Chris Edmond
@chrisedmond
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Professor of Economics, University of Melbourne
Melbourne, Australia
Joined December 2008
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Speaking of the macro costs of oligopoly, pretty excited this bad boy will be in print soon....
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Can we now put the whole Sweden thing to bed?
Swedish GDP in the quarter to June 2020 fell by 8.3%. According to the national accounts just released, Australian GDP over the same period fell by 7.0%. Better (less bad) economic outcomes and far far better health outcomes.
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#QandA
this is nonsense from Foster. An embarrassment to my profession. So angry that her fringe views are given this platform
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A few people have suggested I should respond directly to Professor Foster's arguments on
#qanda
last night rather than just saying I was appalled.
I thought the other panelists did an excellent job of explaining why her arguments were unsound. There's no need to say more.
But.
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It is just mind-blowing that for all the journalistic chatter about "greedflation" the correlation between firm-markups [profit margins] and industry-level inflation is basically zero.
@conlon_chris
(with Nathan Miller, Tsolmon Otgon, and Yi Yao) study the correlation between changes in firm-level markups and changes in industry-level prices, finding little to no relationship.
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We have not gone too far on social restrictions. We should not "put the economy first". Idea of trade off between public health and the economy rejected by Australia's top economists. Open letter here
@profholden
@SHamiltonian
@BruceJPreston
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This from Professor Foster is obviously offensive. But beyond that it's simply flat out wrong on the economics. Hours per worker and labour market participation are at record highs.
The problems in the Australian economy are not because workers won't get off their "lazy couch"
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And maybe 80 times worse than Australia. With a similar sized recession. We should be very grateful the government did not listen to those touting the Swedish model.
SWEDEN per capita deaths now WORSE than U.S.
Strangely this stat is not prominent in
@australian
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Note to my economics honours students. I have failed you if you ever give a discussion of wages and productivity as incoherent as this astonishingly inept display by the editor in chief of the AFR (good luck with your exams)
#Insiders
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If your prize-winning article in the top finance journal cannot be replicated and you are forced to retract it, don't throw your junior coauthor under the bus.
If you were happy to have your name on the publication and the prize, you own the data mishandling too.
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@GrogsGamut
Apparently the additional ~4500 Australians who've died literally do not count.
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A year ago today. Practically every creditable Australian economist, spanning the ideological spectrum.
At the risk of excess self congratulation, I think we had the best of this argument. Our opponents have gone very quiet, taken to pretending success was inevitable.
We have not gone too far on social restrictions. We should not "put the economy first". Idea of trade off between public health and the economy rejected by Australia's top economists. Open letter here
@profholden
@SHamiltonian
@BruceJPreston
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If Ken Rogoff isn’t worried about debt, I think we can officially say that **not one economist** is worried about debt right now
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This from the boss is really shallow dumb stuff. So disappointing. Doesn’t seem to have learned even the most elementary things about the economics of the pandemic.
"It would be crazy if, hypothetically, we stop 100 people dying from the virus but over the next two years, 200 people died from poverty and mental health"
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How sad. This is really scraping the bottom of the barrel now. An unstructured, informal trawl of random bits of data is no one’s idea of good statistical work. The embarrassing thing is that Adam seemingly can’t tell that this is schlock.
There Is No Evidence Lockdowns Saved Lives. It Is Indisputable They Caused Great Harm.
A good short read by a US statistician who prefers facts over assertion and moralising.
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How any serious commentator in Australia can look at the world around them and think now is the time to be easing restrictions is beyond me. It beggars belief.
In the U.S. it's like the North Tower is coming down every day. But worse.
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More generally, economists should be more humble.
We should help create *space* for public health experts to craft the policy (as they have been doing with great success) and in light of the health policy help craft economic policies that best mitigate the economic fall out.
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Don't let anyone tell you economic models aren't cool.
Researchers built a database from 4,000-year-old clay tablets, plugged it in to an economic trade model, and used it to pinpoint the potential locations of 11 lost Bronze Age cities.
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Anyone who attempts to reason about anything complex is using *some kind of model*. Anyone who thinks otherwise is deluding themselves.
The only question is whether you understand your own (implicit) model or not.
