oliver williamson & elinor ostrom will share the 2009 nobel prize in economics.
http://nobelprize.org/nobel_prizes/economics/laureates/2009/
http://www.economist.com/businessfinance/economicsfocus/displaystory.cfm?story_id=14638409
nobel prize 2009: oliver williamson & elinor ostrom
Categorized in new institutional economics
small markets big hierarchies and transaction costs
coase (1937) argued convicingly (albeit somewhat tautologicaly) that when costs of internal organization are less than the costs of using the market, “firms” will prevail. here is a very nice illustration:
in a recent leader, “big is back”, the economist (29/ix/09, p9) ,argues that two forces has helped the re-emergence of large corporations:
1. costs of the “market” increase:
“…a heightened awareness of the risks of subcontracting. Toy companies and pet-food firms alike have found that their brands can be tainted if their suppliers (notably, from China) turn out shoddy goods. Big industrial companies have learned that their production cycles can be disrupted if contractors are not up to the mark. Boeing, once a champion of outsourcing, has been forced to take over faltering suppliers.”
2. costs of internal organization decrease:
“…the emergence of companies that have discovered how to be entrepreneurial as well as big. These giants are getting better at minimising the costs of size (such as longer, more complex chains of managerial command) while exploiting its advantages (such as presence in several markets and access to a large talent pool).”
hence: when transaction costs of markets increase and those of internal organization decrease, hierarchies prevail
what is interesting is that there is not a trace of the key word “transaction cost” anywhere
http://www.economist.com/opinion/displayStory.cfm?story_id=14303582&source=hptextfeature
Categorized in new institutional economics
logicomix
my friend nicos from auth gave me this book in greek. it has been originally written in english and is now translated into many languages. writen as a comix, it is the fascinating story of the quest for truth through science. magnificent book! it follows the lives and main contributions of the great mathematicians. the ending of the book is incredible and unpredictable: the oresteia – the tragic position of man against his fate and the universal truth.
www.logicomix.com
Categorized in BOOKS
on methodology and models
el greco made the following note for his magnificent 1610 painting view and plan of toledo
it has been necessary to show the hospital de tavera as a model, for the building hides the visagra gate, and the dome obscures part of the town, and once treated as a model and moved from its place, it seemed better to me to show the main façade . . . the rest, and its proper relationship to the town can be seen on the map.
link to the el greco foundation
Categorized in ECONOMICS
upside down: butter mountains again…?
the cap on dairy is turning upside down again
after a period of high food (and milk) prices, dairy farmers are facing low price for their product. the european dairy lobby group (eda) is pushing for a subsidy on storrage for butter and dry milk. we may see those infamous butter mountains dominating the european landscape again ?
Categorized in -food prices
paul krugman 2008 nobel laureate
paul krugman: an economists’ economist is the 2008 nobel laureate
“a funny thing happened to me this morning”
this is how paul krugman announced his award in his nyt blog on oct 13 this year
i am trying to hung things on this blog that students are not likely to view in their every day search. i assumed, therefore, that just everybody who studies economics would know who was this year’s nobel laureate. i was surprised to find that no-one in my friday class knew that this year it was paul krugman – an economists’ economist. this is not necessarily the students’ fault, it is mainly the teachers’ (myself in this case) – or simply that a nobel prize in economics is not as glorious as – say eight golds in the beijing olympics (or an olympic gold in sailing with someone else’s dinghy – to put it in danish terms).
paul krugman was awarded the prize “for his analysis of trade patterns and location of economic activity”. in short krugman put together a theory of international trade that takes into account economies of scale. this is mainly what “new trade theory” is about, together with the importance of market structure. it is in addition to the main theories of int. trade: ricardo’s comparative advantage, and the heckscher-ohlin-samuelson theory of relative resource endowment.
i wouldn’t put this post and these links only because i am a big pk fun – which i am – but i find some of his writings very stimulating and a very good guide and inspiration to young economists:
the official nobel site: http://nobelprize.org/nobel_prizes/economics/laureates/2008/
a recent interview: http://www.charlierose.com/shows/2008/10/23/1/a-conversation-with-paul-krugman-2008-nobel-prize-winner-economics
paul krugman’s blog in the nyt: http://krugman.blogs.nytimes.com/
his autobiographical sketch – or how pk became pk: http://www.princeton.edu/~pkrugman/incidents.html
how does pk work: http://www.princeton.edu/~pkrugman/howiwork.html
a note on new trade theory and k lancaster: http://www.slate.com/?id=33334
a list of all economic laureates: http://nobelprize.org/nobel_prizes/economics/laureates/
Categorized in ECONOMICS
cartel whistlers in the blue saloon
it is well-known that industrial economists are like forensic experts where they find evidence of cartelization and other anti-competitive behavior, on the “dead bodies” of high prices, irregular flactuations – all dug out of data. some times, however, it is simple detective tecniques, and meare “prisoner’s dilema” setups, where those that tell on their cartel partners are offered some strong incentives. the act of telling on your cartel friends is known as “whistle blowing” and the ransom is termed “leniency notice”. two recent cases from the european competition authority are worth looking at:
1.
