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A golden age of macro economic statistics 3. Informal and precarious labor.

November 28, 2021 Leave a comment

In September 2021, a Dutch judge decided, in a case of the FNV Union against Uber, that Uber drivers are employees, not dependent or independent contractors. Meaning, on the micro level, that these employees in one stroke were entitled to more money, more protection and more rights. In the macro-conceptual framework of the International Labour Organization (ILO) this means that they shifted from a somewhat informal status to a formal status (see below). While it shows up, in the conceptual framework of the economist Guy Standing, as a shift from the ‘precariat’ towards the ‘salariat’:

the old salaried class has splintered into two groups: the salariat, with strong employment security and an array of non-wage forms of remuneration, and a small but rapidly growing group of proficians. The latter, which includes small-scale businesses, consists of workers who are project-oriented, entrepreneurial, multi-skilled, and likely to suffer from burn-out sooner or later. Traditionally, the next income group down has been the proletariat, but old notions of a mass working class are out-dated, since there is no common situation among workers. The earlier norm of this diminishing male-dominated class was a lifetime of stable full-time labor, in which a range of entitlements called “labor rights” was built up alongside negotiated wages. As the proletariat shrinks, a new class is evolving—the precariat”.

Source: Standing, G. (2014) ‘The precariat’, Contexts 13-4, pp. 10-12.

Source: ILO (2021), Conceptual Framework for Statistics on the Informal Economy (Geneva) p.  48.

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A golden age of macro-economic statistics 2. Macro-based CO2 emissions.

November 6, 2021 1 comment

I love the national accounts (NA). The NA focus on the money-economy. Total wages (who pays, who receives), profits, imports, exports, consumption, bank credit, the value and ownership of fixed and financial capital and (on the other side of the sectoral balance sheets) debts. By focusing on different kinds of money flows and stocks and by tracking flows between sectors the national accounts enable us to map the relations between economic sectors like construction and industry (cement!) but also between spending categories like consumption and production as well as imports. ‘Input output’ and ‘supply and use’ tables enable an analysis of these ever changing relations. Read more…

A golden age for macro economic statistics. Part 1: homestead rents or house rents?

October 31, 2021 1 comment

The post 2009 decade will stand out as a golden age for economic statistics. I do not mean econometric analysis, I mean statistics like asset prices, rents or estimates of inequality and household income. The empirical basis for a truly scientific macro economics has finally become less shaky. On an irregular basis, I will publish some posts on some of the treasure troves which have become available.

Here, already one example, based on the recent PhD of Matthijs Korevaar., ”Financial lessons from the long history of housing markets”. Finally a long term series of one of the most important price series there is: rents. How could we ever have done proper macro without it!

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A little taxonomy of inflation – there is no thing like ‘the’ price level

May 18, 2021 2 comments

covid-prices


Technical addendum: ‘Individual consumption expenditure of general government’ equals spending on health care and education and the like. Collective expenditure equals the proverbial streetlamps. NPISH stands for Non Profit Institutions Serving Households like churches, unions and soccer clubs.

At this moment there is quite some talk about the specter of inflation. And indeed: some prices are increasing. Houses! The runaway increase of house prices sure is a specter to be bothered about! But should we also bother about ‘flow’ prices, like consumer prices or the prices of fixed investments? The answer is: life isn’t simple. There are many kind of ‘flow’ prices. We should look at them in tandem. The consumer price index has been developed and designed to estimate the purchasing power of households, meaning that increases of the consumer price level should be analyzed together with increases in wage levels, other income components and hours worked. Focusing on one price index only, as central banks tended to do (they look at many, but policy is focused on one), is not very helpful. Surely not during crises when large sectoral differences lead to large differences between different price indexes (figure 1). The lock downs have, directly or indirectly, increased costs, led to disruptions of supply chains and a surge in hiring leads to shortages of labor in some places. Don’t bother. Or: do bother, but that means that we should not bother about erratic price developments but about the ability of households and companies to survive the disruptions.

