Monthly Archives: January 2016

Taxes – You are Here (and its not where you think)

So the general elauction is in full swing. And the theme of GE2016 is “Irish taxpayers are uniquely, punitively, outrageously taxed, and thats causing all our trouble:. Pretty much every party, bar the courageous (in a Sir Humphrey Appleby way) Social Democrats are pledging to cut, slash, reduce….

Meanwhile, away from the fevered fantasies of Irish political parties, in the real world, this is where we are. Data from OECD Taxing Wages 2015, 2014 data : here

First, the total : the tax wedge, defined as  the difference between total costs to the employer (so including PRSI and other social security) vs what the employee gets (so including USC and PRSI). Oh, look….


Then tax on the average wage (a shade under €700 per week for 2014 from CSO data) by family type. Cash transfers here are the standard benefit packages such as childrens allowance or its equivalent.


Finally at different percentages of the average wage. Ireland is in red.

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Feeling overtaxed is fine. Claiming that we are, at least in the comparative sense, is not. Its not just a misreading, its a misrepresentation. We get the politicians we elect. If we elect people who look us in the eye and lie a hole in a pot, so be it.

Silver fix, fixes in silver, Holmes’ razor, poisson distributions and MRDA

Last weekend I and some others posted a working paper on gold and silver price suppression (there’s no evidence for same) on SSRN. In it we noted that there were large movements in and around the times of option expiries, and mused that this was similar to patterns in other markets where traders manipulate the price. Then this happened.

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Social Democrats and Education

So, the Social Democrats have launched their “not a manifesto“, making them second to Renua in the early stages of the 2016 General Election. As I reviewed the Renua offering on education, so as not to be accused of partisanship, I will, time permitting, do them all. So what do the SD’s promise on education  Continue reading

Psychological barriers in oil markets: Some research evidence

Screenshot 2016-01-12 07.57.38With the recent collapse in oil, this may be of interest. A research paper (co-authored with two other colleagues) and published in Energy Economics . Full paper available here . Given that the ppb is heading down towards and perhaps through 30$ what might we expect?


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WTI and Brent futures are tested for the presence of psychological barriers around $10 price levels, applying a multiple hypothesis testing approach for statistical robustness. Psychological barriers are found to be present in Brent prices but not inWTI prices,which is argued to be due to the more prominent role that Brent plays as a global bencchmark and, based on recent behavioural finance research, the greater complexity inherent in Brent fundamental value determination.

Brent particularly displays evidence that when breaching a $10 barrier level from below with rising prices, the trend is for prices to fall on average subsequently. Similar behavioural-based patterns are evidenced at the $1 barrier level for the WTI–Brent spread. We show that psychological barriers only appear to influence prices in the pre-credit crisis period of 1990–2006, with such effects dissipating during the crisis and as markets reverted back to wider economy focused fundamentals.

A range of reaction windows are applied with the main finding being that the trading potential around such psychological barrier levels is primarily in the immediate 1–5 days following a breach. The research contributes to the scant existing research on psychological influences on energy market traders, and suggests strong potential for further application of behavioural finance theories to improving understanding of energy markets price dynamic

Source: Psychological barriers in oil futures markets

Economists and Climate

People often wonder what use are economists.  In terms of climate change this is particularly appropriate.  Most economists are not very absorbent, and cannot be used very effectively as flood defences.  Nor can they be effectively deployed to scrub carbon from the atmosphere, and as a profession have a general tendency to produce hotter rather than cooler air thus rendering them particularly useless at cooling.  However, all is not lost, perhaps.

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