tag:blogger.com,1999:blog-51494127490954416112012-02-14T15:32:45.437+08:00On how social order and the economy interact, with a focus on the Philippines.Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.comBlogger291100tag:blogger.com,1999:blog-5149412749095441611.post-57042653885848586502009-07-17T03:23:00.002+08:002009-07-17T10:10:22.096+08:00

...

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com2tag:blogger.com,1999:blog-5149412749095441611.post-27802505423175874002009-06-17T09:22:00.021+08:002009-06-17T10:56:33.093+08:00

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Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-11466156187660338782009-06-07T19:37:00.005+08:002009-06-09T17:07:22.079+08:00

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-28362744242992747862009-06-07T15:23:00.007+08:002009-06-07T20:09:29.434+08:00

This is a dedicated post, not a dessicated one..Paul McCartney has a solo version here.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-14007328627668374572009-06-05T09:29:00.003+08:002009-06-05T19:00:32.631+08:00

Check this out if you love bongos!

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com1tag:blogger.com,1999:blog-5149412749095441611.post-90831626750919291182009-02-25T00:53:00.004+08:002009-03-05T23:10:41.430+08:00

I comment here on a proposal by Woodward and Hall that seems to provide a "costless" way to solve the toxic-asset problem of banks in the US.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-18597120094555691432009-02-24T22:24:00.002+08:002009-03-05T23:11:00.430+08:00

Here is how I lecture on the topic of defining economics.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-11290932817115694322009-02-24T02:27:00.004+08:002009-02-24T02:33:22.081+08:00

What's with the recent Moody's rating on Philippine bonds? Here's a comment on its enigmatic nature.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-23096954853022504732009-02-22T18:25:00.003+08:002009-02-22T18:28:04.988+08:00

I discuss the difficulties of reckoning the impact of the global crisis on OFW remittances and the domestic economy in my other site.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-16846041643531715782009-02-21T23:05:00.002+08:002009-02-21T23:12:06.559+08:00

See my new post on this topic.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-12996052183310647522009-02-20T21:18:00.003+08:002009-02-20T21:20:39.339+08:00

See my piece in the Daily Tribune of Feb. 12, 2009.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-33800736817245519562009-02-10T15:35:00.002+08:002009-02-20T21:21:36.603+08:00

See my new post here.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-49429211764448428082009-02-08T09:30:00.001+08:002009-02-08T09:32:37.203+08:00

Keynes is right in the short run, but the Austrians think “what next”? Start at full employment, and “animal spirits” cut investment. If prices-wages are sticky downward, then you have a multiplier of 4 if consumers save 25% of income. Example: I falls by 2, so Y falls by 8. Let the INITIAL full-employment data be: C=70, I=10, and G=20. If I falls by 2, the RECESSION data must be: C=64, I=8,

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-75155168489936886182009-02-06T23:57:00.006+08:002009-02-07T01:29:50.085+08:00

The debate on the proper stimulus in today’s global crisis rages between two disparate schools of thought – Keynesians (considered as the orthodox economists) and the Austrian school (which emphasizes libertarian values).The Keynesian view is that unemployment stems from inadequacy of aggregate demand, amidst "sticky" wages and prices. Accordingly, the remedy is for the government to make up for

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-45065944061992465692009-02-06T04:30:00.012+08:002009-02-07T01:12:16.348+08:00

Robert P. Murphy at the von Mises blog offers food for sober thought.The Keynesian view is that unemployment stems from inadequacy of aggregate demand, along with "sticky" wages and prices. Accordingly, the remedy is expansionary fiscal and monetary policies to make up for the "lost" aggregate demand. The Austrian school, on the other hand, believes that it is better to do nothing because the

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-4162353480309651702009-02-04T17:08:00.003+08:002009-02-06T03:16:47.659+08:00

In a previous post, I thought that a remedy against a Ponzi using a bank was to limit the interest rate on deposits. But I also surmised that a Ponzi operator might find a way around an interest-rate ceiling. It turns out there is indeed a way. One such possibility is through the use of a “shell” game, using three different entities, all controlled by the operator of the Ponzi: a pre-need firm,

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com2tag:blogger.com,1999:blog-5149412749095441611.post-68852176870270002142009-02-03T13:07:00.001+08:002009-02-07T02:17:14.472+08:00

According to official statements, the “stimulus package” for the Philippine economy involves a total of P330 billion, broken down as follows: P160 billion (budgeted increase of the 2009 budget over 2008), P40 billion from a reduction in taxes (mainly due to a cut in the corporate income tax rate from 35% to 30%), P100 billion (from “a joint undertaking between the government and the private

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As noted in my other piece on rural banks, a Ponzi scheme is one where investors are paid out of money from subsequent investors. As a rule, a Ponzi scheme involves an element of fraud, since the operator of the scheme does not intend to repay the returns promised to all investors, but only to those who participated early in the scheme. What about pre-need firms, some of which have recently

