Wednesday, October 20, 2010

Economic Literacy

The Irish are the third most economically literate people in the world. No, seriously. That's according to a fascinating paper by Tullio Jappelli (ht Infectious Greed). And that isn't just the opinion of the Irish people, it's the opinion of a sample of top and middle managers in each country - native and expats - scoring the 'economic literacy among the population' on a scale of 0-10.

It probably goes to show why you should always take the results of any survey with a pinch of salt... Though in fairness to Jappelli, he does go on to show a remarkably strong correlation between the economic literacy score and various other, more objective macro-economic scores. His conclusion: in times of economic turbulence and future uncertainty everybody becomes more 'economically literate', whether they want to or not.

Guess we're going to top that global league soon.

1 comment:

  1. In one sense I am not surprised, these days everyone seems to be an expert on subordinated bonds, GDP forecasts, credit defaults swaps etc etc. But if you look at the data in this paper it is rather poor. The main source is an international survey of what business leaders think economic literacy is.
    They supplement that with data from a European survey on ageing, SHARE. I know this data well having written a bunch of papers with it and I think they are stretching its use. The data wasn't designed for the purpose to which they put it and there is no reason to believe it fits the bill. God loves a tryer they say.


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