Toro

Oh, so we have a few experts in economics here? Let me see. As you are both so knowledgeable, surely you know the basics of economic modeling. Either one of you want to explain what is hierarchical or linear about hierarchichal linear modeling? This is a basic technique used by econometricians. Would you both agree that it should really be called multilevel modeling? Level 1: Yij=b0j +b1j *Xij + eij Level 2: b0j = g00 + g01*Wj +u0j b1j = g10 + g11*Wj +u1j Using the above equation, can you identify the "fixed" and "random" effects? Do you know what the error term stands for? If you don't know the basics about measurement in economics, you might not want to make claim to the economics hall of fame. <{POST_SNAPBACK}> Ah, econometrics. Haven't done that in 10 years. We can get into a p****** match if you want Cartman, but we hire people for a lot of money who are on the cutting edge of applied mathematical modelling so we can do other things. Oh, and to answer one of your questions professor, the error term is the random deviation from the mean in the model for the ith individual in the jth group.

I've seen it several times in print from various sources. It shouldn't be that hard to figure out. The CBO will have all the budgets. I think that Bush is a free trader, but political expediency wins out over free trade, which explains the agricultural subsidies, the steel tariffs, softwood lumber, etc. He has been pushing the Doha Round and recently twisted arms to get CAFTA signed.

The legal age of consent is 14 in Holland. I'm not sure what the difference is between a 17 year old having sex with a 14 year old and a 19 year old have sex with a 14 year old.

You didn't? Absolutely correct. The whole modus operandi of the Bush team was relection, by any means possible, partly to vindicate the loss of his father. Bush is not an economic conservative by any means. Discretionary, non-defense spending has risen faster under Bush than it ever did under Slick Willie. They did, at least relatively. Most of the capital flows in the United States from 2001 through 2004 were by central banks trying to prop up the US dollar. That has changed this year as private foreign funds have been big buyers of US corporate bonds since yields on corporate bonds in the US are, for the most part, higher than any other major industrialized nation. Higher interest rates are a function of the high trade deficit. The budget deficit in the US is relatively better than France, Germany, Italy or Japan.

DeLay is complaining that this is bare nuckle politics, which is ironic considering that's pretty much all he played in the House. DeLay was the guy who, after the Columnbine shootings, said that this is what happens when you don't allow the 10 Commandments to be posted in public schools.

Bush massively increased subsidies to farmers a year or so after he was first elected. The idea was to hit the Europeans hard, and force the Europeans to the table of the Doha Round of the current WTO negotiations. However, food subsidies are about the worst policy for the very poorest countries in the world as agriculture is one of the few industries which the very poorest nations have a competitive advantage over the rich West. If people are truly concerned about helping these people, these policies, which are just a massive money grab by one part of the population - farmers - at the expense of everyone else, should be scrapped.

I haven't read that article, but I have read other pieces suggesting this is happening. I sure hope so. It would be healthy to the global economy if Europe and/or Japan started moving again. But both areas have moved in fits and starts. You want to see some sustainability.

Well, that narrows it down, eh?

From 1975 to 2004, government spending in total rose 2.3% per year. That's lower than the roughly 3% the economy grew. I've already posted this information here http://www.mapleleafweb.com/forums/index.p...topic=3970&st=0 You can find the gross government wages paid here. http://www.bea.doc.gov/bea/dn/nipaweb/TableView.asp#Mid Doing the same adjustments for inflation and population growth, real government per capita wages grew 1.0% per year from 1975-2004, below the average wage growth of 1.6% If anything, the US economy is too consumer oriented. Consumer spending is over 71% of total GDP spend, and has averaged 67% over the past 4 decades. France's government spending is much greater, not 18%. Its more like 48%. Of course, its all easy to check. I'm sure the OECD website has that, which I'll check later.

Eureka Hours worked is less than it was in the past. I will find the US government data and link it. The wage survey measures this.

I've calculated wage and total income growth, both nominal and real here http://www.mapleleafweb.com/forums/index.p...st=0#entry71078 Real wages per capita from 1945 to 1974 rose on average by 1.4%. Since 1975, they have risen 1.6%. Since 1980, they have risen 1.7%.

