"we carry death out of the village"

Month: June, 2011

The madness of Murph: “expansionary fiscal contraction” confused

Accountant Richard Murphy has an article up at Liberal Conspiracy about “expansionary fiscal contraction”. He writes,

Expansionary fiscal contraction is what is called a ‘general equilibrium model’ based on the ideas of neoliberal economics. For the wonks there’s an explanation here.

What this means in fairly lay terms is that the model assumes that we know the future.

Question: Who the hell is this guy, and what is he going on about? Your guess, dear reader, is as good as mine.




Big dogs have smaller cats
On their backs to bite ’em;
And smaller cats have smaller dogs,
And so on, ad infinitum.

–Jonathan Swift

Subjugated knowledges

Discrimination is always high on the agenda at the Society for Personality and Social Psychology’s conference, where psychologists discuss their research on racial prejudice, homophobia, sexism, stereotype threat and unconscious bias against minorities. But the most talked-about speech at this year’s meeting, which ended Jan. 30, involved a new “outgroup.”

It was identified by Jonathan Haidt, a social psychologist at the University of Virginia who studies the intuitive foundations of morality and ideology. He polled his audience at the San Antonio Convention Center, starting by asking how many considered themselves politically liberal. A sea of hands appeared, and Dr. Haidt estimated that liberals made up 80 percent of the 1,000 psychologists in the ballroom. When he asked for centrists and libertarians, he spotted fewer than three dozen hands. And then, when he asked for conservatives, he counted a grand total of three.

“This is a statistically impossible lack of diversity,” Dr. Haidt concluded, noting polls showing that 40 percent of Americans are conservative and 20 percent are liberal. In his speech and in an interview, Dr. Haidt argued that social psychologists are a “tribal-moral community” united by “sacred values” that hinder research and damage their credibility — and blind them to the hostile climate they’ve created for non-liberals.

Full story here.

A UK balance sheet recession?

Inspired by Stephen Gordan’s post at Worthwhile Canadian Initiative, I decided to create some similar series for the UK. At present, after trawling through the utterly user-unfriendly ONS site (what’s up with that, by the way?), I’ve only managed to put together series for UK net worth. I plan update this post as I pull together more data.

Total net worth in current prices shows a slight decline beginning in 2007:

UK total net worth, 1989-2009, current prices

Scaling this series against the population and the price level (CPI) makes the decline look more noticeable:

UK real per capita net worth, 1989-2009

But still not as steep as the decline in the early 1990s, and nothing on the scale of the losses in the US, where real per capita net worth shrank back to 1999 levels.

Zizek explains the Sound of Music

Let’s think about, well, one of the great achievements of Western civilisation: a movie like the Sound of Music…


Nightwatch report that the Egyptian Ayman al Zawahiri has taken over the post recently vacated by Osama bin Laden:

Earlier reports suggested an operational field commander would replace bin Laden. Today’s report tends to confirm that the Egyptian, or non-Saudi, faction now is in charge of al Qaida. The significance of this is a shift in targeting strategy. Zawahiri wants to punish apostate Islamic states before attacking the West again. Pakistan’s government tops his list of targets, according to his comments 18 months ago.

Estimating a static Phillips curve

Unemployment + boredom + Stata = this

To estimate a “classic” static Phillips curve, I analysed annual UK data for the period 1971-2010 (ONS series BCJE for inflation and series CZBH for unemployment). I estimated an equation of the form,

Where RPI is the annual year-on-year percentage change in the RPI index (i.e. the annual rate of inflation) and unemp is the rate of unemployment as a percentage of the population.

To examine the trade off between unemployment and inflation, I test,

Using the OLS t-statistic. Under the null, t has a  t-distribution with 40 df. Therefore, reject at the 5% level if .

Using the ONS data, I estimate the following model:

(1.883)   (0.3090)

Since , this suggests a trade-off between unemployment and inflation. The t-statistic is approximately -1.47. The p-value against a two-sided alternative is 0.149. Therefore, we fail to reject the null at the 5% level.

Unfortunately, the Classical Linear Model assumptions that OLS relies on are violated in this case. I may address this in a future post…

Trends in UK fertility

ONS estimate the current (2009) UK total fertility rate (TFR) at 1.94. Mean TFR over the period 1999-2009 was 1.78. In 2001 TFR started to gradually rise from a historical low of 1.63 to its current level.

UK total fertility rate, 1999-2009

ONS’ Population Trends 2008 suggests three reasons that might explain the rise in TFR in the last decade. The first is the fact that women are tending to have children later in life. I.e., this is a statistical discrepancy and is unrelated to the number of children women have over the course of their lives (captured by the Completed Family Size measure). The second is the impact of immigration: migrants from high fertility countries will naturally have a higher TFR than native British. For example, in 2001, the TFR for Pakistani born women living in the UK was 4.7, compared to an overall UK average of 1.63. On the other hand, migrants from lower fertility states like EU countries will tend to have a similar TFR to the UK norm. The third is that increased support has been offered over the last decade to individuals with children. This support includes, for instance, Working Families Tax Credit, Child Tax Credit, the Employment Act, the Work and Families Act, and so on. The article cites a study by Adam and Brewer (2004), which estimates that “state financial support for children in the UK grew 52 per cent in real terms between 1999 and 2003.”

Percentage of live births outside marriage, 1999-2009

During the same period, the percentage of children born outside marriage increased in a linear fashion, from 38.9 percent in 1999 to 46.2 percent in 2009. If the trend continues around 48 percent of children will have been born outside marriage in 2011.

Percentage of live births to non-UK born mothers, 1999-2009

Percentage of births to non-UK born mothers has also increased in a linear fashion over the decade, rising from 14.3 percent in 1999 to 24.7 percent in 2009. At current rates of growth, this suggests that this figure is around 27 percent of births today.

Life imitates (The) Onion

Minister Shocked Somalia Isn’t Worst Country for Women

When the Thomson Reuters Foundation revealed today that Afghanistan had topped its list of the world’s most dangerous countries for women, Somalia’s women’s minister, Maryan Qasim, had one reaction: not Somalia? “I’m completely surprised because I thought Somalia would be first,” she told Reuters.