Demosclerosis

David Brooks has an excellent piece in today’s NYTIMES

http://www.nytimes.com/2010/10/12/opinion/12brooks.html

Key Insight:

“Why are important projects now unaffordable? Decades ago, when the federal and state governments were much smaller, they had the means to undertake gigantic new projects, like the Interstate Highway System and the space program. But now, when governments are bigger, they don’t.

The answer is what Jonathan Rauch of the National Journal once called demosclerosis. Over the past few decades, governments have become entwined in a series of arrangements that drain money from productive uses and direct it toward unproductive ones.”

                                                                         - David Brooks

Transforming China's Economic Model

Nobel Prize in Economics

Econ Nobel Prize awarded to Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides "for their analysis of markets with search frictions".

Research Summaries of the 2010 Nobel Laureates:

Technical Summary

http://static.nobelprize.org/nobel_prizes/economics/laureates/2010/ecoadv10.pdf

Non-Technical Summary

http://nobelprize.org/nobel_prizes/economics/laureates/2010/info.pdf

Quantitative Easing

As the Federal Reserve prepares to implement QE II, it is a good time to evaluate the effectiveness of the first round of QE measures undertaken by central banks in Western Europe and in the US:

http://www.economist.com/node/17202341/print

What is Quantitative Easing (QE)?
For those with a limited understanding of quantitative easing, here is a primer from the Bank of England.

Political Economy of Reforms in Emerging Markets

Lula’s Legacy

http://www.economist.com/node/17147828

A Brilliant Piece from the New Yorker on Justin Yifu Lin and China’s Liberalization History

http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_osnos

Falling Dollar - New York Real Estate Market: An Interesting Link

According to the NYTimes article - The Dollar Made Them Do It:
"The dollar, more than anything else, drives international sales, and because it remains weak globally, New York is still a good deal for many buyers ...

In recent years, much of the new development in Midtown, whether large projects like the Setai Fifth Avenue, a 60-story hotel-condo, or smaller ones like the Centurion, with 48 apartments, has been directly marketed to foreigners. Centrally located iconic buildings like the Plaza also do well with this market."

Labor Market Issues

Taxes and Labor Supply: Greg Mankiw provides a personal example

http://www.nytimes.com/2010/10/10/business/economy/10view.html

Malcolm Gladwell considers the question “Why Are Stars Paid so Much?”

http://www.newyorker.com/reporting/2010/10/11/101011fa_fact_gladwell

Meanwhile, Slate's Noah has a ten part feature on income inequality in the US - The Great Divergence
http://www.slate.com/id/2267157/

Italian Economy – Strangled by Gerontocracy

http://www.time.com/time/printout/0,8816,2024136,00.html

The above noted article succinctly summarizes Italy’s problem:

“The motives of those leaving haven't changed much since the last wave of economic migrants struck out to make their fortunes a century ago. But this time, instead of peasant farmers and manual laborers packing themselves onto steamships bound for New York City, Italy is losing its best and brightest to a decade of economic stagnation, a frozen labor market and an entrenched system of patronage and nepotism. For many of the country's most talented and educated, the land of opportunity is anywhere but home”.