Fiscal Policy

UK Sovereign Debt Default Risk (or the absence thereof)

A recent empirical paper by Paulo Mauro and Jing Zhou suggests that even when r – g < 0 (i.e. the interest cost of government debt is less than the growth rate of the economy), the risk of sovereign debt default may still be of concern for both advanced economies and emerging markets:

“Sovereign default histories demonstrate that after prolonged periods of low differentials, marginal rates can rise suddenly and sharply, shutting countries out of financial markets at short notice.”

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Gender Inequality

Ben Shapiro et al are wrong about the Gender Pay Gap

The gender pay gap “is an idiotic statistical lie” writes Ben Shapiro, because “it fails to take into account job choice, time in the workforce, hours worked, or any other factor that would remove the vast bulk of the pay gap.” The aforementioned argument has gained wide-ranging popularity over the last few years among political commentators such as, though certainly not limited to, Christina Hoff Summers (the Factual Feminist), Dave Rubin (The Rubin Report) and Paul Joseph Watson (Infowars editor). It’s a notion that is routinely deployed in conversations concerning gender discrimination and the treatment of women in labour markets. However, this prevailing belief – that the gender pay gap is a mythical construct, as it negates the existence of significant gender discrimination once certain factors have been accounted for – is statistically fallacious and reflects a primitive understanding of economics and econometrics.

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