Brad DeLong's Semi-Daily Journal (2004)

Is the purpose of the European currency union to promote intra-european trade? If so, these results look like good news. If, however, the purpose was to improve the lives of Europeans, on average over time, the results are ambiguous. The interesting comparison is among currency unions with very limited geographic mobility of labor.

there's limited mobility of labor in Europe? I could have sworn there were marked movements of laborers from the south to the north over various portions of the last fifty years.

Is Andrew Rose still the worst professor at Haas?

Intellectually dishonest, all hand waving, patronizing, a real gem.

What a tool.

I don't know who prof Rose is, or whether he is a "tool" or not. But I didn't know economists were allowed to use meta-analysis these days. What a statistical swamp that must be, with all those regressions on observational data and every study doing statistical adjustment in its own, probably ad hoc, way. When we can do randomized controlled trials in economics and finance, or get some kind of agreement on what variables belong in a given regression equation, then maybe... But I will check out that paper to see what he did. Wow, meta-analysis meets economics! Does he do a homogeneity of effects test? I gotta check this out.

"there's limited mobility of labor in Europe?"
What´s the definition of "mobility"?
"I could have sworn there were marked movements of laborers from the south to the north over various portions of the last fifty years."
(from the north to the south, before, from the east to the west, now)

"Is Andrew Rose still the worst professor at Haas?"

You should be ashamed of yourself. This is not even worthy of a C grade freshman. From Andy Rose's webpage:

"At Haas, I am currently teaching the ever-popular (check out “Best Course”) core “Macroeconomics in the Global Economy” BA201b and am now on my tenth (count ‘em) year in a row. In 1999 I won the Cheit Award as Teacher of the Year in the Haas MBA program (I was also a finalist in 1993, 1994, 1996, and 2001; check out my “All-Star” rating). I have inspired haiku while teaching the neoclassical growth model (and another while teaching the business cycle model), and also an in-class Bingo game."

I'd love to be able to write that about my teaching, wouldn't you?

Relative Labor Mobility: The coefficient of variation of average 2003 unemployment rates was 0.10 for the nine U.S. census regions. For the 12 EMU member countries the comparable statistic was 0.36.

There is not much doubt that labor mobility is greater in the US. But that need not imply that the benefits of greater intra-European trade won't (and haven't for that matter!) outweigh their potential costs (especially in the context of a relatively generous social safety net.) There is also the issue of how intra-European immigrigation and labor mobility could be endogenous to European integration in a large sense, as people (young folks especially) feel less and less like their emmigrating when they seek work in another European member state. Just an hypothesis, though.

I remember when there was a labor problem in france a few years ago, young french people came to england to work, with the double motive of employment, and improving language skills. With the chunnel, some could even go home frequently. There was a popular program some years ago of brit consruction workers, in germany.

Last year's average unemployment rate in the U.K. was 5.0%. In France it was 9.4%.

From the statistical data of the 2000 U.S. Census:
West Virginia : 6.6%
Iowa : 2.5%
And that was 2000!

http://encyclopedia.thefreedictionary.com/List%20of%20U.S.%20states%20by%20unemployment%20rate

P.S... and the same country, same laws, and same language etc.

Year 2000 Average Unemployment Rate:

Spain: 11.3%
Luxembourg: 2.3%

The real point is that there are costs as well as benefits of a currency union. The benefits are well understood; increased efficiency through decreased hedging costs, etc. The costs have gotten less attention, I think.

One of the costs is that macroeconomic adjustments can take longer than they would have otherwise if the government gives up one (or both) of its main policy instruments. This is true across U.S. regions, although we're not used to thinking that way. But I wonder whether the prolonged California recession of the early 1990s might not have ended a year or so earlier than it did if the State could have operated its own monetary policy. [In fact it started to try when the State government ran out of cash and, for a brief period, began issuing scrip to vendors and employees.]

In Europe it seems to me that the Germans, still dealing with the costs of reunification and facing increased competition from the east, are bearing a substantial part of the cost of the monetary union. Has anyone measured the welfare cost of not being able to devalue the mark?

Popular is not equal to good teaching.

And it's never been clear to me that students are teh best judges of the best course.

This is the school that at the height of the bubble was teaching us about efficient markets and how there could be no such thing as stock speculation. And the school that brought us Black Monday 1987.

At Haas (and I speak as an Alum) the MBAs are treated and taught to as children. Calculus is required for admission, but never actually used in class. In fact, in micro, the course spent two weeks using deltas and slopes to determine the price equation, when 30 seconds of calculus was all that was required, and that amount of calculus was in fact required for admission.

And Andy was the worst of the bunch. ISLM curves? Taught solely through handwaving and memorization and the quicker the better so he could regale us of his good time at the basketball game teh night before.

Crap that was not worthy of a freshman.

Well... the article was a meta-analysis, so whether this guy is a tool or a fool, or spends too much time or puts too much emphasis on teaching (like that is a sin or something!), or tries to be too jolly and hip in his online CV is beside the point.

What matters is whether he applied meta-analytic techniques correctly. I have to admit that I am suspicious of the methodology when the data are parameters estimated using ad hoc regression equations that rely on observational data (and this is macro, so what else do we have?) But I will suspend judgement until I can read the thing -I am too cheap right now to order it from the NBER, so will have to wait for library trip.

But it looks like he at least tried to be conscientious: "c) the estimates are heterogeneous and not consistently tied to most features of the studies." so I take back my comment about whether he tested for the homogeneity of effect size tests. So we should be complaining the Prof D -who seemed to quote a range of effect sizes as if the estimates came from one underlying distribution across studies, which item c in the abstract clearly indicates that it does not. Thought the fact that it did not seem to be related to individual study designs or methods using the (I guess) the standard meta-analytic tricks, we have no idea where the heterogeneity comes from.

It would be interesting to see if all the individual observations used in the studies could be recovered and used for a meta-analysis. The newest bell and whistle in meta-analysis for experimental and clinical studies.

For what it is worth (and to be honest, that is probably not much) I agree with most of the posters regarding unemployment rates in the EU. They are a product of many factors, not just labor policies that are more people friendly. All the factors should take that into account. But, try to do a meta-analysis on that!

If some one could develope meta-analytic techniques appropriate for macro-economics, wow that would be maybe worth a big prize or something! Of course, findng the philosopher's stone would be worth a prize too.

I think every modern philosopher worth his salt has "discovered" that the philosopher's stone does not and can not exist, so, unfortunately, there's no prize for that. Though, if they could come up with a more predictively accurate astrology,...

Economic forecasting! As accurate and predictive astrology as you can have! And just as easy to master. And comes in just as many varieties, one for every temperment. How many philosopher's stones do you want, anyway?

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