Blame Germany!

The French economy minister, Christine Lagarde, has found the problem with the EU: Germany. Indeed, it is too productive, and Germans save too much and consume too little, which is clearly not "sustainable for the long term". In an interview with the FT, she said Berlin should raise wages to make its workers less competitive. Is she on crack? Apparently, the FT thinks she is the best minister of Finance of the Eurozone. Is everybody on crack?

Smuggling Indonesia's islands, one boat load at a time!

freakonomics reports:

Black-market smugglers are literally stealing Indonesia’s small islands, including the legendary UNESCO heritage site of Krakatoa. “Sea reclamation projects in China, Thailand, Hong Kong and Singapore are driving a black market in Indonesia’s abundant supplies of soil, sand and gravel,” reports The Times of London. Twenty-four islands have allegedly disappeared since 2005 due to erosion driven by sand mining. 

Global sports salaries database

A new report compiled by www.sportingintelligence.com, the "Review of Global Sports Salaries", finds that the New York Yankees are the world's highest-paid players in a team sport. The ranking is below. They also have a free sports salaries database that compares athletes’ wages covering a variety of football leagues (soccer) and baseball leagues, plus NBA basketball, NFL football, NHL hockey, IPL cricket, the top 20 earners from each of the ATP and WTA tennis tours, and the top 30 earners from the PGA annual world money list. This data could be interesting to study incentives or market structures.

ht: fv

Opportunity cost of cars vs. trains: The Case of Switzerland and the United States

This is a follow up to the post from Mar 25, 2010: Is the Geneva-Lausanne train ride really expensive?

Take it as given that the opportunity cost of train is car. (obviously, as by def. the next best alternative ;)

Assuming that on average you can get 10 km on 1 litre of fuel, in Switzerland at the current gas prices:1km = 0.151 USD and in the US, 1km = 0.078 USD.

At the current exchange rate this is more or less equivalent to the price in CHF, namely: 0.16CHF and 0.08CHF respectively.

Now we can explore the train costs with respect to car costs.

Paying tribute to old mate David,
"Double, double toil and trouble;
Fire burn, and caldron bubble." and ta-da!

In USA, the opportunity cost of 1 km on train cost is 0.66 CHF of 1 km by car but only 0.47 CHF of 1 km by car in Switzerland.

Of course, if you are a true baller boasting a Hummer, then the above may no longer apply.

However, as recession hit hard the USA, and keeping in mind that in 2000, 57% of households owned 2 or more cars, then assuming slightest amount of rationality within the jungle that we are living in, we can expect that people tried to make more trips with the environmentally friendly, fuel efficient cars of the wives... In this sense, the vehicle ingredient of the above calculations is no longer as heterogeneous, and shouldn't bias the USA-CH opp costs results.

Optimist's bottom line: Swiss trains are a good deal
Pessimist's bottom line: Swiss cars are "uber-piggy-bank-breakers

gotta love these forecasts!

"Stocks have reached what looks like a permanently high plateau."
Irving Fisher, Professor of Economics, Yale University, 1929.

"1930 will be a splendid employment year."
U.S. Department of Labor, 1929.

Is the Geneva-Lausanne train ride really expensive?

The 45 minute train ride from Geneva to Lausanne costs 20.5 CHF, enough to discourage us from going there for seminars. But is this really expensive? To answer that question, I compare it to the New Haven - New York line in the US. The latter costs 15 CHF but takes 1:50. A lot cheaper at first glance; you go further for less. Indeed, it costs you 0.12 CHF per km, rather than 0.34 CHF!

But what about the opportunity cost of time? Taking this into account, the US train remains the better deal, but not by much, costing 0.22 CHF per km per hour instead of 0.26 CHF in Switzerland. One could argue comfort should also enter the equation, making the Swiss train a better deal after all. But then we could also include the Dunkin' Donuts at New Haven Grand Central. But that would be unfair competition.

	km	hours	CHF	CHF per km	km/h	CHF per  km/h
New Haven - New York	122	1.8	15	0.12	67.78	0.22
Geneva - Lausanne	60	0.77	20.5	0.34	77.92	0.26

Tackling crime in Geneva

Geneva has the highest criminality rate in Switzerland. Last year, we asked for the city to react. But the police has remained the most unprofessional. Things may be about to change. The Geneva police is launching the "Figaro" operation. It will boost up its presence in the Pâquis, Eaux-Vives, Rive and around Cornavin. The goal is to punish small crimes, be visible, and regain the confidence of the population. Is this the right way to go? Abortion is already legal, social problems are minimal. A more effective police might be just what is needed.

Innovation and economic development

WIPO is launching a series of seminars on “The Economics of Intellectual Property” on March 26, 2010. The event will feature leading economists from around the world and is designed to stimulate and inform international debate on the linkages between intellectual property and development. Could be interesting for some of us.

This week, five economists are coming: Keith Maskus, Colorado,  Brownyn Hall, Berkeley, Keun Lee, Seoul, José Tavera Colugna, Perú, and Francois P. Kabore, American University. The roundtable will be chaired by WIPO’s Chief Economist, Carsten Fink and begins at 3PM. Will they offer pizza and beer? Check this link for more details.

Google will try to stay in China

In the 15th century, China was technologically superior to Europe in many fields but turned its back to the world. In 1436 an imperial edict was issued forbidding the construction of ocean going vessels. Foreign missions and voyages were banned. Trade and even contact with foreigners were officially discouraged. (source)

Will China mess it up again as Google tries to stay alive in China? Or will it turn its back to the world, once again? This could be the beginning of the end...better stay cool...