If you think any econometric model can adequately capture the complexities of that issue, you're deluding yourself (and the punters)
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Are rising profit margins a source of significant inflation amplification? Not according to Australian micro data.
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In my view, as economists, we should be focused on the use of economic tools to mitigate all the suffering caused by this crisis, not just the narrowly economic but also the broader loss of well-being.
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That is what we can best contribute.
We should not be using spurious economic arguments to undermine the views of public health experts.
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We have not gone too far on social restrictions. We should not "put the economy first". Idea of trade off between public health and the economy rejected by Australia's top economists. Open letter here
@profholden
@SHamiltonian
@BruceJPreston
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A few memories of Bob that stick in my mind, in reverse chronological order:
"Your notation made me want to vomit"
[by email, on early draft of Alvarez, Atkeson and Edmond QJE, funny since we copied the notation in his "Money in a Theory of Finance" Carnegie-Rochester paper]
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The PM's claim is laughable.
We would be in a totally different situation lockdown wise if the Morrison government had not failed so badly with vaccine rollout and procurement.
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Turkey: 3.3 times Australia's population. 41 times our mortality rate from COVID.
I guess Adam is moving on from Sweden.
Perhaps Turkey had the most sensible responsible to Covid-19, locking down over 65s in line with the evidence they were most at risk. Death rate 1/6 that of US.
via
@ABC
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I used to think Adam wasn’t really this thick. Now I’m not so sure.
The choice is not between a deep recession or a public health catastrophe. It is a choice between 1) a deep recession vs. 2) a deep recession *and* a public health catastrophe - as in the US, UK, Italy etc.
Here's the modelling that underpinned
#shutdownNOW
and the reality.
Now we have up to $320bn in extra debt, and over a million unemployed. "Proportionate" response?
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Once again: The economic cost of the lockdown is not the same as the cost of the pandemic. The economic cost of the lockdown is the cost relative to the counterfactual of a different lockdown policy. Sad to still see basic economics still so misunderstood
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2) In economic terms, the virus is a deadly negative externality, and a rapidly growing one at that . Because of the negative externality, one cannot expect individually-optimal risk-taking decisions to lead to a socially optimal outcome.
(feels wrong to even use that jargon)
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But fwiw here are some reasons why I think Prof. Foster is wrong.
1) There is no feasible way to quarantine the high-risk, even if one could identify *all* high-risk. Inevitable mixing of the high- and the low-risk would lead to the pandemic devastating the high-risk population
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Actually it’s banal. At this point it’s boring to see the same arguments trotted out by columnists in a dying industry desperate for clicks and views.
Great piece by
@emfarrelly
today.
I hope she's bracing for a torrent of mindless personal abuse and half-wittery.
Coronavirus Australia: The Great Lockdown is a sledgehammer busting dreams.
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#Insiders
budget discussion completely misses the big picture, which is there’s no recovery unless the pandemic is properly controlled. So where’s the mass investment is public health capacity etc? Discussion treating this too much like a deep but otherwise ordinary recession
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Yes, Australia has done very well by ignoring you and the let it rip brigade.
For bonus points, look at what's happened to employment and economic activity. We've done a lot better there too.
Imagine how bad things might have got on either front if you'd had your way.
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4) The precautionary principle suggests that we should be very careful when the the consequences of getting the calculation wrong on one side (a prolonged recession *and* a rampant pandemic) are worse than getting the calculation wrong on the other side (a prolonged recession)
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We now have good evidence on what happens when you try to put the economy first. You have worse economic outcomes *and* worse health outcomes.
#60Mins
We have not gone too far on social restrictions. We should not "put the economy first". Idea of trade off between public health and the economy rejected by Australia's top economists. Open letter here
@profholden
@SHamiltonian
@BruceJPreston
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By contrast, every ARC grant (worth maybe a couple of hundred thousand) goes through a lengthy peer review process with with very tight budgeting controls and intended deliverables. I don’t know whether to laugh or cry
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Some thoughts on profits and inflation, feel free to disregard.
(A) I strongly believe that oligopoly is a big problem for Australia. It helps explain why real wage growth has been low, why productivity is low, and why the real prices of so many goods and services are high.
