Discontinuing the blog

Since October 2009, this blog has created 81 posts and attracted more than 5000 visits. Despite running for almost two years, however, this blog has remained a modest project among friends and fellow students associated with HU Berlin.

We have decided to discontinue BTE and move future blog posts to the Open Economics Working Group (OpenEcon WG) of the Open Knowledge Foundation (OKFN). As part the OKFN, the OpenEcon WG is working at a range of exciting projects that seek to promote dissemination of datasets, research findings and standards for future academic work. We believe that joining with OKFN will bring fresh ideas into the BTE group - most importantly, by contributing to OKFN, we will also be able to share our ideas to a wider audience.

We would like to invite everyone interested to join the mailing list, participate and suggest ideas for future projects. If you feel like contributing blog posts to the OpenEcon WG, please drop a mail to guo.xu [at] okfn [dot] org.

All the best,

Berlin Talks on Economics

Saif and the Libyan democracy

In recent days, Saif al-Islam Gaddafi has appeared several times on Libyan TV, complementing the rather comic performances of his father: The anti-government protests were "imaginary".

Contrast this with his PhD thesis on "The role of civil society in the democatisation of global governance institutions" written at the LSE four years ago, and you have a good example of irony. 

Addendum: UK inequality over time

Even though social mobility has nothing to do with economic inequality per se (in fact, increased social mobility can induce inequality), here is another addendum to yesterday's post I came up with Velichka today (click to enlarge):

The left plot is from the official UK stats website, showing the evolution of the Gini over time. This plot is misleading in two ways. First, the header "Income inequality remains stable" does not refer to the entire period 1983-2009 but rather to the period "since 2005/2006 [where] the level of inequality was relatively stable". Since changes in distribution evolve very slowly anyway, this is a somewhat redundant thing to say for a three year period. Second, the data only goes back to 1983, showing us half the story. It also demonstrates once more the perils of statistical framing.  

The right plot is based on the exact same calculation and source but goes back as far as 1962. While the rise in the Gini coefficient by 10% points between 1980 and 2000 may not seem that obvious if looking at the limited 1983-2009 period, the stark increase becomes very obvious once gauged against the pre-1983 trend. Needless to say, the structural break in 1979 coincides with the 1979 election, where Thatcher became Prime Minister.

Social (Im)mobility in Britain

Not before you settle down in England, do you realise the significance of social mobility: the struggle of many and the privilege of few. Two BBC documentaries investigate the issue of social mobility from two slightly different angles: 

First, Richard Bilton examines the paths individuals from more disadvantaged socio-economic background take in the realisation of their professional careers in “Who Gets the Best Jobs?”. A certain path dependence pattern emerges, as students from private schools are more likely to get in the top universities and employers are recently shortening the list of universities whose graduates they are willing to take onboard. Many young people struggle in unpaid internships, yet doing unpaid work in itself is a privilege in itself, as few are able to afford the living expenses for months. The ambition of parents and the vigour with which they support their children in school choice and career development options determines eventually where they are heading and how far they are going to get. Professor Saunders, who was briefly shown in the documentary claimed that children from higher social classes are more intelligent and more able and there is “a social mobility myth”.

Second, Andrew Neil in “Posh and Posher: Why Public School Boys Run Britain”  (Watch tomorrow on BBC One) investigates the background of the governing political elite and establishes a declining trend in social mobility. Eton, Oxford and Cambridge graduates are the ruling elite. In fact, it seems that the most popular course for British politicians has been Philosophy, Politics and Economics (PPE) at Oxford. While Margaret Thatcher and John Major represent the “grammar schools generation” of bright individuals from lower socio-economic background who were enabled to rise to the top political careers of the country, it has become less likely that people from “humble origins” would climb up the ladder up to ruling Britain. Labour hardly represents the working class anymore. For individuals without Oxbridge background, engagement in trade unions has been the only route upwards, yet this “pipeline” to success is not there today as trade unions are not what they used to be. University education or trade union membership gives the necessary confidence to run for political office.

Well then: if the ruling elite comes from a narrowly determined margins, how can they understand the real issues of the wider population they are governing who didn’t go to private schools or Oxbridge? Top politicians are not representative of ordinary people. The recent fiscal reforms in Britain may signal the disconnection of the coalition government from the pleads of the ordinary population. But more importantly, the most powerful tool of social mobility - education is increasingly a privilege of higher class Britain and government policies are set on widening the gap of opportunities’ availability. New migration rules with the abolishment of UK university graduates visas restricts the skilled labour supply from abroad. Will Britain come to regret its human capital policies?






Addendum (by Guo): The plots below are from the OECD Report "Going for Growth 2010" and underline Velichka's point with data. While the UK (or GBR) does perform relatively bad in terms of low intergenerational earnings mobility, the picture is less clear on other measures: I was rather surprised to see that persistence in tertiary education (i.e. if your parents went to university, you are more likely to get a degree yourself) is as bad in Sweden as in UK. I'll leave it to the labour economists, not sure how they got to these estimates. 

Saints marching in 1590-2009

Barro and his wife just published a paper on the "economics" of beatification and canonization. 

The Catholic Church has been making saints for centuries, typically in a two-stage process featuring beatification and canonization. We analyze determinants of rates of beatification and canonization (for non-martyrs) over time and across six world regions. The research uses a recently assembled data set on numbers and characteristics of beatifieds and saints chosen since 1590. We classify these blessed persons regionally in accordance with residence at death. These data are combined with time-series estimates of regional populations of Catholics, broadly-defined Protestants, Orthodox, and Evangelicals (mostly a sub-set of Protestants). Regression estimates indicate that the canonization rate depends strongly on the number of candidates, gauged by a region’s stock of beatifieds who have not yet been canonized. The beatification rate depends positively on the region’s stock of persons previously canonized. The last two popes, John Paul II and Benedict XVI (the only non-Italians in our sample), are outliers, choosing blessed persons at a much higher rate than that of their predecessors. Since around 1900, the naming of blessed persons seems to reflect a response by the Catholic Church to competition from Protestantism or Evangelicalism. We find no evidence, at least since 1590, of competition between the Catholic and Orthodox Churches.

Aid reloaded

Few days ago, I sent my 14 MB dataset to Gregor (who did the major Flash programming for the Energy app) - after some number crunching, he came up with a pretty neat visualization in Processing.

The geopolitics of aid

Currently working on the geopolitical determinants of aid allocation, I have been exploring the dyadic data on aid and political alliances the last few days - the plot I uploaded shows nothing new, but I still thought it might be entertaining to share this with you (I surely enjoyed this). So, what was the point of development aid again? Promotion of economic development and welfare? I wonder if bombs count as development assistance?

And yes, these are only correlations, but I don't think I need an IV for a causal interpretation......