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Vaccinations: a new world order (3 graphs)

March 28, 2021 2 comments

India and China are taking over. Cuban vaccines have entered phase three. It’s not the case that western countries are tacking the backseat. Yet. However… There are of course issues with the global vaccination effort. According to rumors, there are 29 million AstraZeneca doses produced in the Netherlands and stored in Italy which are not entering the vaccination chain because of… nobody knows (personal opinion: it sometimes feels as if the ‘intern from hell’ chairs the AstraZeneca board). Also, vaccines work excellent at the micro level, at this moment, when it comes to protecting the vulnerable. Vaccinating old men and women leads within weeks to a staggering decline in the death rate. The macro level is another issue. Only Israel, the fastest vaxer of them all, however seems to have reached something like herd immunity since around ten days ago. The UK and the USA will have to double vaccination rates to reach this stage – will pressure to finally start to export vaccines mounts. The EU, china, India have a long road ahead. Interesting question: logic dictates that Israel will have to vaccinate inhabitants of the Palestine state, too. Will this happen? Is it already happening? Anyway, looking at daily data (the graph shows a seven day rolling average) China vaccinated 6 million people in one day, yesterday. For the time being, there are no limits to vaccination growth. Good.

vaccinations 28 3 2021

 

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Who owns the market? An ILO report about the platform economy

March 4, 2021 4 comments

The ILO (International Labour Organization) has published a ‘flagship’ report about the platform economy. You know, the ‘Deliveroo‘, ‘AirBnB‘, ‘Uber‘ and ‘Mechanical Turk‘ economy. This economy is rapidly growing and is already changing our way of life – and work. I’m not going to parse the report (the ‘executive summary’ is 10 pages for a reason) but I will investigate if the platform economy is a new ‘mode of production’.

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The war against scientific economics continues

February 24, 2021 1 comment

From the AFEE (Association for Evolutionary Economics):

February 24, 2021

Subject: An Open Letter Regarding a Proposal to Dismiss 145 Faculty Members at the University of Leicester

We are shocked to hear that 145 staff members have been placed at risk of compulsory redundancy at the University of Leicester. 

In particular, 16 people within the School of Business have been targeted because their work is deemed to fall within “Critical Management Studies” or “Political Economy”. Specifically, “class based” and “institutionalist” forms of political economy are deemed redundant. However, the “rational choice orthodoxy” has been excluded from this definition.

The proposed action threatens academic freedom. It betrays a lack of appreciation of pluralism in academia, contradicting pedagogical research concluding that students learn best when presented with differing points of view, allowing students to consider the evidence, and come to their own conclusions.

We support our colleagues in Leicester University. We hope that the administration will reconsider this action as contrary to academic freedom, contrary to student learning, and contrary to the advancement of economics.

Sincerely,

John Watkins, President
Mary Wrenn, President-Elect
Association for Evolutionary Economics

To learn more about this issue:

Reference:  https://www.uculeicester.org.uk/ulsb16/briefing-to-colleagues/

To sign a petition in support of academic freedom and the advancement of economics,

https://docs.google.com/forms/d/e/1FAIpQLSd6LKASpFkpwidMcqFrNl_dKzI07as4ZbtOQAiuJWpSlWwNIA/viewform

Good news about Covid-19 vaccines and vaccinations

January 31, 2021 4 comments

Covid 19 vaccinations are going well. Quite a number of vaccines have been approved. And these are being used. At the time of writing close to 100 million ‘jabs’ have already been provided, not just of the Moderna and Pfizer vaccine but also of the Sputnic, AstraZeneca and Sinovac vaccines. And the pace is quickening, for instance in countries like Brazil and Morocco (which uses AstraZeneca and Sinopharm vaccines in its 3.000 vaccination centres).