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Major revision of my paper on the welfare costs of market power distortions with Virgiliu Midrigan and Daniel Yi Xu.
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3) While it is true that one wants to take broad notions of well-being into account when thinking of the costs of the shutdown, one also needs to take broad notions of well-being into account when thinking of the benefits of the shutdown in terms of reduced illness and death.
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An embarrassment to Stanford. And as an economist, I have to say he’s also an embarrassment to the NBER.
The end point of contact tracing in Australia is apparently concentration camps for casual contacts of covid patients, w/no due process for the interred.
Choose: a liberal democracy or a bio-security state focused on covid control.
Thx,
@freddiesayers
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It is not "progressive" to advocate for tighter monetary policy when we are still far from full employment.
Anyone with genuine concern for the disadvantaged should want us to run close to full employment for as long as possible, until we see sustained significant wage gains
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Getting the pandemic under control was the key to getting the economy back on track? Who would have thought!
#insiders
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Are rising profit margins a source of significant inflation amplification? Not according to Australian micro data.
Complete draft of this paper, joint with Monique Champion and Jonathan Hambur now available:
Are rising profit margins a source of significant inflation amplification? Not according to Australian micro data.
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It is misleading to emphasise broad notions of well being only for the costs saved and not for the benefits forgone.
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This dynamic underlies the quantitative results in recent economics papers that find very large economic losses from letting the pandemic get out of control
(please email me if you want a list of such papers)
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It says something about the economic consultants grift in this country that a guy with no training in economics *at all* can claim expertise in economic modelling. It abound go without saying that his claim about the economics of easing restrictions is simply false.
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Adam, as a writer for a paper called "The Australian" you might want to check out this obscure country called Australia that actually *has* had one of the world's most successful responses.
Why do these writers for The Australian hate Australia so much? Downright unpatriotic.
"Isolate the elderly, not everyone":
Turkish ambassador tells The
@australian
Turkey's coronavirus response "one of the most successful".
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You'd think the Oz's economics writer would try not to flaunt his economic illiteracy in public. But you'd be wrong.
(Apart from omitting benefits of suppressing the pandemic, the social cost of govt spending is not headline budget impact but deadweight loss of implied taxes)
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This from the guy who thought France needed a dose of Le Pen.
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As some one who does economic modelling pretty much all day every day (apologies to my family) the fact that a model has “millions of equations” is no good reason to trust it, and frankly probably good reason to not trust it. What an astonishing claim by Fisher.
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Now this I will not take. Lomborg’s background is in *political science*. I may be wrong but I’m not aware of him having a single publication in economics.
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As case numbers take off, never forget that some people were arguing that this is what we should be doing back in April '20 and even June '21 when vaccination rates were low.
If you think the social and economic disruption etc is bad now, imagine what it would have been then.
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With all the focus on the RAT mess, let's not lose sight of the fact that the booster rollout is slooooow.
While overall levels of vaccination in Australia are now relatively high, the booster rollout still lags appreciably behind.
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I wholeheartedly endorse the comments by
@profholden
@JohnQuiggin
here. Migration boosts labour demand and labour supply. If your concern is workplace exploitation, go after that directly not scapegoating immigrants.
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People who think themselves free of the tyranny of unrealistic models are, usually, in my experience, prisoners of endless conceptual mistakes, internal inconsistencies, and motivated reasoning.
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Even though it is imperfect, wage subsidies like JobKeeper are a part of such response. But there are many other things we can do to improve the safety net.
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The ALP should grab the opportunity to kill "debt and deficits" mania forever, instead we get this pathetic attempt to nail the govt on a hypocrisy charge
Get them on the glacial vaccine rollout. That's the big economic policy mistake the govt is making right now
h/t
@DavidSligar
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Solidarity to everyone at UNSW. What a disaster.
We're all having to play a super tough hand. But made so much worse by deliberate decisions of the commonwealth government to screw the entire university sector.
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It’s a sad reflection on the pundit class in Australia that prominent business commentators still haven’t grasped *the most basic* aspects of the implications of the pandemic for economic management. Have these people learned nothing?
.
