
the deeper question is obviously
how oligs form prices and price path strategy
given the ultra crucial and public sensitivity of these basic "products"
gouging max is out of the question
so is any blind " market will bare" strategy that neglects the strategic defeat of substitutions
-----------------
a simple model won't cut it here
even if it shows an inter action between say contrat prices and futures prices
just extinguishing pk's stupid question as the holy grail here
fails to answer the question convincingly
the path of prices is a history a narrative
yes it can be simulated to generate its essentials
explained
and of course serve as a warning about bubble potentials
but never predict the next bubble till its already rising
has bogged down over pk's "where's the hoard ?"
my own conflation of oligs who sell real oil wheat etc
with the paper bats flying around em
ie the specs
doesn't help
and trying to claim the inelasticity is so great the hoard could be so small
you couldn't find it
like a soft ball sized h bomb
missed in the search for wmd's in iraq
the question that kills
if its so easy to [pop the price why wasn't it done yesterday
since profit max is the agent's mission
why wait till today ??? why not profit max everyday ??
recall these models always start with spot price equal to marginal cost of production....
but why would it ever be that if it could be higher ???
the deeper question is obviously
how oligs form prices and price path strategy
given the ultra crucial and public sensitivity of these basic "products"
gouging max is out of the question
so is any blind " market will bare" strategy that neglects the strategic defeat of substitutions
-----------------
a simple model won't cut it here
even if it shows an inter action between say contrat prices and futures prices
just extinguishing pk's stupid question as the holy grail here
fails to answer the question convincingly
the path of prices is a history a narrative
yes it can be simulated to generate its essentials
explained
and of course serve as a warning about bubble potentials
but never predict the next bubble till its already rising
Monday, February 7, 2011
all markets can bubble till proven innocent
we need a model of immaculate speculation
a model
where spec markets
once evolved sufficiently around real spot markets
can make spot prices appear to
levitate up
or
gravitate down
without any change in stock positions or supply flow rates or demand intensity
the correct formality has just gotta be out there somewhere
a model
where spec markets
once evolved sufficiently around real spot markets
can make spot prices appear to
levitate up
or
gravitate down
without any change in stock positions or supply flow rates or demand intensity
the correct formality has just gotta be out there somewhere
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