Dogs and academic economists

Bock, as ever, puts his clammy palsied finger on the button. His truthiness shines like the face of a party hack eating a bag of chips after a summer evening canvass of a concrete estate. Modest as he is, and erudite to boot, he hides his true message in a layer of allegory, metaphor and literary allusion. Sherlock, dogs, Moriarty, cocaine… The real message is: where are all the professors gone?

Ireland has a fair few professors of economics (not so many as one might think, damned few in finance and none in banking…). We have loads, hundreds literally, of lecturers and assort other ranks, in the universities and Institutes. Yet, when asked to name five academic economists, most people a) look at you like you were deranged and in need of medication and b) go “errrr…Morgan Kelly? Hang on… ahhhh… yer man, the Russian fellah, whatshisname, that McCarthy fella..and…and…” Some might put in my name, others Karl Whelan, or Steve Kinsella, or maybe Seamus Coffey.

The reality is that most academic economists have stayed resolutely sthum over the crisis. It is as if, faced with a gigantic pandemic, that most had not seen coming and many of whom denied could ever come to pass, the medical community disappeared. Some would pop up to duckspeak in their defence of  the government policy of castor oil, leeches and cold showers, others to suggest that while these may help the symptoms the underlying cause needs to be looked at, and others yet again would join government taskforces and snap on the latex gloves. But most? Most say naught,

We have in the Irish academic community world-class experts, in the academic sense, in areas such as labour economics, health economics, the economics of regions, international finance,  small business economics and finance, deprivation and economic development, behavioural economics…. In every one of these areas a small few people  have made the running, in terms of actually PROFESSING. The consequence has been that most people think of economics as forecasting things (badly), the deficit, the banks and that’s about it. The wealth of what is going on in the applied microeconomics disciplines has been left hidden. Yes, people are publishing, but they are not publicising. A large chunk of our wages (but not as much as people think) comes from the taxpayer, and they need to know what is going on.  They might later regret it but…

Not everyone is as mouthy as I am. But the media are pretty grateful for someone to do their copy for them.  Academic economic professors, in the general sense, need to stop being the dogs that do not bark in the night. They need to man and woman up, start doing press releases, contact journalists, cultivate contacts in the media, do newspaper articles and columns, start blogging… They need to get engaged. The excellent LSE Impact of Social Sciences blog has dozens of articles on how to do this and how not to do it. The universities media units wont do it, paralysed as they are by the shiny baubles of the STEM units and desperate to play into the government “if it cant be commercialised tomorrow its feck all use to us” attosecond thinking.  So it’s up to them.

Nor can they play to the “an invisible force is stopping me” argument. That works for dogs and ultrasound anti-barkers, but once someone is permanent in a university, they have tenure (even still).  Promotions are scant anyhow, so it really costs little professionally to occasionally speak up. If that means that the local TD rings you up frothing, or some assistant whelp to a minister gives a dirty look the next time you meet, so what? They will come to you if they need you. The other crowd will do the same. I am a card-carrying FF member. I am also a member of the Labour party. Both of these are of course secret, so secret that even I don’t know. Both have been told to me in absolute seriousness by Serious People “we know you are a you know”.  The political class in this country have attitudes and principles as shallow as the slick on the window of a car after a  rainshower, and as useful. They don’t like criticism, any of them. The Liam Cosgrove attitude of critics as mongrel foxes who need to be rooted out and fed to the hounds, D’Bert attitude to critics as being people who should commit suicide, these prevail. Evidence based commentary and analysis, where the evidence is both factual and ones own professional expertise, is a valid form of academic communication. It is indeed what we might expect people with such evidence to do faced with debate. Plus, it annoys the hell out of the political class…  So, speak up.

 

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Fundementals

Dublin 2nd

Dublin New

So. A gallery of SupADF tests. Who doesnt like some right tailed unit roots of a saturday morning eh? I have blogged on these tests for bubbles before : see here, here, here . I leave you to make your own conclusions…

Too late to stop a Dublin house price bubble?

And on it goes. The latest house price data from the CSO indicate the two Irelands continuing to diverge. On one hand we have Dublin (and to some extent the rest of the urban areas) growing like gangbusters, while on the other hand the stagnation intensifies in the rest of the state. This is clear in both house prices and in other economic aggregates.  Our geospatial policies are, and have been for decades, next to non existent.  Governments have been too timid, too fearful of shortterm backlash, to put in place a meaningful strategy for growth around designated poles accompanied by real policies for the remaineder. Instead we have the irish version of Laissez Faire – Lackadasical Fear.

Bubbles in the Dublin Housing Market?

Is there a bubble in the Dublin house market? The latest figures might well give one pause for thought, with a 22% year on year increase, clearly unsustainable.

However, this may not be the entire story.
A newly developed statistical technique (see here and here for previous posts using it to talk about bubbles in London and Bitcoin) has, it is claimed, good power to detect bubbles. Below see the results for real dublin house prices, 1996 prices, for new and second hand homes.