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European (un)employment in times of Corona: hard won gains down the drains

January 8, 2021 Leave a comment

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Eurostat has recently published new data on EU unemployment. It’s going down again. Which seems good. But there is more to this than meets the eye. To be counted as ‘unemployed’ one has to have no ‘gainful employment’ and to be actively seeking for a job. People who give up seeking are not counted as unemployed. Neither are people leaving the labor market. And people are giving up seeking as well as leaving the labor market… Read more…

Christmas, Greece, 2020

December 25, 2020 1 comment

Merry Christmas and a happy…

December 24, 2020 4 comments

An inquiry into the intercourse of nations (or: no more shadowy prices)

December 2, 2020 2 comments

To locate an item in three dimensional space one needs three coordinates. The same holds, in my view, to locate the position of a nation in the multidimensional space of ‘broad prosperity’. We need a multitude (Two? Three? Four?) of axes to do this, one for every dimension. Prosperity is not just a monetary item. And even when one of the axes of this space surely will have ‘money’ as its central unit, other axes like the social one need their own axis. Alas, however, economists sometimes want to reduce the multi-dimensional nature of ‘broad prosperity’ to a monetary variable, putting a (shadow)price on everything, surreptitiously assuming that (market)prices are a precise gauge of ‘utility’. The ridiculous nature of the endeavors to put a price upon everything will be shown using a ridiculous, albeit logically correct, example. Reduction of the social realm to the monetary realm might go like this: Read more…

Immigration EU 2019 edition

November 28, 2020 Leave a comment

Immigration is a hotly debated issue in the EU. To be more precise: immigration from the ‘south’ is hotly debated. Immigration from the East is much more important and increasing. Some facts:

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Let the vaccinations begin…

November 27, 2020 3 comments

Let’s start to vaccinate as many people as possible as soon as possible. This will, together with other technological solutions like air purifiers, UV-C lamps as well as large scale fast testing, enable us to escape the cycle of alternating lock downs. It will also enable us to at least pursue a policy of total eradication of Covid-19. Lock downs work – for a while. They can buy us time. But the economic, social and psychological consequences are immense and we will have to rely as much as possible on other means. Vaccinations are one of our best weapons in this fight. Read more…

Hours worked, EU and UK Covid-19 edition.

October 15, 2020 Leave a comment

Source

Measuring the labor market and understanding labormarket data has recently been more of a challenge than usual. Read more…

The Theil inequality index: a flexible tool for the modern political economist

October 14, 2020 Leave a comment

Contrary to the Gini-index, the Theil inequality index enables us to directly tie estimates of inequality to the class and ownership structure of a society. As such, it’s an indispensable tool for the political economist, requiring a-priori knowledge of political economic theory but also an inductive reading of the sources and the situation. So, why is the Gini and not the Theil index often the economists inequality metric of choice? 

The Gini-index is an often used metric to estimate inequality. As such, it is highly useful. But for the political economist it has a fundamental drawback. It does matter if people are rich or poor and it does show the extent of differences in income or wealth. But it doesn’t matter if people are laborers or a capitalists, teachers of ‘precarious workers’, landowners or farmers, men or a women or black or white. The Gini-index can be used to measure but not to analyze inequality in a direct, metric consistent way. The are metrics, like the Theil index, which do enable this. Even then, economists have come to use exactly the Gini index (and not the Theil index) as their favorite tool for the measure inequality. Why? Branco Milanovic has some interesting ideas: Read more…

Can we reopen primary schools? Iceland data suggest: yes (they didn’t close them in the first place)

April 18, 2020 7 comments

IJsland6

  1. Mortality and prevalence of Corona.

Iceland tests a lot and has some of the best, most complete and representative, data on Corona infections (graph above, which is consistent with comparable data for Iceland from surveys, h/t Jesse Frederik) and seems to have come to grips with Corona, for the moment. What do these data tell us about the prevalence and mortality rate of Corona? Read more…

Corona: a positive agenda

April 3, 2020 7 comments

The eight hour working day was a long standing aim of organized labor. For decades it seemed unattainable. ‘International competition’ often was a main reason why countries stubbornly refused to introduce it. But from 1915 on and starting in Uruguay it suddenly spread all over the world. Within a few years, in many countries the six day eight hour working week had become the new normal.