the eu competition authority charged banana trading companies a fine of €60.3 million accusing them for price fixing. companies like, chiquita, dole, weicherd (controled by del monte) were discussing prices ahead of announced weekly price quotations:
“on numerous occasions over the three year period there were bilateral phone calls among the companies, usually the day before they set their price. during these calls the companies discussed or disclosed their pricing intentions: how they saw the price evolving or whether they intended to maintain, increase or decrease the quotation price” (eu report).
the cartel was disclosed after chiquita decided to tell on its partners (”whistle blowing”) and be given immunity (otherwise it would have been charged for €83 million. read also an FT article on this: http://www.ft.com/cms/s/0/79de362e-9ae2-11dd-a653-000077b07658.html
2.
the banana cartel was not the only one. paraffin producers were also found guilty of price fixing. exxonmobil, mol, repsol, sasol, shell were all found guilty. the whistle blowers in this occasion were: “sasol (south africa and germany), repsol (spain), and exxonmobil (usa), [which] were granted a reduction of their fines of 50%, 25% and 7% respectively” (eu report)
“in the shell group, the cartel was called “paraffin mafia” and in the sasol group, “blauer salon” (“blue saloon”), after a hotel bar in germany where the first meetings of the cartel took place. subsequent meetings took place at a series of top hotels all over europe, including milan, vienna, budapest, paris, munich and strasbourg”
Categorized in -competition, FOOD INDUSTRY
gm: generally misunderstood food
turkey planet by john pritchett
genetically modified (gm) food is generally misunderstood
a recent (eu-funded) study led by vivian moses fron king’s college found new results with a asimple, and yet innovative methodology. the study released yesterday, found that european consumers do actually buy gm (genetically modified) foods but many of them don’t even know that they do so. the innovativeness in the methodology of this study was that they actually interviewed the consumers after they purchased the food and not before. the study results were striking: “nearly half of the people who bought gm-labelled foods said they would not buy such products, while 30% of consumers buying them did not know whether they had bought them”.
download the report here:
http://www.kcl.ac.uk/schools/biohealth/research/nutritional/consumerchoice
find comments and popular articles:
http://www.euractiv.com/en/cap/study-europeans-unconcerned-gm-foods/article-176364
http://www.foodanddrinkeurope.com/Consumer-Trends/European-shoppers-do-not-steer-clear-of-GM-labels-says-study/?c=4wbUlkUvhFpM7SZQ8VXFWA%3D%3D
is gm the solution? yes: http://www.abcinformation.org/
is gm the solution? no: http://www.foe.co.uk/campaigns/real_food/index.html
nestle’s forum on gm : http://www.ft.com/cms/s/0/25020ee0-4098-11dd-bd48-0000779fd2ac.html
Categorized in -gmo
Toys-R-Not-US: repercussions of the crisis around the world
.
when the crises hits the demand side, the supply side is doomed to suffer eventually. the crisis hit china right away:
from ap and cnn: china says its economic growth slowed to 9 percent in the third quarter of this year, reflecting the growing toll from the global financial crisis. the national statistics bureau announced monday that economic growth in the first nine months of the year rose 9.9 percent over the same period a year earlier. that compares with 11.9 percent growth in 2007. also from cnn on the closure of a toy factory.
Categorized in -food prices, GREAT Crash II
food prices: world grain production hits record high!
world grain production hits the roof according to the usda latest (10/X/08) estimates:
“world wheat production for 2008/09 was projected up 3.9 million tons this month to a
record 680.2 million, with the largest increases for canada, the united states, russia,
and ukraine. global beginning stocks increased 1.3 million tons, also boosting 2008/09
supplies”
future prices are down too: check december wheat futures from the ft: http://markets.ft.com/tearsheets/performance.asp?s=us@w.1
here are some very good source of info on food crisis from the ft:
http://media.ft.com/cms/s/2/f5bd920c-975b-11dc-9e08-0000779fd2ac.html?from=foodcrisis
http://www.ft.com/cms/s/0/d8184634-07cc-11dd-a922-0000779fd2ac.html?from=text
Categorized in -food prices