We can interpret these as a bubble being present in the series when the blue line exceeds the red line. It clearly picks up the last bubble period, and interestingly dates its beginning to the 1997-1998 period. What it also shows is that there seems to be no such bubble at present.
This is only a statistical test – it is by no means definitive. What is clear is that bubble or no, Dublin prices in nominal terms are rising unsustainably fast.

What is your thought reader?

Knowledge Transfer Ireland – Give it away, give it away now…

The Irish Times has today printed a laudatory, uncritical, advertorial on Knowledge Transfer Ireland. It is to me a thousand word puff piece, which contains little hard facts, no analysis, and little news. There is one piece of news, to which I will come.

The piece reads, and may be, as an extraction and repackaging, a collation of press packages. It lauds the new director, whom I am sure is great woman, as a secret ingredient; it praises the approach to getting business and academia talking; it praises the promise of a new way. You know the type of article.

KTI is appallingly error ridden. It is partial, poorly constructed and unfit for purpose. A casual usage would reveal that. I have two blogposts deconstructing it here and here.  Any company relying on KTI to find appropriate partners would need its head examined.  It doesn’t work.

There is one piece of news. The proposal to kickstart commercialisation now seems to be to give IP away for free. This is a rather radical proposal, and something that if it does go ahead should get the public accounts committee involved as a possible waste of state funds. Researchers in the higher education space get funded in four ways ; direct state grants to the institution, fee income (whether paid by the state or other) , research income (again from state, private, commercial and other sources) and miscellaneous sources such as benefactions, campus events and tourism etc. The bottom line is that there is and will remain a large state, that is taxpayer, involvement in all research. Even researchers in the most privately funded research lab have indirect state funding via their usage of college facilities.

Researchers create or surface knowledge. This may be valuable. It is always in part taxpayer supported. The plan now is to give away this public funded good to a private organization, with a clause that if it works they might eventually pay.  This is similar to the idea of advance market commitments, but differs crucially in that it gives power to the firm. It is in effect yet another subsidizing of private wealth creation by public money. Presumably the argument is that these companies will create jobs, and thats a net benefit (although we see no cost benefit analysis having been undertaken).

Several issues arise here. First, most IP doesn’t pay in the short term. Many of the most valuable and socially impactful inventions and innovations take decades to percolate to use.  There are massive lags in the R&D – innovation process. Companies may not be able to create in a meaningful timeframe any return on the granted IP, so the state would be at an absolute loss. Second, as we know in Ireland, companies are rather adept at using the provisions of the accounting code to show that they are flat broke, barely hanging on, not a bean etc, while delivering fat returns to the shareholders. Trust us they say.. Third, the issue of patents,  or licensing of IP, is extremely complex. A recent Harvard study provides a good overview of the area. A conclusion they draw is that many patenting and IP protection activities are in fact rent-seeking, and that non patent approaches to fostering knowledge may in fact be superior. Patents and other forms of IP protection may in fact be stifling of innovation rather than what they are supposed to be doing, providing a barrier behind which it can take place. They suggest, with evidence prizes, with the majority of rewards being non-monetary. This would be cheap, would allow the IP to be made public, and would enhance research. Yes, there is a danger that the jobs or wealth created would not be in Ireland, but companies wilshing to use such knowledge would in all likelihood work as closely with the discoverers and researchers as possible, and that means locally.

KTI is a classic Irish situation. Its intentions are good, if fuzzy, and its execution execrable. We need to determine first what it is we want from industry academia collaboration, then we need to map in detail what is going on. That is much much more than counting patents.. Finally, we need to determine how best to ensure that gaps in these desiderata are filled. A poorly executed poorly populated database is nowhere required.

The Irish Corporate Tax Debate – Proof and Peers needed

The debate on Irish government and corporate tax rates rages on.  Unusually, this debate is resolving into a discussion between two academics. Jim Stewart of TCD has asserted a number of claims (here, here, here) on the effective tax rate and on the rate of tax evasion and manipulation by MNC’s. Seamus Coffey of UCC has produced a report that suggests that things are not as bad as that.  Not surprisingly these claims and counterclaims have been getting a lot of media attention

It is good to see academics taking a lead on this issue. However, what is of concern to me is that we are seeing a debate on what are in essence unproofed claims. That is to say, the reports and working papers seem not have gone through the usual peer review process. Peer review comes in for some justified flack. But as a mechanism to ensure some degree of bullet proofing of hypotheses, analyses and suggestions, it has enormous merit. My concern is that neither of the two protagonists in this debate have, as yet, published papers on the tax system. Checking SCOPUS, Econlit and Emerald FullText, the three overlapping databases of peer reviewed papers in management and economics, I see no publications whatsoever from Coffey, and those from Stewart are in the main on pensions and financial regulation.

