A win-win measure out of the crisis: A graphical discussion of the tax void

A win-win measure that will contribute to getting us out of the crisis is the abolition of the tax void in OECD countries. The tax void is explained with graphics and it is shown how it can be eliminated for free. Adjustment costs will lie in understanding and adaptation of administrative procedure and not in the real economy.financial crisis, economic crisis, stagflation, inflation, unemployment, Phillipscurve, taxes, tax void, optimal taxation

The performance of four possible rules for selecting the Prime Minister after the Dutch Parliamentary elections of June 2010

Economic policy depends not only on national elections but also on coalition bargaining strategies. In coalition government, minority parties bargain on policy and form a majority coalition, and select a Prime Minister from their mids. In Holland the latter is done conventionally with Plurality, so that the largest party provides the chair of the cabinet. Alternative methods are Condorcet, Borda or Borda Fixed Point. Since the role of the Prime Minister is to be above all parties and represent the nation and to be there for all citizens, it would enhance democracy and likely be optimal if the potential Prime Minister is selected from all parties and at the start of the bargaining process. The performance of the four selection rules is evaluated using the results of the 2010 Dutch Parliamentary elections. The impossibility theorem by Kenneth Arrow (Nobel memorial prize in economics 1972) finds a crucially different interpretation.Political economy; public choice; political science; optimal representation; electoral systems; elections; coalition; impossibility theorem

Arrow’s Impossibility Theorem and the distinction between Voting and Deciding

Arrow’s Impossibility Theorem in social choice finds different interpretations. Bordes-Tideman (1991) and Tideman (2006) suggest that collective rationality would be an illusion and that practical voting procedures do not tend to require completeness or transitivity. Colignatus (1990 and 2011) makes the distinction between voting and deciding. A voting field arises when pairwise comparisons are made without an overall winner, like in chess or basketball matches. Such (complete) comparisons can form cycles that need not be transitive. When transitivity is imposed then a decision is made who is the best. A cycle or deadlock may turn into indifference, that can be resolved by a tie-breaking rule. Since the objective behind a voting process is to determine a winner, then it is part of the very definition of collective rationality that there is completeness and transitivity, and then the voting field is extended with a decision.economic crisis; voting theory; democracy; economics and mathematics;

A note on competing economic theories on the 2007-2008+ financial crisis: The case for (hidden) stagflation

The financial crisis that erupted in 2007, continues in 2008 and likely continues longer, is in need for explanation by economic theory. The monetary authorities and financial regulators provide us with piecemeal engineering on the fly but there is a lack of overview. The lack of convincing theory and strategy becomes especially worrying when we see the crisis affecting the real economy. People and economic activities that already suffer are not well-represented in national statistics, which provides newspapers with a rosy picture as if the current crisis only affects the financial sector and not the real economy. When the crisis starts to bite those who are in the statistics then the financial crisis will become recognized for the economic crisis that it is, but apparently with little guidance from economic theory on how to solve it. The time honoured solution is to have the poor and powerless work harder and earn less to solve the problems of the rich and powerful. But economic theory can do better. The paper compares various competing economic theories and suggests that economists study a particular theory that apparently hasn’t had sufficient attention yet. The current financial crisis finds a fundamental cause in stagflation. This stagflation originally was open but was later hidden by financial deregulation and innovation. By tackling stagflation the financial crisis would become manageable. A suggestion on how to tackle stagflation is provided by Colignatus (2005), "Definition & Reality in the General Theory of Political Economy", Dutch University Pressfinancial crisis, economic crisis, stagflation, inflation, unemployment, Phillipscurve, taxes

High Noon at the EU corral. An economic plan for Europe, September 2011

The 2007+ credit crunch and economic crisis put European governments in severe debt, with talk about a Greek partial default. It also put the European banks into a zombie condition, while under Basel III the capital requirement rises from 8% to 10.5% (which requirement does not cover public debt since that is considered reliable). Fiscal measures concern tax structures and that Germany and Holland eliminate their surplusses on the external account. A monetary measure is that the European Central Bank as lender of last resort helps to prevent a crisis of confidence. The ECB can create capital and neutralise this by higher reserve requirements. Two reasonable measures are: (1) EUR 400 billion of European Recovery Capital (ERC) will reduce Greek and Italian debt to 100% of their GDP (using 2010 data). Greece and Italy on their part can have a wealth tax or create 40 year leases (implictly at 10 billion per year excluding interest) like Hong Kong once was for investment areas under foreign law (think of Magna Graecia). (2) EUR 400 billion can be injected in eurozone equity (and not eurozone bonds) in banks to allow the increase from the 8% to the 10.5% target. This equity can be managed by newly created independent ERC Investment Banks (ERBs), where the shares are allocated to eurozone member states in proportion to their GDP. This partial nationalisation would reduce eurozone national debts by 4.3% of GDP.Economic stability; monetary policy; monetary crisis; credit crunch; zombie banks; euro; European Central Bank; fiscal policy; tax; external balance