Total US nominal wages paid http://www.bea.doc.gov/bea/dn/nipaweb/IndexW.htm#W - Wages and salary disbursements, Table 2.1 in billions 1929 $50.5 1940 $49.9 1950 $147.2 1960 $272.9 1970 $551.6 1980 $1,377.7 1990 $2.754.0 2000 $4,892.4 2004 $5,389.4 Annual growth in total nominal wages by decade 1930s -0.9% 1940s 11.4% 1950s 6.8% 1960s 7.2% 1970s 9.3% 1980s 7.5% 1990s 5.6% 2000s 3.8% Total 6.3% Annual growth in total national income by decade. This includes rent, dividends, interest payments, and other returns to capital. 1930s -1.5% 1940s 11.0% 1950s 6.6% 1960s 7.1% 1970s 10.2% 1980s 8.3% 1990s 5.5% 2000s 4.5% Total 6.4% Real wage growth (You'll have to adjust for inflation yourself. http://www.bea.doc.gov/bea/dn/nipaweb/IndexW.htm#W - Price indexes, Table 1.1.4) 1930s 1.2% 1940s 5.7% 1950s 4.3% 1960s 4.7% 1970s 2.5% 1980s 2.7% 1990s 3.3% 2000s 1.6% Total 3.3% Real total income growth 1930s 0.5% 1940s 5.3% 1950s 4.1% 1960s 4.6% 1970s 3.4% 1980s 3.4% 1990s 3.2% 2000s 2.2% Total 3.4% Real per capita wage growth. (You'll have to adjust the per capita figures yourself http://www.bea.doc.gov/bea/dn/nipaweb/IndexW.htm#W - Population Growth, Table 7.1) 1930s 0.4% 1940s 4.3% 1950s 2.5% 1960s 3.3% 1970s 1.4% 1980s 1.7% 1990s 2.0% 2000s 0.6% Total 2.1% Real per capita total income growth. 1930s -0.2% 1940s 4.0% 1950s 2.3% 1960s 3.2% 1970s 2.3% 1980s 2.5% 1990s 1.9% 2000s 1.2% Total 2.2% Looked at another way, real per capita annualized wage growth 1935-1944 9.3% 1945-1954 -0.5% 1955-1964 1.9% 1965-1974 2.7% 1975-1984 1.1% 1985-1994 1.6% 1995-2004 2.1% or 1945-1974 1.4% 1975-2004 1.6% or 1980-2004 1.7% Real per capita annualized income growth 1935-1944 8.1% 1945-1954 0.0% 1955-1964 2.1% 1965-1974 3.1% 1975-1984 2.3% 1985-1994 1.8% 1995-2004 2.1% 1945-1974 1.7% 1975-2004 2.1% or 1980-2004 2.1% Conclusion - this idea that wages have been falling the past few decades is false. In fact, they have accelerated since 1980.

Well then I mis-interpreted what you are arguing. It is true that wage gains have benefitted the higher wage earners disproportionately. (It is not true, however, that there have been no gains for lower income-stratas.) Gains will flow to the areas that are marginally more productive. Those areas, as of late, have been been in higher-end industries, i.e. engineering. It speaks to the article you posted from BMO, that Canada's lagging productivity is due to a heavier concentration in lower-productivity industries. That is similar for education. The greater gains have gone to more educated workers. This will continue in the foreseeable future.

Countries in the EU have given up much, much more sovereignty in the EU than any country in NAFTA.

Its also 1.6% compounded annually from 1790 to 2003. It was 1.1% from 1800 to 1900. It was 2.1% from 1900 to 2000. It was 2.2% from 1980 to 2000. It was 2.4% from 1950 to 1980. It was 2.1% from 1970 to 1980. So much for globalization being bad for the economy. But on the other hand, the supply-siders didn't have much of an effect from trendline either.

No kidding! That's what I 've been trying to say! Improved productivity means improved real wages! How, pray tell, do "us economists" usually view productivity? You mean Golub's multi-year, multi-nation study linking wages to productivity? Or the World Bank's study where the R-squared between the cost and value of labour was 92%? Of course other factors will influence wages. But neither you, nor Yaro, have shown any proof that productivity and wages are not highly correlated. In fact, you've linked a study saying they were. Thanks! Be serious.

Eureka Surely you are kidding. The EU is not only an economic union, its a political union too. Its silly to say that NAFTA is more integrated than the EU. The EU has a common Parliament, a common budget, common labour laws, labour mobility, a common currency, etc.

