Monthly Archives: January 2009

Trade outlook in context

Chart of world trade growth

The IMF is spout­ing a stream of press releas­es (that it calls “World Eco­nom­ic Out­look” revi­sions) to show…well I’m not sure what. That it’s rel­e­vant again, I sup­pose, and ready to take charge. But it’s wise to treat their pro­jec­tions with the same care you would any oth­ers: a warn­ing sign for me was notic­ing that some of their revised analy­sis is based on annu­al­ized 3-month per­cent changes in out­put and trade. Bound to be volatile. So it’s a good idea to put these pro­jec­tions in con­text, as I attempt to do in this chart.

Teachers Kits on WTO


I’ve noticed quite a few vis­i­tors to this site have used one or oth­er of the search engines to look for basic infor­ma­tion on the WTO, such as the WTO’s ‘objec­tives’. It’s not some­thing I often pro­vide: the WTO itself does a lot of that, and pret­ty well, too.

Over the past decade or so, I’ve been com­mis­sioned by the WTO to write sev­er­al books about the Agree­ments, about the his­to­ry of WTO and about the pol­i­tics of trade. For one rea­son or anoth­er not all of these projects lead to a pub­li­ca­tion (my bio con­tains a list of those that did).

One such project was a sort of ‘exper­i­ment’ at pre­sent­ing the WTO to junior, mid­dle and senior high-school stu­dents.

Victorian temperature fell in 2008

imageThe updat­ed Bureau of Mete­o­rol­o­gy data for 2008 show that the ‘anom­aly’ has fall­en back to just over 0.3 of a degree. This graph (click the thumb­nail) has been cre­at­ed from BOM data using the R code from this post.

Recognition of R

To some peo­ple R is just the 18th let­ter of the alpha­bet. To oth­ers, it’s the rat­ing on racy movies, a mea­sure of an attic’s insu­la­tion or what pirates in movies say.”  extract from NY Times

Should I be embar­rassed, as an Aus­tralian, that one of my favorite lan­guages comes from New Zealand?

Bailouts could stifle recovery

The prob­lem is well-expressed by Bar­ry Fer­gu­son writ­ing in The Age (of all places):

Now is the time when com­pa­nies with unsus­tain­able busi­ness mod­els, with out­dat­ed prod­uct ranges, too much debt, inad­e­quate boards and man­age­ment, and poor cor­po­rate gov­er­nance, will be exposed. It is a time when leg­endary econ­o­mist Joseph Schumpeter’s gales of cre­ative destruc­tion do their best work.

The pri­ma­ry man­i­fes­ta­tion of the Government’s prob­lems is the bail-out. While there is a case to sup­port the banks based on the per­va­sive nature of the impacts, there is much less of a case for sup­port­ing the pro­duc­tion and retail ends of the car indus­try and child-care cen­tres. These inter­ven­tions will lessen our economy’s abil­i­ty to adjust to a post-reces­sion glob­al econ­o­my.” extract from Bar­ry Fer­gu­son

A longer expo­si­tion of the same point is offered by Daron Ace­mogelu in a recent Pol­i­cy Insight paper for CEPR that repays read­ing. He points out that

Bartering for food ‘security’

Counter-trade, or ‘bar­ter­ing’, is not a sus­tain­able way to finance com­mod­i­ty sup­ply. It attracts atten­tion from time-to-time; such as when the for­mer Sovi­et states were split from the moth­er-ship in 1990 and found them­selves short of cash. Expe­ri­ence shows, every time, that it means trad­ing one form of illiq­uid­i­ty (lack of cred­it) for anoth­er even less tractable (too many Sovi­et trucks, or thou­sands of tonnes of low-grade man­ganese, or a dam-full of cloudy veg­etable oil).

In a strik­ing exam­ple of how the glob­al finan­cial cri­sis and high food prices have strained the finances of poor and mid­dle-income nations, coun­tries includ­ing Rus­sia, Malaysia, Viet­nam and Moroc­co say they have signed or are dis­cussing inter-gov­ern­ment and barter deals to import com­modi­ties from rice to veg­etable oil.” extract from Finan­cial times

The use of non-trans­par­ent denom­i­na­tors in place of trans­par­ent ones (like cash) is too attrac­tive to fraudsters—often in the shape of a ‘state-owned’ enterprise—that want to laun­der their excess­es and dis­guise their fail­ures.

EU incentives for milk production


The re-intro­duc­tion of inter­ven­tion-buy­ing and export sub­si­dies for milk prod­ucts in the EU comes after the steady fall of EU milk/milk-prod­uct prices to near the (undis­tort­ed) world mar­ket price over the past decade. The ‘gap’ between the dis­tort­ed EU price and the undis­tort­ed world price is the ‘nom­i­nal rate of assis­tance’ (NRA) to EU milk that can be plot­ted in the Agri­cul­tur­al Incen­tives Data­base.