The Unit­ed Nations Envi­ron­ment Pro­gram did a very unusu­al and far-sight­ed thing last year: it asked the CSIRO to pro­duce a ver­sion of its bio­phys­i­cal mod­el of the Aus­tralian econ­o­my for devel­op­ing coun­tries, and to pair that with an eco­nom­ic mod­el which had to be non-equi­lib­ri­um in nature.

The Stocks and Flows Resource Mod­el­ling team at CSIRO Sus­tain­able Ecosys­tems, which main­tains this bio­phys­i­cal mod­el, approached me in July to see whether I would be will­ing to attempt the devel­op­ment of that non­equi­lib­ri­um mul­ti­sec­toral eco­nom­ic mod­el.

A num­ber of read­ers have com­plained that the video of my talk at Google took up too much band­width, result­ing in “jerky” vision. Here are the same two files in a some­what low­er qual­i­ty compression–half the size of the orig­i­nal files.

| Open Play­er in New Win­dow

| Open Play­er in New Win­dow

As one view­er not­ed, it is also fea­si­ble to down­load the files to your PC and view there with­out band­width prob­lems dur­ing play­back.

Google runs a reg­u­lar sem­i­nar series on top­i­cal issues, which I spoke at last week. There was a sub­stan­tial audi­ence (see the quick scan of the audi­ence below) and Google’s staff lived up to their hyper-intel­li­gent and hyper-engaged rep­u­ta­tion.

| Open Play­er in New Win­dow

I gave a pre­sen­ta­tion that com­bined my stan­dard talk on debt and Min­sky, with some expo­si­tion of the Cir­cuit and Min­sky mod­els, befit­ting of an audi­ence to whom sim­u­la­tion is no big deal–unlike eco­nom­ics con­fer­ences where such approach­es are still fringe activ­i­ties.

This is often treat­ed as a “how long is a piece of string?” ques­tion, but The Econ­o­mist has per­formed a great pub­lic ser­vice by allow­ing an easy com­par­i­son of the length of this piece of string across many coun­tries and over time.

Check it out your­self. For Aus­tralian read­ers, house prices today are almost 2.5 times what they were in real terms in 1986; and our price bub­ble (in CPI-deflat­ed terms) turns out to be small­er than some coun­tries (notably Bel­gium’s) but larg­er than the USA’s and UK’s.

Party like it’s New Year’s Eve 1930

I rec­om­mend that you fin­ish the year with a look at the News from 1930 blog, which is pro­vid­ing some “year in review” com­men­tary on 1930 now–including these details on the mar­ket highs and lows. Obvi­ous­ly some things were much worse in 1930 than today–notably indus­tri­al pro­duc­tion and the stock mar­ket:

Mar­ket highs and lows:

Dow indus­tri­al aver­age high of 294.07 Apr. 17; low 157.51 Dec. 16. Rail aver­age high of 157.94 Mar. 29; low 91.65 Dec. 16. Util­i­ty aver­age high of 108.62 Apr. 12; low 55.14 Dec. 16.

I was recent­ly inter­viewed by Eric Tave­nier for the web­site Engineer.net, which is an engi­neer recruit­ment and job search ser­vice in the USA.

Eric was tak­en with my advo­ca­cy of what I called “Engi­neer Cap­i­tal­ists” (in con­trast to the finan­cial spivs who dom­i­nate busi­ness today in the USA) in my inter­view on The Keis­er Report, and want­ed me to elab­o­rate for his audi­ence. The inter­views have been post­ed to YouTube (see below).

For Aus­tralian view­ers, there was an inter­est­ing report in today’s Sun­day Tele­graph on the lev­el of mort­gage debt in Aus­tralia, which now exceeds 100% of our GDP–higher than Amer­i­ca at 95.5%.

Mike Shed­lock (“Mish” as he is known to all) has writ­ten an excel­lent piece on the defla­tion-infla­tion debate, focus­ing on the Achilles Heel of the latter–the fact that it is based on the belief that we live in a “frac­tion­al reserve bank­ing” mon­e­tary sys­tem. He offered to let me cross-post here, and I’ve repro­duced it in its entire­ty below (there’s only one point I’m not sure on–the com­ment that there are no reserve require­ments for sav­ings accounts. From my read­ing of the foot­notes to Table 12 in this Fed­er­al Reserve paper, that’s true of cor­po­rate accounts but not indi­vid­ual ones).

I gave the fol­low­ing pre­sen­ta­tion at the 4th Dijon Mon­ey con­fer­ence (Decem­ber 10–12 2009):

| Open Play­er in New Win­dow

The Depart­ments of Polit­i­cal Sci­ence and of Eco­nom­ics at the Uni­ver­si­ty of Helsin­ki recent­ly held a sem­i­nar enti­tled “Eco­nom­ics: Chal­lenges for Polit­i­cal, Philo­soph­i­cal and His­tor­i­cal Research”. The moti­va­tion was a reor­gan­i­sa­tion of the Uni­ver­si­ty that will com­bine these two Depart­ments. The fly­er for the sem­i­nar adver­tised it in the fol­low­ing man­ner:

This sem­i­nar, orga­nized joint­ly by the Depart­ment of Polit­i­cal Sci­ence, Depart­ment of Eco­nom­ics and Cen­tre of Excel­lence on Glob­al Gov­er­nance Research, will start with reflec­tions on the role of eco­nom­ics and eco­nom­ic stud­ies.

• Can we com­bine eco­nom­ics and pol­i­tics through polit­i­cal econ­o­my?
• Have polit­i­cal and eco­nom­ic stud­ies neglect­ed his­to­ry?

So I’m walk­ing to Kosciusko–now that the ABS Estab­lished House Price Index has cracked its Sep­tem­ber 2008 peak of 131 to reach an all-time high of 134.4 (as of Sep­tem­ber one year lat­er). This renewed bub­ble reversed the trend of falling nom­i­nal house prices that had dropped the index to a low of 123.8 in March 2009.

This lev­el of price volatility–down 5.5% in 6 months, only to rise 8.5% in the sub­se­quent six months–almost match­es the stock mar­ket’s man­ic-depres­sive per­for­mance.