Tuesday 24 July 2012

Three questions to European leaders

I have been asked to prepare a short question for the european summit in October. I have prepared three. They are broad and purposely rethorical to quench my impatience.

To date the Eurozone is the most highly civilized arrangement between former warring states to provide public goods of primary importance: peace and prosperity. By constructing  the Union, Europeans, want to maintain their status of paragon among other regions of the planet. 
Can you describe what would be the consequences for the international order of a failure of the European project?

Do you think that the current institutional framework is able to provide for consistent macroeconomic policies in periods of calm and rapid and responsible decisions during period of crisis, or is it prone to free-riding behavior and naive "fallacy of composition" analysis by individual members?

The current narrative ascribes the incapacity of European leaders to agree to the war between two world views. It is again the old dispute between the short run and the long run. (Strangely enough we had been taught that the dispute had been settled by the Samuelsonian neoclassical synthesis.) When do you think European leaders will present and offer a shared analytical framework on the economic functioning of the Eurozone?

Tuesday 17 July 2012

4th revision update

the new documents from troika on Portugal, are available here, from the site of the Portuguese Government.

Monday 9 July 2012

An update on wage adjustment

I am still looking for the quarterly time-series but I have managed to find data on General Government employment for 2010 and 2011. This was useful to compute the average compensation inflation (click to enlarge the graph) in the public (blue line) and private sectors (green line). So far the adjustment for the total economy (red line) came in large part from the public sector.

Friday 6 July 2012

Public and Private compensation query

Query: I am trying to compute a measure of private labour compensation inflation. So far I have been unable to find quarterly data to subtract General Government (GG) compensation from Total Economy (TE) compensation. The annual national accounts by branches (Eurostat/INE) presents the data for the TE and the GG although GG employment ends in 2009. Does anyone knows where to find updated and quarterly data?

Bt the way: the graph above shows: 1) an average compensation premium of 1.95 for GG workers (obviously characteristics are different), 2) similar inflation compensation until 2009 (GG average 4.6, TE average 4.35, correlation 0.75), 3) a declining share of GG employees.