Unemployment in Lithuania, a study about debt and the economics curriculum
Updata: paragraph 1 states that ‘remittances were… a whopping 25% of total national income’. The source cited explicitly states this – but the source is wrong. Clicking on the full data set button of the source yields that remittances were 4,3% of GDP and 23,7% of ‘net wage fund ratio’, a phrase unknown to me but, if the gross/net difference is about 20%, the wages-share of income is about 0,5 and take home pay is about 50% of wages, might be something like net wages of laborers.
1. Unemployment in Lithuania. As a kind of follow-up of this post, a graph on unemployment in Lithuania. Unemployment is down with about 60.000 people which, for this country of 3 million people, is a lot (a very favourable development yes, but it’s still way to high). In the same period there was however a net emigration of about 100.000 people… An additional argument against austerity seems to be that it wrecks the ‘human capital’ of a nation as it makes people emigrate. Remittances of these people were, however, a whopping 25% of total national income – which also points to a solution for the Portuguese and Greek: get rich in Germany. At this moment, unemployment in Lithuania seems to be on the rise again, while GDP declined in the fourth quarter.
Source: Statistics Lithuania
2. An interesting study about debt from J.W. Mason and Arun Jayadev
I’m not always impressed by ‘the economist as an intellectual’. An interesting new study about ‘debt’, which basically states that the increase of household debt in the USA was not caused by net lending but by refinancing interest charges, does not mention people like David Graeber, Michael Hudson, Steve Keen or the quite comparable (but less historical) work of Paul Grignon. However – it gave me a ‘join the club’ feeling:
“From a policy standpoint, the most important conclusion is that in an environment where leverage is already high and real interest rates significantly exceed real growth rates, deleveraging is almost impossible simply via reduced expenditure relative to income. The “headwind” from unfavorable debt dynamics is too large to be overcome by any realistic curtailment of expenditure.”
We really have to learn again that lending is risky business and that banks, when they write down debts, also should forgive them (which they don’t!). And we surely should not use the literally medieval method of expecting larger political entities like (in the middle ages) cities or (nowadays) states to pay private debts (Iceland! Ireland!). Hey, they invented bankruptcy for a reason.
3. Beware: they want to enhance the scientific content of the economics curriculum! Diane Coyle writes:
The global crisis has plunged the economic profession into a state of anxiety, at least in some quarters. One question, among many, is whether the way economics is taught at universities needs to be rethought. This column summarises the range of views raised at a recent conference on this issue organised by the British government, the Bank of England, and the Royal Economic Society.
And what do we have to do, according to people who employ economists?
“A surprising number of the employers present suggested the need for teaching more economic history; and also a focus on the international context rather than just national economic data; and a better practical grasp of quantitative methods including collecting and understanding data (as opposed to more sophisticated econometric techniques)”
Hmmm… yes, that’s me. See also this article
Anyway, events as well as dissident voices from non-dissident people seem to indicate that something is crumbling, when it comes to economics.