brick inflation vs. green inflation

Screenshot 2020-02-05 at 14.24.57

Central banks have a problem, they can’t create inflation. ECB is the worst plagued by that.

So the Chief Economist Lane suggests to add real estate costs to CPI and pump up inflation accordingly, real estate markets are in a bull run Philip Lane, the ECB’s chief economist, has been even more specific. “We at the ECB would agree that there should be more weight on housing,” Read more at: https://www.bloombergquint.com/gadfly/why-your-housing-costs-matter-to-christine-lagarde-and-the-ecb Copyright © BloombergQuint

ECB Chief Lagarde does not mention inflation at all but only green. Decarbonization would be a great way to add some inflation to the system

A carbon tax is more or less an oil shock where the surplus stay in the domestic economic rather than flying to Saudi Arabia. Carbon tax would make great financial sense if the target is higher inflation (of course it will shock the economy, reallocate resources among economic sectors, offer various option on how to redistribute the increased taxes imagine a carbon dividend for example) So a green oil shock would serve many purposes and open up many dimensions of public policy

Green QE story https://ftalphaville.ft.com/2019/12/17/1576593138000/Green-QE-is-about-more-than-buying-climate-friendly-bonds/

 

tech people fixation with tunnels

“for example, when New York decided to build the subway in 1900: 4.7 years later, they opened 23 subway stations, and in 2019 dollars, they spent just over a billion dollars doing so. So 23 stations, just over a billion dollars”

Relative abundances and scarcities define the economic times, I would for example expect that NY 1900 would be abundant of  cheap workforce employable at very flexible terms, which I am sure it is not true today where most people works in services and with much higher protections on the job

The quote was from Patrick Collison, founder of Stripe in a chat with Tyler Cowen and Mark Zuckerberg https://medium.com/conversations-with-tyler/mark-zuckerberg-interviews-patrick-collison-and-tyler-cowen-on-the-nature-and-causes-of-progress-30de2e2c48f2

My opinion is just general but I think in the right direction. one has to understand what drives development and growth, and today it’s not what it was 120 years ago. In 50 times someone will muse the good old days when Mark could amass 2 billion users in 15 years while now no matter how much money you spend you might expect just 2 o 3 hunderd millions. Oh cruel times, we are so bad compared to the intenret pionners, glossing over the fact that the users will have much more protection from spam and aggressive marketing (yeah, pipedream)

gullible, unprotected users is the relative abundance of our times

link full of tunnels prices https://nypost.com/2018/08/25/why-nyc-is-priciest-city-in-the-world-for-infrastructure-projects/

I said tech people fixation with tunnels, let’s not forget that one day Musk, frustrated with the time it takes to build tunnels today, bought a boring machine and started digging a hole under his company’s parking.

Yes! Tyler Cowen on Subway Cost Desease

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Wealth and charity US

Rich people propensity to philanthropy same as general population, exceptions Buffet & Gates

Bezos tax rate is )% it is extreme but most 0,01% rich pay less

Hub and peryphery, a thought experiment

by the Richmond Fed, which states optimal to move less productive workers out of high-productivity hubs and give them UBI of 17,000$ rather than investing money into peryphery project in order to reduce growing income gapScreenshot 2019-11-11 at 19.07.36

the authors note how CNR or Cognitive non-routine workers are more productive while clustered together so instead of trying to lure them away from hubs where they would become inevitably less productive is better to lure away non CNR from hubs with a subsidy.

This is an economic thought experiment, in a political void, nonetheless there is a clear insight in how to spend development money in the periphery, do not try to create works, just give money away.

Click to access wp19-16.pdf

Tax evasion Eu and Italy

reports and charts

VAT Gap https://ec.europa.eu/taxation_customs/sites/taxation/files/vat-gap-full-report-2019_en.pdf

International tax evasion https://ec.europa.eu/taxation_customs/sites/taxation/files/2019-taxation-papers-76.pdf

Tax evasion Europe with corporate tax estimate https://www.socialistsanddemocrats.eu/sites/default/files/2019-01/the_european_tax_gap_en_190123.pdf

Italian report from MEF (ministry finance) http://www.mef.gov.it/documenti-allegati/2018/A6_-_Relazione_evasione_fiscale_e_contributiva.pdf

Screenshot 2019-10-17 at 12.34.24

The US tax regressivity spat

adding a data point for the top 400 make the curve collapse in 2018, it is a graphic trick but also substantial

they have been fighting on it for days, looks like national accounting is complex and prone to interpretation though sometimes you see economists meddling up waters in this politically charge issue

Being paid in stocks and income inequality

a study argues that 60% of income inequality rise in recent years can be explained with  smart professionals being rewarded in stocks rather than cash, so productivity gains of fast growing companies would accrue to this new kind of “human capitalists” and taken away from the high-skilled labor share, which indeed has been decresing over time

https://marginalrevolution.com/marginalrevolution/2019/07/human-capitalists.html