@jennifer_hewett
says the Victorian Government's coronavirus strategy is "one of the greatest failures of political and public policy Australia has ever seen".
#auspol
#insiders
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I wonder how many economists know that Paul Douglas [of Cobb-Douglas fame] was later a US Senator and civil rights hero? and at age 50 one of the oldest to ever serve and see action as a US Marine?
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To be absolutely clear, this from Adam is literal *misinformation* circulated by conspiracy theorists and widely debunked. That he keeps repeating this lazy misinformation when a moment's research would expose it tells you everything you need to know.
@LaTrioli
I directly quoted the CDC website from their 26 August update.
"For 6% of the deaths, COVID-19 was the only cause mentioned".
How is that wrong?
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People keep saying “oh it was all inevitable” and “no one was really saying we should let it rip”.
But they absolutely fuckin were.
I well remember one of Australia’s most senior journalists saying his dad had had enough good years. And a tide of similar in the business press
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Very kind of Simon. But made me think I should put this online for those who are interested. You can find the syllabus and a first batch of lecture notes here:
A work in progress! Comments/corrections welcome.
Probably take this course if you're an MIT macro student. Chris is a sensationally good teacher.
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I’m old enough to remember when the press gallery thought Morrison was a clear and effective communicator.
What a difference it makes to the coverage when there’s a critical mass of people who have lived experience that contradicts the spin.
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This is an astonishing claim. Disingenuous because the literature is full of theoretical examples and we only need to open our eyes to see there real world relevance.
Amazingly arrogant to set himself up as the judge of this literature. He’s a journalist not an expert
@profholden
Richard I've seen no proof either theoretical or empirical for these measures.
I'm happy to be convinced otherwise by future cross country studies.
Regardless restrictions will be lifted soon as 6 month lockdown and/or waiting for a vaccine is madness.
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Adam of course doing his best to mislead people again, showing a graph of deaths not cases. Here is what cases actually look like. Pretty clear second wave. And we all know by now that deaths lag cases. The torrent of misinformation from this guy is relentless.
And check out France's deadly second wave, as you've read so much about recently. Cases exploding! 😱
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The fact that *anyone* could take Coorey’s argument seriously says everything you need to know about economic policy debate in this country.
Subsidies to correct a positive externality is literally Econ101.
The
@FinancialReview
's
@PhillipCoorey
argues the ALP's $300 vaccination incentive plan risks reigniting concerns over Labor's economic credentials.
#Auspol
#COVID19Aus
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Disclaimer: these views owe a lot to my conversations with
@SHamiltonian
@BruceJPreston
@profholden
over recent weeks.
But they shouldn't be help responsible for any mistakes or omissions here.
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How about one moment’s reflection on how you got something so basic so wrong. You said literally the most innane, easily refuted thing about Nazi ideology and you wonder why you, a professor of politics, got massive push back? How about some personal responsibility?
#auspol
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Seeing Richmond fans whining about playing the final at the Gabba is truly something else.
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Months in and Adam is still doing a good job of pretending to be confused about the difference between the economic effect of the pandemic and the marginal effect of the shut downs.
All the while pretending only the old are at risk and there are no other health complications.
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Honestly this is first year microeconomics. Emissions are a negative externality. This is an unbelievably elementary point. If you don’t understand it, you have no business opining on it
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Interesting paper by
@alil9145
and coauthors arguing that results in Correia, Luck, and Verner (2020) are driving by differential pre-trends. Correcting for that, effects of social distancing on employment growth are "a noisy zero"
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Two quick points on this:
1) It is impossible to distinguish between theories of inflation by looking at national accounts data like this. These are accounting identities which hold by definition, regardless of the actual determinants of inflation.
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This "I'm fighting the virus" line from Morrison is wild. This is the guy who said prominently on numerous occasions that we've gotta "live with it".
He's so lucky the states took it more seriously than he did.
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Let's just remember that Josh Frydenberg himself had the opportunity to fund the procurement of a full portfolio of vaccines in the October 2020 budget, if not earlier. And he botched it.
An obvious problem, pointed out at the time, was its pitiful underspend on vaccines.
Breaking: Federal Treasurer Josh Frydenberg says the lockdowns now in place across NSW, Victoria and South Australia are costing the economy hundreds of millions of dollars a day. Follow our live coverage with
@BroedeCarmody
.