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-56313232154523937292009-02-01T13:00:00.000+08:002009-02-04T20:52:57.751+08:00

Some rural banks have closed, and questions arise as to how this has happened (see, for example, the editorial at a major Philippine daily). One theory is that these failed banks engaged in Ponzi finance, as defined in the theory of financial instability attributed to Hyman Minsky. Another theory is that some of these banks operated a variant of a Ponzi scheme.Ponzi financing is when the

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com3tag:blogger.com,1999:blog-5149412749095441611.post-36485454411639074602009-02-01T11:40:00.001+08:002009-02-05T17:34:04.718+08:00

In the good tradition of David Letterman, here are the "top ten" of economics in the past half-century or so, courtesy of Bryan Caplan.1. Human capital theory2. Rational expectations macroeconomics3. The random walk view of financial markets4. Signaling models5. Public choice theory6. Natural rate models of unemployment7. Time consistency8. The Prisoners' Dilemma, coordination games, and

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-14449840907418038092009-01-31T23:53:00.000+08:002009-02-05T12:42:50.869+08:00

What Charles Kindleberger calls the Minsky model or theory of financial instability of the capitalist economy, proposed by Hyman Minsky in 1975, remains perhaps the best theory for analyzing financial crises. While it cannot be used to predict a crisis, the model at least gives ample warning of the conditions that likely lead to one. Minsky labels three types of finance in the economy (hedge,

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-23273101073856982702009-01-31T08:06:00.000+08:002009-02-01T17:42:55.252+08:00

From the research paper mentioned in the post on the economics of land reform and the wisdom of King Solomon.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.comtag:blogger.com,1999:blog-5149412749095441611.post-84571112393363283272009-01-29T06:24:00.000+08:002009-01-29T19:14:33.502+08:00

The debate arises in part because some economists focus on rationality in the long run, while others (Keynesians et al) focus on irrationality in the short run.It seems the argument that “stimulus” cannot work rests on rational expectations -- people expect that fiscal/monetary expansion now will require fiscal/monetary retrenchment later. In other words, rational expectations defeat Keynesian

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-26544337916795062442009-01-28T23:28:00.001+08:002009-01-31T09:31:37.161+08:00

Land reform has been difficult in large part because land owners and tenant farmers have been in conflict. Owners will give up the land but only at a high price. Tenants, on the other hand, want the land for free along with agricultural support services. The tax payer is caught in between because reform requires public funds. Does reform have to be so difficult and expensive?One solution comes

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-40573112294160435342009-01-26T22:32:00.000+08:002009-01-29T19:15:31.842+08:00

The theme in Elhanan Helpman's book (The Mystery of Economic Growth, 2004; Harvard University Press) is that institutions matter more than anything else when we try to answer the question of why a country is poor. His conclusion is not obvious to many, especially non-economists, and Helpman succeeds only to some extent, though in my view it is not his fault. The field of development economics has

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-19655810817256838842009-01-12T23:17:00.000+08:002009-01-29T19:16:35.455+08:00

Not much, apparently. But this much was concluded by IMF staff in a 2002 working paper (click here). Most of the conclusions also apply to non-sovereign borrowers, and would be relevant to today's financial crisis.1. There is a clear upward or "favorable" bias in favor of the debt issuer. This is evidenced by subsequent "failure" in that the ratings exhibit instability when a debt or

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com0tag:blogger.com,1999:blog-5149412749095441611.post-84814892937705804422009-01-10T03:01:00.000+08:002009-01-12T02:56:19.911+08:00

What happens when we assume that income growth comes from savings (to increase the stock of capital) and from technological progress (at some reasonable rate)? Two economists (Roberto Mariano and Delano Villanueva) did so. Based on recent official data, they conclude that the we should save about 1/3 of GDP to achieve a 5% growth rate in per capita income, which would then double every 13

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com1tag:blogger.com,1999:blog-5149412749095441611.post-10580102619559914722009-01-09T01:38:00.001+08:002009-01-12T02:54:11.062+08:00

Quick take: We're not in a financial crisis, but we're not safe. Even with the best prescription, there is a risk of stagflation.See my article in the Philippine Daily Tribune on January 9, 2009.Click on the title of this post to make or see comments.

Orlando Roncesvalleshttp://www.blogger.com/profile/15787159826210287420noreply@blogger.com1tag:blogger.com,1999:blog-5149412749095441611.post-24126921675818763752008-12-09T21:17:00.000+08:002009-01-12T02:54:51.638+08:00

This is a somewhat perplexing question. Please see my article in the Philippine Daily Tribune (December 6, 2008).The short answer is that we cannot firewall an open economy. We can do some things to make it resilient, but these are long-term fixes. But short-run policy mistakes, such as an overly tight monetary policy and an overvalued exchange rate, will weaken the economy.Of course, we could

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