Wednesday, February 11, 2009

As I’ve recently endorsed doubts on the ability of economists to accurately predict – on the basis of mathematical models - how national and trans-national economies will behave, I thought I’d now cite a chap called Richard Bronk. He’s just published a book called "The Romantic Economist" and this is its blurb - Since economies are dynamic processes driven by creativity, social norms and emotions as well as rational calculation, why do economists largely study them using static equilibrium models and narrow rationalistic assumptions? Economic activity is as much a function of imagination and social sentiments as of the rational optimisation of given preferences and goods. Richard Bronk argues that economists can best model and explain these creative and social aspects of markets by using new structuring assumptions and metaphors derived from the poetry and philosophy of the Romantics. By bridging the divide between literature and science, and between Romanticism and narrow forms of Rationalism, economists can access grounding assumptions, models, and research methods suitable for comprehending the creativity and social dimensions of economic activity. This is a guide to how economists and other social scientists can broaden their analytical repertoire to encompass the vital role of sentiments, language, and imagination. You can read more here. It may, of course, be complete nonsense. But I bet it’s a lot more fun to read than any other book on this dismal [non]science.

Talking of a trans-national economy . . . This writer – from the Ambrose Evans-Pritchard School of EU studies – claims to drag more of Brussels’ skeletons out of their cupboards. As well as giving us the latest Chapter in M. Sarkozy’s Napoleonic narrative. His cryptic question is - Is the EU cracking up?

More domestically, one of Spain’s leading companies in the field warns us that house prices will fall another 20% this year and predicts that the hangover of unsold properties could reach 1.5 million by the end of the year. As mentioned a few times, this is because the lead time on construction is so long here, new properties are still being put on the market at a faster rate than they’re being sold. And this will go on for a while yet. And it seems only yesterday that a leading constructor was telling us prices wouldn’t fall further because he’d rather give his stock to the banks than knock down the prices on them. Not that this isn’t also happening, of course. To the benefit of lucky[?] bank employees.

Meanwhile, one of the biggest developers to go bust has upped its November forecast of losses for last January to September from 230 million euros to a mere 2.3 billion euros. They obviously used the same calculator as all of the country’s electric companies did when estimating January consumption.

Well, I lodged a complaint about Ya.com at the Consumo office this morning and what a pleasant experience this was. Although the guy at the desk was in a quasi-military, commissionaire’s uniform, he was extremely charming and helpful. This, in itself, is not uncommon here, in response to me smiling and speaking in my accented Spanish. We foreigners are still pretty exotic up here in Galicia. But, when he didn’t ask to see my ID or tell me I’d have to come back with a missing document and then politely declined a copy of my passport and/or residence card, you could’ve knocked me down with the proverbial feather. When I later related all this to my partner, she rightly pointed out that, if you’re not treated well at an office for consumer complaints, you might as well shoot yourself. Or at least emigrate.

Finally, an amusing insight into local politics from Lenox at Spanish Shilling . . .

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