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There’s a fringe view out there that if you do the numbers the shutdown somehow isn’t worth the cost to the economy.
That view is wrong, by orders of magnitude.
@profholden
and
@BruceJPreston
show why.
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The ALP should be seizing a once-in-a-generation opportunity to destroy the Coalition's economically illiterate talking points on debt and deficits. Instead we get this silly myopic tit-for-tat. Blurggh.
Frydenberg’s reckless budget position makes him Australia’s highest spending & most indebted treasurer. Time is running out for fiscal consolidation. Otherwise debt servicing will cruel our ability to invest in the future.
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Well I guess it's true what they say in Canberra,
@JoshFrydenberg
is just amazingly out of his depth. This is what happens when you think you don't need to know any economics but can just make it up as you go. What a joke.
Treasurer
@JoshFrydenberg
says will be also inspired by Reagan and supply economics. Reagan ran budget deficits thru his two terms
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For the life of me I just can't understand why Adam Creighton has stopped talking about Sweden and started talking about Ethiopia (a country with vastly different demographics, among other things). Sad.
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Thanks to a generous donation, the University of Melbourne Department of Economics has a chair in economic history to fill.
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1% of the population getting a dose in one day is almost decent.
Canada was where we are now back in mid June. Really not that long ago. They're now rockin' it. World leading. Look at the take off.
We can be there soon. Let's fuckin' smash this thing.
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Big teaching update. More lecture notes for my PhD class
#econ90003
. These cover basic models with household and firm heterogeneity
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Finally published, almost 20 years after it first circulated!
Forthcoming at the JPE:
Nobuhiro Kiyotaki and John Moore, "Liquidity, Business Cycles, and Monetary Policy"
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Aged so well. I can’t for the life of me imagine why Adam has gone uncharacteristically quiet.
More doctors speaking out against 20 week+ lockdowns.
Soon it'll just be the economists like
@JohnQuiggin
left demanding blanket lockdowns and a police state to enforce them.
Because "the models"!
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You can't say, the economic cost of the lockdown is x% increase in unemployment, y% decrease in spending etc etc without specifying how you think those outcomes would be different under an alternative policy response. Attributing it all to the lockdown = wishing away the crisis
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Fresh from doing their damndest to sabotage Australia’s remarkably successful Covid response, the IPA types have turned on the “true tyrants are the anti-tyrants” doublespeak.
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Congratulations to Bernanke, Diamond and Dybvig!
For anyone interested [and my students!] here are some notes of mine for an undergrad class at MIT using Diamond-Dybvig to think about both "traditional" bank runs and "runs on repo" in the 2008 crisis.
BREAKING NEWS:
The Royal Swedish Academy of Sciences has decided to award the 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Ben S. Bernanke, Douglas W. Diamond and Philip H. Dybvig “for research on banks and financial crises.”
#NobelPrize
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Melbourne Econ is going to be on the market this season. We've got up to 5 Assistant/Associate Professors spots in applied micro, macro or metrics. Feel free to email/DM me with any questions. Apply here:
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So gotchas aside is the ALP position that we *shouldn’t* be running big deficits right now?
It’s a perfect opportunity to help people understand that the budget bottom line is really not a good measure of economic management and you threw it away.
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The sheer rapidity of the decline in hours, about 9% so far, is a completely unprecedented shock to the labour market. It alone is consistent with about a 6% decline in GDP, an extremely severe recession. We will need ongoing fiscal stimulus for a long time to come
#insiders
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In case anyone is confused, Judith Sloan’s last academic publication was about 25 years ago. I have never seen her at
@unimelb
where she allegedly has some affiliation. And I have never been able to get a straightforward answer as to why this fiction is allowed to persist
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One gets the impression that Adam’s covid denialism doesn’t get the same reception now he’s in a country where 500k people have died as it does in Australia.
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I hope Heather Sarsons
@saskatchewin
gets most of the credit for this “team production”. Normally this would mean 2 papers have been merged, but this seems like Heather’s recent draft + some new authors who don’t seem to have had a mature working paper out there
#EconTwitter
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