August The point is that growth in the economy has been pretty consistent over time. It was originally in the context of how globalization supposedly wrecked the US economy. Also, I wanted to demonstrate that consuption was higher during the few decades after the war, than before the war. Also, investment spending hasn't changed much over time. You'd expect accelerating capital expenditures over long periods of time if there was excess profit accruing to capital. Its also there for information in case anyone is interested.

Calgary. There's nothing wrong with Edmonton but I like Calgary better. Calgary is more dynamic, is closer to the mountains, and has much better weather. Edmonton is more government and blue-collar. There's nothing wrong with that, of course, but that should give you an idea.

Europe is far, far more integrated than North America. Thus, if we are to use the European model as an example, the solution would be for Canada to become more integrated with the US.

I posted this in the Global Growth thread in the World Politics section, but its probably more appropriate here so I've reposted this I ran the numbers from the US Bureau of Economic Analysis http://www.bea.doc.gov/bea/dn/nipaweb/TableView.asp#Mid US growth rates, annualized 1930-39 0.9% 1940-49 5.6% 1950-59 4.1% 1960-69 4.4% 1970-79 3.2% 1980-89 3.0% 1990-99 3.1% 2000-04 2.6% Looking at different time periods though, we see a little different picture 1935-44 9.9% 1945-54 1.3% 1955-64 3.8% 1965-74 3.7% 1975-84 3.0% 1985-94 3.0% 1995-04 3.2% Not much of a difference between the so-called pre- and post-globalization eras, at least not for the United States. I have argued that one of the reasons why growth was higher earlier in the century is because of increased consumption due to pent-up demand after the Depression and World War II. Here's what consumption looked like since the Depression 1929-35 -1.2% 1935-44 3.9% 1945-54 4.3% 1955-64 3.9% 1965-74 4.1% 1975-84 3.2% 1985-94 3.2% 1995-04 3.7% Or, looking at through the prism of 1980 as being a demarcation 1930-39 1.0% 1940-49 4.0% 1950-59 3.7% 1960-69 4.4% 1970-79 3.5% 1980-89 3.3% 1990-99 3.3% 2000-04 3.3% Pent-up demand after the Depression and WWII lasted well into the 1970s. Such long-waves of demand are not uncommon if you study economic history. Its also hard to argue that globalization is a negative factor for consumption when globalization increases choice and lowers costs. Consumption BTW, has averaged between 60-70% of GDP and is by far the most important factor in the economy. As any macro econ 101 student learns, GDP = C + I + G + NX So let's look at investment and government spending Investment 1930-39 -1.6% 1940-49 7.6% 1950-59 5.2% 1960-69 5.5% 1970-79 4.7% 1980-89 2.5% 1990-99 5.9% 2000-04 2.0% or 1935-74 6.0% 1975-04 4.2% Investment slowed. But how can that be when investors are supposed to be the big benefactors of globalization? Government spending 1930-39 5.0% (War, New Deal) 1940-49 7.5% (War) 1950-59 5.8% (GOP President) 1960-69 3.8% (Democrat) 1970-79 0.5% (Nixon/Carter, decleration from Vietnam war spending) 1980-89 3.1% (Reagan/Bush) 1990-99 1.3% (Slick Willie, Dem) 2000-04 3.0% (W, GOP) So much for the GOP being the stewards of the purse strings. Spending has accelerated faster under Republican administrations since WWII than Democrat. Or 1946-74 3.4% 1975-04 2.3% So the conclusion that we draw from the US economy anyways is that its hard to say that "globalization" has lead to a slowdown in the economy. It has more to do with consumption slowdown after the long-wave of pent-up demand from the Depression and the war faded, and, less important, slower government spending.

