Practical Economics to Build a Flourishing World

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The Rise of the Tournament Effect

The Rise of the Tournament Effect

“All my movies end this way, baby.”  – Austin Powers, International Man of Mystery (original ending) If you ask a non-Canadian (or even many Canadians) what is Canada’s national sport, they will tell you ice hockey. We are one of the few countries in which the number one sport is not football (soccer), and although...
Booming Surplus is a Sign of Economic Weakness

Booming Surplus is a Sign of Economic Weakness

The Eurozone economy is running an enormous current surplus (current account) of almost Euro 250 billion in 2014. As The Globe and Mail (Canada’s leading national newspaper) rightly points out,1)While the original article is available to subscribers only, this link to breakingnews.com from November 19, 2014 provides a brief abstract of the conclusions of the...
The Labour Market: The Greatest Market Failure Part 2: NEET

The Labour Market: The Greatest Market Failure Part 2: NEET

“When a great many people are unable to find work, unemployment results.” -Calvin Coolidge In the article, The Greatest Market Failure Ever: Part 1, Nevinomics examined how well the labour market functions from the perspective of the individual trying to build a satisfying life over the long term – trying to Flourish, in Nevinomics’ language....
Continuous Income Smoothing

Continuous Income Smoothing

The world is a complex place today, and more and more we seem to live multiple lives. Few people (and even fewer in the future) tread a linear path of education, career, family, and location. Basically, nobody knows what the future will bring. In this type of uncertain environment, a key advantage for the individual...
Poland's Education System and Metacognition

Poland’s Education System and Metacognition

If you think education is expensive, try ignorance. Derek Bok There is nothing more important to the long-term success of a society than the quality of its education. No matter how many natural resources or other endowments a nation has, they cannot compensate for a lack of effective human resources. I am confronted with this...
You Can't Get There From Here

You Can’t Get There From Here

We wanted flying cars. Instead we got 140 characters. – Peter Thiel, Founder of Paypal The Tokyo Metro is a marvel of efficiency and practicality: beautifully clean and well-designed with excellent people flow. There are well-marked exits for the entire area around each station and, remarkably to a Westerner, there are clean and modern comfort...
The Flourishing Index

The Flourishing Index

What is the economy for? In Nevinomics view, the economy should be constructed to maximize individual Flourishing. Here is one obvious policy suggestion: Canada needs a Flourishing index. If Flourishing is our objective, we are not going to improve it unless we decide how to define it more specifically, and then measure it. At the moment,...
Cashless Society in Sweden

Cashless Society in Sweden

Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman. Justice Louis D. Brandeis Nevinomics is in favour of a cashless society. Not only does this reduce transaction costs hugely – moving cash around is very expensive –...
More Infrastructure

More Infrastructure

If you want the economy to work well, a lot of pieces need to come together: high social trust, the rule of law and property rights, and excellent public services among them. Critical to the effective coming together of these components is, of course, an effective infrastructure. (See The Flywheel Effect) One consequence of the...
Do Interest Rates Matter?

Do Interest Rates Matter?

In fact, investment often rises when interest rates go up and volatility increases. – from The Economist Economics is actually starting to Flourish. The GFC has caused a rethink of some of the fundamental assumptions, and young economists are challenging the orthodoxy with empirical studies (the Nevinomics ‘s 1st principle is that Economics is an...
The Max-a-median Principle, With Apologies to Rawls

The Max-a-median Principle, With Apologies to Rawls

It may be expedient but it is not just that some should have less in order that others may prosper. – John Rawls Through the evolutionary process, those who are able to engage in social cooperation of various sorts do better in survival and reproduction. – Robert Nozick When I was at Oxford studying Philosophy...
Optimal RRSP Portfolio

Optimal RRSP Portfolio

Canada has a well-designed retirement policy for individuals: the RRSP (Registered Retirement Savings Plan). Basically, this allows you to save up 18% of your income, deduct it from this year’s taxes, and then have it taxed when withdrawn. There are various guidelines on withdrawals, but compared to other jurisdictions, withdrawal rules are relatively lenient and...