Sean Kilpatrick
A roundup of the best economic posts on the Web
Four questions for the Bank of Canada
Nick Rowe and Stephen Gordon of WCI, and a few dozen other Canadian economists attended a workshop earlier this week on inflation targeting hosted by the Bank of Canada. Mr. Rowe came away with four questions for Mark Carney.
"We all agreed the workshop was rather boring. The hosts (correctly) took this as a compliment. Checking the blogosphere when I got home, I see the Eurozone is still falling apart, and 24 US economists (some of them real economists) have flipped out. We look pretty good in comparison. But not good enough by any absolute standard that I don't want to ask my fourth question."
Axis of Depression
Paul Krugman questions the motive of those calling for the Fed to stop meddling in the U.S. economy.
"What do the government of China, the government of Germany and the Republican Party have in common? They're all trying to bully the Federal Reserve into calling off its efforts to create jobs. And the motives of all three are highly suspect. ... No doubt some of Mr. Bernanke's critics are motivated by sincere intellectual conviction, but the core reason for the attack on the Fed is self-interest, pure and simple."
A Hedge fund republic?
Also from The New York Times, Nicholas Kristol follows up on a column about income inequality in the U.S. with an apology:
"That's right: I may have wronged the banana republics. You see, some Latin Americans were indignant at what they saw as an invidious and hurtful comparison. The truth is that Latin America has matured and become more equal in recent decades, even as the distribution in the United States has become steadily more unequal.
The Economist, however, says the United States "ain't no banana republic."
Japan's social security bill getting out of hand
Also from The Economist:
"Two decades of post-bubble economic stagnation, together with an ageing population, have led to what the Japanese call the waniguchi (crocodile's mouth) effect: total public expenditure has soared whereas tax revenues have dropped. The fastest-rising expenditure item in the budget is social security (covering pensions, medical insurance, welfare and employment programmes), which has risen from ¥11.5 trillion in 1990 to a forecast ¥27.2 trillion this year. Some 70% of all social-security payments now go to those over 65."