Thursday, August 26, 2010

Friday quick links

On personal freedoms, litigation, and common sense (a good read)

Did he really say thatChris Joye, optimist, reckons that stability and continuity are valuable things for an economy that is hesitantly emerging from the global financial crisis and about to embark on a period of above-trend growth

Does light rail improve public health? This study has results showing obesity declining in areas serviced by light rail in a before and after comparison.

In the spirit of the competition series running this month I thought it opportune to comment on Sam Wylie’s recent article on reciprocal obligations of banks following government support.  Thinking about the whole story makes the situation seems ridiculous.  The government privatises the banking system, allowing privately owned businesses to determine the money supply, and then bails them out after a crash which resulted from their undue risk taking, then left them to go on their merry way to make abnormally high profits once again.  Clearly, there is no moral hazard here and this wonderful situation is highly beneficial for the people.

Can you draw a conclusion about the impact of population growth on economic welfare from this graph? 


  1. Would GDP per head of population be a better measure? The graph does show a general trend upwards with higher population growths, but there seems to be a lot of variation in results.

    It doesn't really tell us if it's making the lives of individual citizens better or worse, which is the aim after all.

  2. Exactly. If population growth was 2% and GDP growth was 2% you are equally as well off in per capita terms as the place with zero population growth and zero GDP growth. Of course there is a positive relationship but it doesn't mean anything as you've noted.

    My second problem is that it measures nominal rather than real GDP. Given that many of the low population growth countries have low inflation (Japan has some deflation), their real GDP growth figure will be higher. And of course, vice-versa for high population growth, high inflation countries.

    When you adjust for these things, the relationship is inverted -