Monday, April 30, 2007


Alex Tabarrok nails it. Which is the correct unit to evaluate the welfare gains of trade? The nation or the world? Economist- says Alex - tend to answer that the nation is the relevant unit and forget that the geographical criteria is just one among many to aggregate individuals. Perfect.

Spatial Econometrics Conference 2007


New Economy Geography Textbooks

  • Krugman, Venables and Fujita. The Spatial Economy: It a great book, so people say. Unfortunately I can not understand it. File under "books that I pretend to have read".
  • Fujita and Thisse. Economics of Agglomeration: Easier than Spatial Economy, but still too technical for my limited mathematical skills. Also, it is not really comprehensive and it doesn't cover the NEG empirical issues.
  • Baldwin et al. Economic Geography and Public Policy: Impressive book. They simplify New Economic Geography models, making them tractable and able to shed lights on public policy issues.
  • Brakman et al. An Introduction to Geographical Economics: Perfect. Not too demanding, not too simple. Comprehensive, it elegantly covers theory and empirics of NEG. It should be the first step to anyone interested in New Economic Geography. Highly recommended.

Sunday, April 29, 2007

Knowledge and the Wealth of the Nations

The title of the book is misleading. I would suggest: "How and why Paul Romer saved Economics" or "Paul Romer, the new Adam Smith"...This would reflect the general tone of the book. The book is, in fact, a history of recent Economic Thought on Growth, but David Warsh tries to convince the reader that everything before Romer was just a sketch of his 1990 and 1996 papers. Anyway, it worths reading: lots of gossips and an a quite comprehensive view of the recent debates about the theory of economic growth.

Saturday, April 28, 2007

Why did Lula win?

"It is the economy, companheiro!": an empirical analysis of Lula’s re-election based on municipal data
André Carraro – UFPel
Ari Francisco de Araújo Junior- IBMEC/MG
Otávio Menezes Damé – UFPel
Leonardo Monteiro Monasterio – UFPel
Cláudio Djissey Shikida – IBMEC/MG
Comments are welcome! (a Portuguese version of the paper is available here).
UPDATE: The English version has been removed due to restrictions imposed by the journal that we submitted the paper. Sorry.

Applied Economics of Happiness in Four Steps

Step 1 - Watch this Herman Düne clip;
Step 2 - Listen to Jeffrey Sachs' third Reith Lecture (do not listen to the questions);
Step 3- Watch this clip (it is the same as #1, but this is the "in progress" version, with green men moving around);
Step 4- There is no step 4.

A Coasean Transaction

A picture supposedly taken in Rio de Janeiro. It says something like this:
"Dear thief, I would like to ask you to sell me the goods that are you are going to steal from me.
Buying it legally on the market is too expensive, and I've heard that you sell my goods for cheap prices. I promise secrecy, because I do not want to be arrested for buying stolen goods.
PS: Please, do not steal this banner."

Friday, April 27, 2007

An Economist in Paradise

Fazeer Sheik Rahim's blog is one of the best Economics blogs around. Unfortunately, it is not popular and he doesn't update it frequently.

Why do I blog?

A friend asked me why do I blog. I could give him several explanations, but the real reason is structured procrastination. My next research task is really boring: check the shape files of Brazilian counties from 1872 to 2000. A pain in the a**. Therefore I create new tasks to postpone this one. I procrastinate and, at the same time, I fell productive.
It is not the best productivity method, but it works.

Thursday, April 26, 2007

Cliometrics at LSE

Fêlipe Tâmega Fernandes e Neil Cummings, graduate students at the LSE Department of Economic History, organize a seminar on Cliometrics. On May 25th I am going to present the results of the research that I am doing with Eustáquio Reis (IPEA) about location in Brazil (1872-1920).
Felipe, by the way, is a young and an outstanding Brazilian researcher. I am sure that you will see his papers soon in the pages of the Journal of Economic History.

Wednesday, April 25, 2007

Coatsworth versus Engerman & Sokollof

The Engerman & Sokollof thesis ("Factor Endowments, Institutions, and Differential Paths of Growth among New World Economies", published for the first time in How Latin America Fell Behind) asserts that factor endowments determined the development of the New World. The initial concentration of wealth in Hispanic America led to institutions that kept these societies unequal and restrained the economic growth.
I do believe in their story. My faith, however, has been shaken by the paper:

Coatsworth, John "Structures, Endowments, and Institutions in Economic History of Latin America". Latin American Research Review; 2005, Vol. 40 Issue 3, p. 126-144.

He presents many criticisms, but the main one is that the concentration of land in Hispanic America was not much higher than in the British colonies or even England (!!!). Surely, the issue will not be settled soon, but Coatsworth's paper is really insightful and a an absolute must.

Tuesday, April 24, 2007

Friedman is wrong

There is free lunch. Roughly 3 times a week I have lunch at the Hare-Krishna stall. They park near SOAS and offer their vegan food for free. There is no need to talk nor to listen to their lessons. The food is ok. Mainly carbs and, sometimes, I have to eat real food soon afterwards. But a back of the envelope sum says that I've saved about 400 pounds in year. BTW, I am not the only bloke that relied on Hare-Krishna's services.

Monday, April 23, 2007

The 2007 best paper on Brazilian Economic History

William Summerhill sent the paper to me and it is available on-line now. I have a few comments and suggestions, but at the end of the day it is an excellent paper:
Rent Seeking and the Unveiling of ‘De Facto’ Institutions: Development and Colonial Heritage within Brazil

Joana Naritomi
Rodrigo R. Soares
Juliano J. Assunção

This paper analyzes the roots and implications of variations in de facto institutions, within a constant de jure institutional setting. We explore the role of rent-seeking episodes in colonial Brazil as determinants of the quality of current local institutions, and argue that this variation reveals a de facto dimension of institutional quality. We show that municipalities with origins tracing back to the sugar-cane colonial cycle – characterized by a polarized and oligarchic socioeconomic structure – display today more inequality in the distribution of land.
Municipalities with origins tracing back to the gold colonial cycle – characterized by an over-bureaucratic and heavily intervening presence of the Portuguese state – display today worse governance practices and less access to justice. Using variables created from the rent-seeking colonial episodes as instruments to current institutions, we show that local governance and access to justice are significantly related to long-term development across Brazilian municipalities

Easterly on Wolfowitz

William Easterly, the author of the excellent Elusive Quest for Growth, writes about the Wolfowitz Affair. Instead of gossips, he analyzes the identity crisis of the World Bank.

Saturday, April 21, 2007

Engauge Digitizer

It's easy to create a graph from a spreadsheet. But how about the other way round? With Engauge Digitizer you can convert graphs to numbers and save the data in excel or csv format. Very useful and it is free!

Gregory Clark

How about a 4h 30m video of a Gregory Clark's seminar? It is not really that long when you consider that the topic of the talk is economic growth since 10,000 B.C. Watch it and wait for the book.