Ülo Ennuste Economics

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Letter 25.VI 14

Letter to the Editor of the FT 25.VI 14

Sir – You have published a quite questionable Paper: June 23, 2014 7:11 pm „If Finland is the best Europe can do we should be worried“ By Risto Penttila
Seroiusly indeed from the macroeconomics raqurse:
a) “Viewed through the lens of the Gini index – the most common indicator of income inequality – that looks like a big success. Finland registers about 25, far lower than the European average of about 30.“ – good heavens – who e.g. among serious Nobelists or from the Eurostat is saying that Gini index of income inequality is presently the most common indicator, or if Gini why not of consumption, or why not complementary also regionally  Gini indicators synthesize etc and of course in parallel the same quint indicators etc.
b) “But Finland’s experience shows that having well-functioning institutions is not a cure-all. The country ticks all the boxes: well-protected property rights, good schools, reliable infrastructure, predictable macroeconomic policies. It is one of the biggest spenders on research and development in the world. Yet the productivity of Finnish industries has plummeted since 2009.“ – „plummet“ – Collins: „1. to drop dawn“ – since 2009 plummeted and not jet dawn? Isn’t that the proof of excellence of Finnish institutions even in the state of enduring bad luck (e.g. with the big nasty neighbor)?

c) “Finland’s economy has not grown in five years.“ – according to the Eurostat in the previous five year period Finland’s real GDP pc has not grown just in to years.

d) Moral: It seems Finland is really almost certainly the best Europe can do in the case having bad luck to have almost the same scale of border length with Russia as Ukraine has – btw in that kind of situation it is at the very moment laughable to hint that the lowering of Gini index is no good for Finland and economy has plummeted etc – and lets hope Mr Stubb has enough guts to enhance additionally public expenditures for the defense.

Dr Ü.Ennuste

June 25, 2014 - Posted by | Uncategorized

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