BLOG MASH-UP OF THE WEEK

Everyday the blogosphere offers an enormous amount of in-depth analysis on any imaginable topic. The world of macroeconomics and economic forecasting is no exception. To keep themselves updated on the latest information, our in-house team of economists scan the world wide web and gather what they consider the most interesting, appealing, informative or just curious blog posts from experts in the field of global economics. Here’s the list of the Top 4 posts from this week. Check it out!

  1. Stumbling and Mumbling – Chris Dillow: ‘THE POWER OF THE 1%

    In this blog post, Chris Dillow talks about the income distribution. More specifically he argues that a reduction in the income share of the top 1% would increase the average income of the rest. Using data from the UK, Dillow says that if the income share of the top 1% could be reduced from the current level of 12.9% to 9.9%, then we would notice an increase of GBP 72 per month for someone with a salary of GBP 25,000 per year. Of course, the simple math makes sense only if the aggregate income in the country does not change. Dillow adds that in the last 20 years—a time of the rising share of the 1%—real GDP growth has averaged 2.3%, which is slightly above the 2.2% average observed in the previous 20 years. Despite the hypothesis being a reasonable one, in popular discussions is not so much explicitly rejected as not even considered. – Dirina Mancellari

  2. Ukraine Economy Watch – Edward Hugh: ‘The suitcase mood’

    In this article, the polivalent author Edward Hugh points to the consequences of political instability in Ukraine. Hugh’s argument goes far from the much debated consequences of the IMF provision of financial aid to the country and its macroeconomic conditions. Nor it argues about the regional stability that will depend on how the situation of the Russia-Ukraine relations results from the conflict. Instead, Hugh focuses on the evolution of the population. Starting with the brain drain and the population decline that the country is facing, he ends with an interesting discussion about the sustainability of population movements for those countries that face a brain drain and whose economic growth is dragged by the lack of human capital accumulation. – Enrique Jorge

  3. Yanis Varoufakis – Yanis Varoufakis: ‘If Scotland, why not Greece?’

    Blogger and economist Yanis Varoufakis compares the situation of Scotland and Greece. Both countries are currently inside a monetary union; Varoufakis makes the case that, while it is advisable for Greece to stick to the euro, Scotland instead should get out of sterling. According to Varoufakis, “Scotland stands to gain nationhood without suffering any of the catastrophic economic costs that Greece would sustain following a unilateral exit from the Eurozone”. On the one hand, Greece can reclaim sovereignty within the Eurozone by challenging “the logic of austerity” together with other debt-stressed countries; on the other hand, Scotland would never be able to be really sovereign and independent within a strongly asymmetrical monetary union with England.  – Armando Ciccarelli  

  4. Economix – Josh Barro: ‘People Think We’re in a Recession. Don’t Blame Them.

    Josh Barro discusses the discrepancy between official figures on the recovery of the US economy and people’s perception of the economy’s state. He points out that even though the US economy has emerged from recession in 2009, a recent survey indicates that the majority of interviewees believes the economy still to be in recession. The author identifies the current situation of the labour market, with unemployment and stagnating wages, as driver of this perception. His post includes an interesting reflection on the development of wage and capital income over the last decades, showing the decreasing relative contribution of wage income to GDP. – Teresa Kersting 

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