Modifying behaviour on STI including HIV and oncogenic HPV: a draft protocol for a registry open to the registered subject, generating the concept of a 'STI passport'

*** Background *** Sexually transmissible infections (STI) include both HIV and oncogenic HPV with the risk of cervical and oral cancer. Sexual behaviour is the key to the problem but appears very difficult to influence. The STI tend to have different channels of management and don't seem to be managed in a manner that is sufficiently comprehensive. *** Methods *** Analytical consideration of the factors involved. Induction of a solution approach. *** Findings *** Design of a protocol of a STI registry that also covers HIV and oncogenic HPV. The registry would provide a natural environment for education, discussion of doctor and client, and exchange of information between consenting clients. The registry would be open to the registered subject. Registration can be seen as not just useful for the internal system of public health itself but also as a service to the external public. While the registry would protect privacy, people are free to disclose their status to potential partners. People can also ask their potential partner to disclose that status, when it becomes common knowledge that such registration can exist. This facility adds to the sense of control, which is an important psychological factor for behaviour. Provision of this natural environment of information and control fosters the habit of safe sexual conduct. The registered status of infection then can function as a passport that guards the flows between the infected and the non- infected. Capacities, barriers, sticks and carrots determine the effectiveness and efficiency of the scheme. *** Interpretation *** The protocol offers promising avenues for both research by the academia and advance experimentation in communities.

A measure of association (correlation) in nominal data (contingency tables), using determinants

Nominal data currently lack a correlation coefficient, such as has already defined for real data. A measure is possible using the determinant, with the useful interpretation that the determinant gives the ratio between volumes. With M a m × n contingency table and n ≤ m the suggested measure is r = Sqrt[det[A'A]] with A = Normalized[M]. With M an n1 × n2 × ... × nk contingency matrix, we can construct a matrix of pairwise correlations R so that the overall correlation is f[R]. An option is to use f[R] = Sqrt[1 - det[R]]. However, for both nominal and cardinal data the advisable choice for such a function f is to take the maximal multiple correlation within R.association; correlation; contingency table; volume ratio; determinant; nonparametric methods; nominal data; nominal scale; categorical data; Fisher’s exact test; odds ratio; tetrachoric correlation coefficient; phi; Cramer’s V; Pearson; contingency coefficient; uncertainty coefficient; Theil’s U; eta; meta-analysis; Simpson’s paradox; causality; statistical independence

The macro-economics of repressed stagflation. Part 2: The crisis of 2009+ and a reduction of the working week

The current macro-economic crisis can be diagnosed as repressed stagflation bursting into the open. The Obama Administration and EU stimulus packages prevent economic collapse but do not tackle stagflation itself yet. Without proper measures, a protracted period of high unemployment or high inflation and continued instability can be expected. Instead, macro-economic theory can come at ease with deflation as a temporary state that is logically implied by the notion of price stability. What is crucial is to keep people in jobs. With proper tax measures the NAIRU is shifted to the proper position. The current situation seems to require a (temporary) reduction of the working week, for some areas even from 5 to 4 days.financial crisis, economic crisis, stagflation, inflation, unemployment, Phillipscurve, taxes, working time reduction

Review of Howard DeLong (1991), "A refutation of Arrow’s theorem", with a reaction, also on its relevance in 2008 for the European Union

There will be many researchers who discover voting theory afresh and who will want to understand it and its interesting paradoxes. Arrow's theorem (1951, 1963) is the most celebrated result in social choice theory. It has been criticized a lot but Howard DeLong (1991), "A refutation of Arrow’s theorem", is a monograph that actually succeeds. The booklet has received insufficient attention in the literature. This review also compares DeLong’s approach with my own book "Voting theory for democracy" (2007) and comments on the relevance in 2008 for the European Union, with respect to the veto power of its Member States and their citizens.voting theory; voting systems; elections; public choice; political economy; Borda Fixed Point; democracy; European Union; Arrow's theorem;