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Chris Dillow: Stumbling and Mumbling

Stumbling and Mumbling is a personal blog of Chris Dillow, an economist who spent eight years with one of Japan’s largest banks. He blogs about British politics and provides thoughtful analyses on the British economy and sports.

A behavioural economic case for Brexit

Is there an economic case for Brexit after all? Superficially, it seems not. Almost all serious economists agree that less close trading arrangements with the EU and tougher immigration controls will make us poorer than we would otherwise be even in the event of a smooth Brexit, and the Minfordians protestations to the contrary are not credible. Behavioural economics, however, suggests there might be a case. This rests upon two pillars. Pillar one is the Easterlin paradox – the finding...

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“Chaos” with Ed Miliband

David Cameron’s infamous 2015 tweet that we face a choice between stability and strong government under him or chaos with Ed Miliband has long become a joke – a cliché, admittedly, but a good one. In a sense, this is unfortunate because it contains some truth: from a Tory point of view, a Miliband government would indeed have been chaotic. This isn’t because he too would have unleashed the Brexit clusterfuck. He wouldn’t. Back in 2015 less than 10% (pdf) of voters thought that the EU was...

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Blind to luck

In a good article on how graduating in a recession does long-lasting damage to one’s career, Tim Harford says “it’s easy to overlook luck.” It is indeed. Evidence for this has been uncovered in experiments by Nattavudh Powdthavee and Yohanes Riyanto. They got students in Singapore and Thailand to bet upon tosses of a fair coin and found that people were willing to pay to back the bet of students who had correctly called previous tosses. “An average person is often happy to pay for what...

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Changing the agenda

It’s hard to believe now, but only three years ago the country was not divided between Brexiters and Remainers. In fact, the very idea of such a split would have seemed as absurd as Swift’s division between big-enders and little-enders. Yes, there were a few fanatical Brexiters but most of us gave the matter no thought - including, we now know, most Brexiters themselves. It was a low-salience issue. This fact has enormous implications for how we should think about Labour party policy. It...

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Against debate

Everybody, it seems, wants a debate. Theresa May wants to debate her Brexit deal with Corbyn; Grace Blakeley invites her critics to “come debate me”; and Sarah O’Connor wants a “nuanced debate now about what we value in the economy”. Include me out. Most debates – and especially televised ones between politicians – are worse than a waste of time. They are downright pernicious. A debate, like many things, is a selection device. The question is: does it select for the truth, or against it?...

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Strategic vs parametric thinking

Brad De Long makes an important point when he says that rational thinking depends upon context, and we must always ask: “are we playing some kind of game against nature, or are we playing against another mind?” If it’s the former, then standard parametric thinking is appropriate (max U subject to constraints). If it’s the latter then we are in the realm of game theory. You might think the distinction obvious. Many people, however, fail to make it. As Meir Statman says: Think of...

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Blinded by ideology?

Andrew Neil tweeted yesterday that low gilt yields were a sign that “at least the credit markets still have confidence in the country” to which I replied that they were, to the contrary, a sign that markets expect low economic growth, partly thanks to Brexit. This was a cue for a mini pile-on by Neil’s Brexiter followers claiming that low yields are indeed a sign of improved creditworthiness. You shouldn’t need me to tell you this is pish. The government’s creditworthiness has never been...

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Against foxes

Nick Cohen makes a good point: Political correspondents, who couldn’t find a big picture in a multiplex, buzz around Westminster hyperventilating about the number of letters sent to the 1922 Committee, and the replacement of minister X with junior minister Y, as if it mattered in the slightest. The cliché is right. It is indeed easy to miss the wood for the trees. The fox (pdf), who knows many things, can indeed miss the big picture which the hedgehog (who knows one thing)...

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Why the left needs “bottom”

Conservative men of a certain age used to speak approvingly of some men (it was always men) as having “bottom”. By this they meant a combination of a moral code and loyalties that gave them a solid reliability. I was reminded of this by these words of John McDonnell: We’ve got to convert ordinary members and supporters into real cadres who understand and analyse society and who are continually building the ideas. This is absolutely bang right. Underlying his words is a fear –...

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Angry Brexiters

Brian Cox asks a good question: The thing I don’t understand about these Conservative MPs is that they are such angry people. They haven’t done badly out of Britain - they aren’t on the receiving end of their own policies. And yet they want to smash everything up. The EU, The Union and now their own party. It’s no coincidence that many of those he has in mind such as Rees-Mogg and Johnson - though we might add Farage and Banks – come from posh backgrounds. We know that our...

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