Corona won’t end the world. After World War I and despite the Spanish flu many countries rapidly bounced back to prosperity. The introduction of the eight hour day did not prevent this in any way! Too much of this prosperity was based upon flimsy finance the productive capacity was available – while more robust ways to finance investment are of course possible.  Prosperity never is the problem even when flimsy finance, long working hours or unsustainable methods of production might be.

After Corona, countries can bounce back, once again. Of course, we have to introduce measures like job guarantees and the like during the ordeal and finance these in a sustainable way – which for the time being might well be by printing money instead of issuing debt! Be aware: I did not write: ‘printing unlimited amounts of money’ or ‘competitive printing of money by states of the USA or Eurozone countries’. But for the time being printing money to the tune of 20% of GDP per year might not do any harm even when, this time is different, I do agree with Ted Sargent there has to be a credible exit strategy. Which, by the way, also is the MMT stance. If there is one school of thought which does not promote unlimited money printing it’s MMT! Read more…

Corona is like the flu. The Spanish one.

March 28, 2020 7 comments

Yesterday, the number of Corona deaths in Italy rose to 919. In one day. According to Eurostat,  the 2018 total Italian death tally was 633,000. Which translates to on average 1,734 deaths a day meaning that the level of Corona deaths was over half of the ‘normal’ amount of deaths. Already. Despite the lock down. Dear people: this is much worse than a bad flu. And it is as bad as the Spanish flu. Which is supposed to have killed, around 1919,  about 50,000,000 people. FYI: the latest estimate of the number of casualties of the Spanish flu in Italy sets this number at 466.000 in the 1918-1920 period. With 919 deaths a day – Italy will get there. The silver lining: China and South Korea do have it under control. It is possible.

Yesterday’s number of deaths in Italy was of course a record. But with Corona, every day witnesses new records. The world wide number of Corona deaths has been increasing with 10 to 14% A DAY for two weeks now, almost quintupling in this period (from 687 to 3,271 a day). Yeah.

And it’s not just Italy which is at risk. As we’ve all seen, this enemy has the capacity to overwhelm medical systems not in months but in weeks. The Netherlands (which, thanks to neoliberal ‘lean and mean’ changes has a medical system did with very limited redundant physical hospital capacity) already tries to outplace patients to Germany… And they are still not tracking and tracing, the only successful policy thus far. Read more…

A million Corona tests a day. In the short run.

March 25, 2020 3 comments

The news is as bad as it can be. Our most dependable indicator, people dying from Corona, suggest an exponential rate of growth of over 10%. Per day. Actually: 14%.  In a little over 2 weeks, 20.000 people will die. At least. Per day. If we do nothing.

The news is as good as it can be. High biotech companies are developing fast track tests at an unbelievable rate while the government offices which (rightly) have to approve these are working around the clock to do this. Korea will soon export 300.000 tests a week. That’s not enough to meet global demand. But if humankind has become good at anything it is at producing incredible amounts of stuff at an incredible speed. Tests, ventilators, masks – these will come. A million tests a day is feasible. And needed.

But other news is dire. Efficient production chain kind of thinking in the medical sector means that supplies of beds, ventilators, nose swabs and whatever have already run out. We will produce these, production of masks and ventilators is already ramped up. Are these ‘just in time’ stocks a market failing? No, they are a government failing (albeit not in Asian countries which learned from SARS). In many countries, like Brasil and the USA, the ‘takers and looters’ have taken command. BAD!

What we need is of governments guiding the way, paying costs while at the same time taking care of moral hazard and racketeering and taking care of public health tracking and tracing measures and companies doing what they do best: producing stuff. As some Asian countries show: this can be done.

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