I thought the cover of this week’s The Economist was cool. Be sure to regularly visit their blog- The Free Exchange.Worth reading in this week’s edition;
The Litvinenko affair
Human-rights law -Ending impunity
Dubai-All that glisters...
Technology anniversaries- Bits of memory
Internet advertising
America and Iraq-The war over the war
Economy rankings
Rockefeller revolutionary
Economics focus-Shots across the Stern
Sir Nicholas thinks a person born in 2106 should count for as much as one born in 2006. In his defence he cites some big thinkers, including Roy Harrod, a British economist best known as a growth theorist and a biographer of John Maynard Keynes, who thought discounting future generations was just a “polite expression for rapacity”. He admits there is a slim chance these prospective generations will not in fact exist: the earth might be wiped out by a meteorite, for example. For that reason, and that reason only, he discounts their welfare by just 0.1% for every year that passes before they appear.
Augusto Pinochet
Iran - Denying the HolocaustHis life was austere, disciplined and watchful of the hand of providence. He never smoked, rarely drank and boasted of needing only five hours' sleep a night, waking at 5.30 to a life ruled by the clock. Even on holiday, his time was minutely planned: half an hour's snooze in the sun, a swim for ten minutes, a walk for 15. Fortune-tellers were regularly consulted. Indeed, the date of the referendum, October 5th, had been chosen because he believed that his lucky number was five.
Iran's foreign minister, Manuchehr Mottaki, opened the Holocaust conference by favourably comparing his country's spirit of “scientific and scholarly” freedom with the West's. On the second day, President Ahmadinejad declared that “Israel is about to crash, the Soviet Union disappeared, and this will also be the fate of the Zionist regime...Humanity will be free.”
Patent filings
Relative to its GDP, Finland files the most patents at the world's main patent offices—in America, Europe and Japan—according to the OECD
2 comments:
Re the Stern report and the argument concerning basic economic constants, I would like to proffer some logic that leads me to a relatively low value of eta. I think that the value of eta is maybe 1.1 or 1.2, but no more than that, and over a wide range of moderate incomes [not poverty and not extremely wealthy] it's close to 1.
How can we determine that Alice, an earner of $100,000, gets roughly the same value from a marginal $2500 as Bob, who earns $40,000, gets from a marginal $1000?
My answer is fairly simple. A worker's leisure time gives hedonic pleasure. It's very reasonable to assume that Alice and Bob would have to give up similar amounts of leisure time utility to work a 41st hour per week.
Many people do work the 41st hour, but hours worked doesn't seem to change very much over a fairly wide range of incomes. I get the impression that workweeks in the US lay out as follows over the following income ranges:
$10K-$20K 55-65 [2 jobs]
$20K-$40K 45-50 [some OT]
$40K-$80K 45-50 [some OT]
$80K-$160K 50-55 [hard-driving professional]
$160K-$320K 50-55 [again, hard-driving professional]
There's nothing in this data that screams anything other than util=log(income), which implies that eta=1, except in the low income ranges where eta increases a bit and the high income ranges where it decreases. The workers in the income ranges where overtime pay is common should be considering working slightly shorter hours when estimating eta from this data because their work week would be less if they didn't get time-and-a-half overtime pay and therefore would only increase their pay 2.5% by working the 41st hour like the low- and high-income earners.
Before you protest that professionals are not paid by the hour and that an individual must pretty much follow the custom of his industry, please remind yourself that the common arrangement of the work week will match the bulk of the employees' preferences as to quantity, somewhat tempered by the needs of the profession. Also, if all professionals woke up all deciding that they wanted to work 10% less and accept 10% less money it would happen.
-dk
It takes quite a long time to reach these shores! With luck, I will be reading it next Tuesday. Thanks for the tip, anyway.
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