Policy options to reduce Ireland's greenhouse gas emissions

A side effect of the economic downturn since 2008 is that Ireland may meet its Kyoto Protocol commitment for 2008-2012 to reduce its greenhouse gas emissions, but that its longer term targets for 2020 and beyond are still stringent. This paper addresses both the political challenge and the economic implications of moving to a low-carbon state. The cost of reducing carbon emissions varies widely and heavy costs could be incurred. A soundly based policy framework that keeps costs down is thus essential, while being mindful of effects on the economy and the vulnerable; the pause in economic growth provides an opportunity for long-term planning. The criteria for policy are primarily threefold: regulatory certainty, including protection from short-term political interference; clearly defined incentives that ensure a credible, long-term price of carbon; and a transparent, dynamic and fair process with which the public can engage. The roles of various policy instruments are discussed, including regulatory and market-based instruments, subsidies and taxation.

Read the complete report here.

Headline Support for the Financial Sector and Upfront Financing Need

Find the IMF's summary table here (including Belgium).

Check out the IMF Update on Fiscal Stimulus and Financial Sector Measures here.

Fiscal stimulus in the G-20 countries

Find the IMF's summary table here.

De Belgische overheid, meer bepaald de afdeling justitie

Kris Peeters is niet gek

OVERHEIDSINTERVENTIES IN DE AUTO-INDUSTRIE — Doet Vlaanderen gekke dingen door Volvo Gent te steunen? Niet als je vergelijkt met wat er in het buitenland allemaal gebeurt om noodlijdende autofabrieken kunstmatig in leven te houden, vindt JO VAN BIESEBROECK.Lees het volledige artikel in De Standaard hier.

The ten principles of economics, translated by the stand up economist

Watch it on youtube here.

Illuminating outline

The Nordic model Economies that are open to the world and offer greater worker involvement are attracting attention - but benefits are hard to replicate elsewhere, write Richard Milne and Andrew Ward in the FT. Read the complete article here.

The crushing responsibility of economists

By Paul De Grauwe in the FT

A few economists warned about the risk of a financial crisis, but the least one can say is that they were not taken seriously by most of the economics profession. Why is that? Why did so many, especially the best and the brightest in the profession, not see the warning signals that were there?

Economic theories affect the way we see and interpret economic data. If we believe that financial markets are efficient and capable of self-regulation, we are likely to interpret a bubble-like movement in real estate and equity prices as evidence of the marvels of free markets.

If we believe, as macroeconomists do, that consumers and producers are rational and fully informed agents, we do not worry that large debt build-ups will be harmful because this build-up must be the result of rational and fully informed decisions that will lead to a new equilibrium.

Thus an economic theory can work as a framing device conditioning us to interpret the facts in a way that is consistent with the theory. Psychologists call this a “confirmation bias”.

It should not be like that. After all, economics is a science (or should be one). And in science, theories should be formulated in such a way that they can be refuted. The main preoccupation of scientists should then be to try to refute these theories.

But that is not the way macroeconomics has evolved during the last two decades. Instead it has become a system of beliefs, some will say a religion, about rational and fully informed agents operating in efficient markets. This belief has become so strongly held that it has fallen victim to the confirmation bias. As a result, it has stopped being science.

The present crisis creates opportunities. The accumulation of facts that refute the mainstream macroeconomic models has become so strong that only the most fundamentalist believers will want to cling to these theories.

The crisis also creates the opportunity to develop better models. This will be the hard part because the world the macroeconomists will have to model is one crowded by agents who have trouble understanding the way the economy functions.

It is also a world in which the interaction between these imperfectly informed individuals regularly creates collective movements of euphoria and panics. These phenomena are hard to model. Yet this is what macroeconomists will have to do if they want to regain respectability as scientists.

Clearly the financial crisis is not only due to the delusions of macroeconomists. The delusions were quite widespread among bankers, supervisors, media and policymakers. Yet society expects the community of scientists to be less prone to delusions than the rest. In that sense the responsibility of the economics profession is crushing.

Is Europe lagging behind the US in university technology licensing?

European universities produce high-quality scientific research, but they licence it to industry far less than US universities. This column introduces new survey evidence on university licensing and assesses the gap between the US and Europe. It highlights European universities’ shortcomings in generating technology transfer revenue, despite their desire to do so.

Read the article here.

Stresstest wijst op zwakte Belgische banken

Lees meer op Econoshock, hier.

De 20 beste ideeën om de klimaatcrisis te bestrijden

De krant The Guardian en het Manchester International Festival stelden een internationaal expertpanel samen over klimaatverandering. Het panel moest meer bepaald op zoek naar ideeën om de klimaatcrisis te bestrijden.

Lees die ideeën op Econoshock hier.