The following is a guest post by David Berri, a Professor of Economics at Southern Utah University. He is also the lead author of Stumbling on Wins, the general manager of the sports-economics blog Wages of Wins, and is a frequent contributor to the Freakonomics blog.
Soon after presents are opened on Christmas morning, the NBA – after a lengthy lockout – will finally open its 2011-12 season with a slate of five games. Although NBA fans are pleased the lockout has ended, they’d probably prefer that it had never happened. Unfortunately for fans of pro sports in North America, such disputes frequently cause games to be missed. But maybe there is a free market solution to this problem to be found in, of all places, Europe.
Although we tend to think such disputes are a contest between labor and management, frequently the real conflict – as noted in my recent posts here — is between small and large market teams. In North American sports, team revenue seems to depend on the size of the market where the team plays. Read More »
Norway is in the midst of a butter shortage. Yes, butter.
There are a few explanations: low-carb diets have been popular, and the summer of 2011 wasn’t ideal for dairy. Olav Mellingsater for CNN writes:
A rainy summer reduced the quality of animal feed, decreasing milk production in Norway this year by 20 million liters (5.3 million gallons) compared with the same period last year, the cooperative said.
Stores are currently rationing butter sales, and some entrepreneurial spirits are selling butter online at 30 times the normal cost. There are also some gray market characters emerging from the crisis. CNN reports:
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Authorities detained a Russian citizen Monday who they said was trying to smuggle 90 kilograms (200 pounds) of butter from Germany into Norway. Food safety authorities then warned people not to buy butter from strangers, Norway’s TV2 reported.
The Economist features an interesting chart this week, showing the correlation between a country’s wealth, and the average amount its citizens spend on Christmas gifts. Note the two outliers, the Netherlands and Luxembourg.
Despite their considerable wealth, the Dutch have clearly maintained their minimalist austerity chic. Not the case in Luxembourg, which has the highest GDP per capita in the EU, and the third highest in the world. Read More »
On Jan. 1, 1999, the euro was launched in electronic form. A few years later, amidst much fanfare, 12 European countries began replacing beloved national currencies with the euro, and the currency rapidly became the tender of choice across Europe. Wim Duisenberg, the then-president of the European Central Bank applauded the new currency: “By using the euro notes and coins we give a clear signal of the confidence and hope we have in tomorrow’s Europe.”
Almost ten years later, things look a little different. The financial crisis that has brought much of the developed world to its knees looks poised to bring down Europe’s single currency as well. The cover of this week‘s Economist reads “Is this really the end?” Inside, the magazine offers the following observation:
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The chances of the euro zone being smashed apart have risen alarmingly, thanks to financial panic, a rapidly weakening economic outlook and pigheaded brinkmanship. The odds of a safe landing are dwindling fast.
In today’s Journal, David Wessel nails it. (If you ask me, Wessel nails it consistently.) First, he asks the question that needs to be asked:
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It has been two years since the flames were first spotted in Greece, yet the blaze still hasn’t been put out. Now it has spread to Italy.
It’s been five years since the U.S. housing bubble burst. Housing remains among the biggest reasons the U.S. economy is doing so poorly.
On both continents, there is no longer any doubt about the severity of the threat or the urgent need for better policies. Yet the players seem spectacularly unable to act.
What’s taking so long?
How is California more like Europe than the United States? We can think of a few ways, but one of the most interesting involves the rights of artists. As this recent story in the New York Times points out, in 1976 California passed a law that guarantees artists 5 percent of the profits in a later sale of their artwork. In doing so, California copied France and a number of other nations, in which such profit-sharing with artists is required by law. In the rest of the United States, by contrast, artists have no right to the profits a collector might make when they resell their artwork.
From an economic point of view, the California rule is a little strange. As we discussed in a previous post, if I sell my house and in five years it rises substantially in value (an anachronistic example these days, we recognize), I don’t get a cut of the windfall. A deal is a deal. Read More »
Along with a shaky currency, and fears of sovereign debt defaults, Europe has another problem on its hands: psychiatric disorders are now the biggest source of illness among Europeans.
A new study in European Neuropsychopharmacology shows that 38.2% of Europe’s population grapples with some kind of psychiatric problem. Depression, insomnia and anxiety top the list. Only one third of those afflicted receive treatment. Hans-Ulrich Wittchen from the Technical University of Dresden led the three-year study of mental health in 30 countries. Here’s part of the abstract:
No indications for increasing overall rates of mental disorders were found nor of improved care and treatment since 2005; less than one third of all cases receive any treatment, suggesting a considerable level of unmet needs. We conclude that the true size and burden of disorders of the brain in the EU was significantly underestimated in the past. Concerted priority action is needed at all levels, including substantially increased funding for basic, clinical and public health research in order to identify better strategies for improved prevention and treatment for disorders of the brain as the core health challenge of the 21st century.