Peer review in publication has a purpose. In the areas of taxation we have a number of journals of international standing that publish papers which are subject to rigorous peer review. A great part of the debate on this area appears (I am not an expert) to revolve around both the correct database to use and the interpretation of certain parts of same. Others internationally have published on these areas, in these journals. Submission, which may be happening, to these journals would achieve three things. First, it would open the debate up to a wider audience and therefore allow a wider perspective, with the result that the analyses can be placed in the literature and in the debate in a more holistic manner. Second, it would ensure that the inevitable errors of omission and commission that all authors are prone to are more likely to be caught, resulting in a more robust argument. Third, would provide face credibility to the research. Credibility in academia is a rather intangible thing. It arises from a long process of publication in peer review journals, engagement in public debate on the basis of that research, willingness to expand the debate  outside the narrow peer review boundaries but within the broad scope of ones competence, and above all a solid publication record. The latter is imperative – without peer review and revisiting ones research there is a weak foundation no matter how competent the person is. Competence needs to be constantly demonstrated and as an academic the best way to do so is via the publication route. We all think our analyses are perfect, our conclusions justified and so on. It is always a shock when people disagree, and prove to you that they, not you, are in fact correct. Thats the benefit of peer review.

The researchers here have been very careful, it seems to me, in their writing, to be as scientific as possible. I for one however would be much more comfortable, given the debate and its importance, if we were discussing papers in the British Tax Journal or International Tax and Public Finance, or Journal of American Taxation Institute, or Bulletin of International Taxation or European Taxation or … you get the idea. Instead we are discussing working papers and internal reports. As academics we need to ensure that the debate on our work is carried out when we have finalised it. We all publish papers on the web, or present them at conferences. Sometimes these are as far as they go, and debate on these can and should be encouraged. But working papers and reports are a stage, not the end, of a journey. Even when a paper is published in a peer reviewed international journal it can and oftentimes is overturned later.  The journey of research is constant.

We need to have debate on the issue of irish corporate tax, and there is a genuine concern about the timelags in publication. That said, the reality is that this issue has been bubbling for years and will do so for years. There is time to submit and resubmit and get published. At the end we have a more robust, more critiqued, hopefully more accurate set of findings. That is when the debate can really take off, but only if we get there.

 

Knowledge Transfer Ireland – Keeping Dead Academic Experts Alive….

Knowledge transfer Ireland is, as I have noted, rather error ridden.  It is designed to allow companies to find experts in academia with whom they can work. This was launched with great fanfare to be a new portal.

Lets say I am a company that wants to look for a TCD based art and design expert, to collaborate on a new project.

In I go, and select Art and Design, and TCD.

Hmm .. John Joshua, the Earl of Carysfort sounds good… classy. Oh, hang on … he died nearly 200 years ago…

 

 

 

 

 

What about this foreign sounding gent.. Le Broquey. I shall get my PA to give him a ring..

 

 

 

 

 

Ok, so maybe you are an architecture firm, and want to consult with someone on sensitive interpretations of norman and later material.  You find Edwin Rae – a wonderful American professor of art history who was one of the experts involved in the post WW2 years in returning to their owners art works looted by the Nazis. Prof Rae was an expert in Irish medieval art and donated thousands of beautiful photographs of Irish medieval churches and sculptures (including those of norman tombs) to Trinity. Through the generosity of TCD’s Art History Department these images are available through TARA (Trinity’s Access to Research Archive). If only it was possible to contact Professor Rae and get him to aid your company… he died about 10 years ago. As the Iron Islanders say “that which is dead shall never die”

 

 

 

 

 

 

It is not just TCD. These errors abound in other universities.

Sadly, EI in designing a knowledge expert portal have ignored RIAN.ie (Ireland’s Open Access Portal) which provides a beautifully-designed and technically-sound extract of the universities’ repositories of actual research (papers, books, book chapters etc.). The repositories are also used to host lots of other things, making the most of the resources & storage space to provide multiple cost-effective services for the universities and univ libraries. But even it is only an aggregation of archives.  It does what it’s supposed to do very well. But it contains theses of past postgraduates and publications of departed colleagues as well as existing material. It and the open access repositories from which KTI are drawn are the wrong sources for a database of current experts. They should have used the current research information systems in all of the universities – just like expertiseireland.com did over 10 years ago (and so much better). They could have read the National Research Platform report or at a pinch asked any librarian or research information staff. Libraries nowadays are so much more than bukes on shelves – the modern university library is the cross platform organic heart of the university. Ignore and belittle it at our peril.

 

 

 

 

Why are Buy to Let Mortgages being allowed fester?

The mortgage crisis is the rancid gift that keeps on oozing.

The publication this week by the Department of Finance of mortgage arrears figures highlights the festering lethargy that has characterised much of the Irish response to the financial crisis.  That it publishes slightly different figures on the same issue as the central bank highlights the embedded inability of the Irish state to engage in any sort of joined up thinking.  The central bank data is of end March, the Department of Finance end April.  They use slightly different presentations and slightly different emphases on the same dataset. To get a full picture of what is going on one needs to read two publications and interpolate two different time series. Why is this effective duplication allowed? Why is it needed?  Why do we not have ONE official source, weekly or monthly or quarterly or whatever, from ONE state agency providing ONE comprehensive dataset?  Do the central bank and department of finance not talk to or coordinate with each other? Does one hand know what the other is doing?

Jackie Lavin – A Meme Girl for Irish Higher Education

Education is a complex matter while reducing it to simple soundbites is easy. Ignorance, in the pure sense of not knowing, abounds when it comes to higher education. Alas, ignorance creates memes that are powerful.