Are you an economist, sitting around the department, running some godforsaken regression estimating wheat price elasticity? Do you secretly wish you had taken finance instead, so that you too could have worn nice suits to work? Are the down payments on the Volvo getting you down? Don’t despair! The solutions to all of your problems are to be found in the graph below:
What is this you ask? Simple: This is a plot of Richard Florida’s Euro-Tolerance index for Europe and the US, together with actual GDP growth. Florida, as you might remember, is the economist-come-city-development-guru who coined the term “the three T:s – Technology, Talent and Tolerance”. These factors, Florida claims, are crucial for economic growth. Last year, Florida decided to expand his city-ranking system, based on “The three T:s”, to us here in Europe. He thus came up with a ranking that looks as follows:
So, what does Florida’s model really say? Essentially, he claims:
a) Being good at High-tech is good for growth.
b) Having a highly educated population is good for growth.
c) Having a people that’s non-conservative and into PC ideology is good for growth. This factor is measured in a “Euro-Tolerance index”.
Regarding the two first factors, I have but one thing to say: “Duh.”
Thus, the Tolerance index is what makes Florida’s theory interesting (and highly rewarding for Florida – 35 000 USD per lecture is pretty decent for an economics prof.). And this is where the graph above comes into play. It shows, essentially, that there is virtually no relationship whatsoever between economic performance during the last 10 years and Florida’s ET-index (to the extent there is, it’s negative). As the ET-index is the only original component of Florida’s theory, this is a pretty big deal.
Still, despite the fact that all the non-obvious parts of his theory appear to be bunk, we can learn a lot from Florida. I have even devised a get-rich-quick scheme based on his approach. It goes like this:
1.) Take established economic theory.
2.) Add PC
3.) Profit!
Feel free to devise potential lecture-circuit winners in comments!
Posted by dobeln at 05:10 AM