First Ditto. PLEASE don't take anything personally. I'm sure you'd be a good guy to sit down and have a beer with. Second, Yaro, don't have too many quotes in your posts. This board appears to only allow a certain amount then the formatting makes it difficult to read. Splitting your response in two posts will make it easier to read. Trade is an exchange of goods and services between entities and individuals that have a competitive advantage in one thing and seek to exchange that good for another good in which the other has a competitive advantage. That competitive advantage is heavily influenced by productivity. It is through specialization which drives up productivity and thus wages. This is a simple concept. Individually, if we all tried to do everything for ourselves, we would all be poorer. But because we specialize, we are more productive and are paid higher wages. Wrong. Economics is not a zero-sum game. Unless you are talking about rising equilibrium returns in the short-run, higher returns to capital does not mean falling returns to labour. Even in the Bloomberg Article you site as evidence of "falling" wages, the article says that wages rose 4.5%. Of course corporate profits outstripped wage gains coming out of a recession, they always do. There's a difference between lower returns and falling returns. Of course the market pays a higher return for the aeronautical engineer than the janitor because he's more productive. "The bare market system" pays him such because he's more productive. But that productivity is also a function of supply and demand. If you have too many aeronautical engineers, then the productivity of the marginal engineer falls and he will be paid less. My "theory" does not mean that the wages will be the same everywhere in the world. First, I'm arguing that higher productivity leads to higher wages, which, as the BMO economist I quoted earlier says, is pretty clear. Second, I'm discussing equilibrium wages, not individual wages. There are many, many reasons why wage structures will be different between different parts of the world. But to boil it down to "cheap labour" is wrong. I've posted two studies, both of which used rigorous econometric methods, that shows productivity and wages are related. I could post more, but am lazy. Rising wage costs; OECD, Table EO77. http://www.oecd.org/statisticsChannelList/...6_1_1_1,00.html Globalization, Growth and Poverty by the World Bank - sorry, you'll have to buy it - looked at 24 countries which were defined as "more" globalized versus 49 countries that were defined as "less" globalized. From 1980 to 1997, real CAGR GDP per capita rose 3.1% for the "more" globalized nations versus 0.5% for the "less" globalized nations. Wages rose by similar amounts. But you say its a "FACT" that wages have fallen everywhere for the past 25 years. Show me the data or an economics study proving this. You haven't so far and I'd be interested. Also, we look at these things in aggregate. Wages can rise in different countries for many reasons, especially when you start at a low base. Funny that you site Chile since its the most open economy in South America. That's convenient, isn't it? With a wave of your hand, you can outright dismiss pretty much everything the World Bank publishes because you, er, read a book. The World Bank has its faults, no doubt, but gathering statistical data isn't one of them. I know people who work or have worked at the World Bank. Technical statistical inability is not the first thing that jumps to mind when you meet these people. Well, I didn't say you did not have a background in economics. I said it was hard to believe that someone with an economics background would so vociferously argue against the link between wages as productivity - as the BMO economist noted it wasn't much of an issue in the economics profession. I too have a background in economics. The organization I work for has a fair sized economics department, and I have regular contact with the economics community outside of my organization. Whenever this topic is an issue, there is no doubt amongst that group that there is a strong link between wage growth and productivity. You dismiss what the World Bank says out of hand, but you believe this group? C'mon! I read those three memos and they didn't say anything. Now, occassionally collusion occurs in business. But this is a far cry from saying that the oil industry has been setting the price of oil systematically. Until recently, the returns on refiners the past 2 decades has been below its cost of capital. That's why companies would consider shutting down capacity. Too much supply, as one of the memos said - or at least there was too much supply. That's perfectly rational. I am fully, fully aware of this. I do not see printed money as wealth. There is a big, big difference. Anyone who has ever read the Austrians knows this. Don't be silly. I have posted US growth rates here. http://www.mapleleafweb.com/forums/index.p...topic=3710&st=0

Yaro I have friends who emmigrated from Serbia. Both are brilliant engineers. One never found work in Canada as an engineer and the other worked well below her capabilities and no longer works in the field. You are right. Its a dirty secret that many professional groups have standards which, though designed to signify a level of professionalism, in fact discourage competition and work as a closed shop. They told me that their academic training was more rigorous in Belgrade than it is in Canada. A similar thing happened to someone I knew who went through dentistry school in Canada, moved to England, then had to do it all over again because they wouldn't accept her Canadian education. So, though I believe there is merit to the skills issue, its also a bit of a red herring. Its definitely true in the oil patch. Venezuelans fired from PDVSA are moving to Alberta. It could also be true in geological engineering as well. I don't know what the figures in Canada are, but the total number of engineers who graduated with mining related degrees last year in the United States totalled 534.

Of course Paul Martin wants more immigrants! He needs more Liberal voters because there aren't enough in the country to give him a majority government!

I agree completely. But best of luck to you Derek. More young people should get involved in politics.