« links for 2011-10-27 | Main | "Hayek on Monetary Policy and
Unemployment" »  Thursday, October 27, 2011  "The Elevated
Position of the Financial Sector"  Wouter den Haan argues that
measures of the financial sector’s contribution to economic
activity in the national income accounts overstate "its true
value to a modern economy. As such, regulation that makes it
more difficult for the sector to perform some activities is not
necessarily a bad thing." This supports the arguments I've been
making about the "mal-distribution of income" in recent years,
so no disagreement here:  Why do we need a financial sector?, by
Wouter den Haan, Vox EU: According to national-income account
data, financial institutions are responsible for an important
fraction of what countries produce each year. A standard way to
measure a sector’s contribution to GDP is to calculate its value
added, that is, the difference between the value of the products
produced minus the value of the products used in production.
This “value added” is