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Luis Garicano 🇪🇺🇺🇦 Profile picture
Luis Garicano 🇪🇺🇺🇦
@lugaricano
Economist. Professor at LSE @LSEPublicPolicy. Non-resident Fellow @bruegel_org. Recovering MEP.
Nov 13 • 10 tweets • 4 min read
Europe had an effective tool for climate action: the Emissions Trading System (ETS). Instead of expanding this market-based solution, we've built a byzantine regulatory framework that goes far beyond emissions reduction.
THREAD on my post today on the "Compliance Doom Loop"
1/10 Image Costs are staggering: Corporate Sustainability Reporting Directive (CSRD) requires 42,000 companies report 1,052 data points (783 mandatory). Cost: €150K-1M per company annually.
CSRD compliance costs of 12.5% of investment of mid sized firms (EIB).

2/ siliconcontinent.com/p/the-complian…Image
Nov 6 • 8 tweets • 2 min read
Wake-up Europe! Enough of the de-growth agenda!
There is no strategic autonomy while we spend our every waking hour erecting barriers to growth!
THREAD on the post today in Silicon Continent by @pietergaricano.
1/8 Today's Trump victory makes Europe's strategic autonomy urgent. But Europe has lived beyond its means through "luxury rules" - virtuous but growth-hurting policies that were only possible due to US protection and innovation.
2/
 siliconcontinent.com/p/the-end-of-l…
Oct 30 • 9 tweets • 2 min read
The EU AI Act seems designed to allow AI only for routine tasks while hindering its use in high-level problem-solving.

This will endanger European AI startups and significantly damage EU productivity.

THREAD on our post today in Silicon Continent.
1/9 Image An AI bank teller in the EU would need two humans to oversee it. A startup building an AI tutor faces countless hurdles before launching. The is the reality under the EU AI Act—a well-meaning but flawed attempt to regulate AI.
2/
 siliconcontinent.com/p/the-strange-…
Oct 16 • 10 tweets • 3 min read
We keep hearing how solving Europe’s innovation stagnation requires more public spending. But the numbers show otherwise: the EU falls behind in private R&D investment, not public.
A thread based on this week’s blog.
1/10
siliconcontinent.com/p/the-problem-…Image As a share of GDP, Europe spends 0.74% on public sector R&D, compared to the U.S. 0.69%.

The actual R&D gap is in private sector spending, where Europe spends 1.3% of GDP compared to the United States' 2.4%!
That gap is worth 341 billion in R&D spending in 2021. /2
Apr 19 • 7 tweets • 4 min read
New data shows that the EU Commission has blown the chance the NextGen gave it to get the EU on a growth path. Two key elements.
1. Pensions in Spain.
2. Reforms in italy.

The new data is from the ageing report of the EU Commission on the budgetary impact of the pension "reforms"- more below

( h/t @rdomenechv @fernandosols with official data from the Spanish government.)

Small THREAD (1/7)economy-finance.ec.europa.eu/publications/2… The EU NextGen plans gave an unprecedented and powerful stick to the EU Commission to demand reforms and investments in exchange of money. Never has the Commission had the chance to get states to get some reforms going.

In Spain, the EU Commission has been complicit (in spite of numerous warnings) in setting Spain on an unsustainable Fiscal path
(2/7)
Mar 15 • 10 tweets • 5 min read
Some reactions to the (wonderful) Levitt interview.
1) On the @uchicago PhD program and the atmosphere in the department in the 90s (toxic?).
2) On Price Theory and its future at @uchicago and beyond.
3) On the "technification" of economics and the blurring of the "theory-empirics" boundaries.
(link to interview: )
(Thread)
1/npodcasts.apple.com/us/podcast/ste… 1) On the Econ PhD Program. I went in 1992, graduated in 1998. I did not feel the ambiance was toxic. It was tough work, almost brutal, not toxic. I was given a chance I would not have gotten elsewhere. There was nothing personal about the standards. We were getting trained by the best and that was intellectually invaluable -we got the chance of a lifetime. Here are some profs of my first two years (note 5 nobels):
Macro: Sargent, Lucas, Cochrane, Woodford, Stokey, Townsend.
Micro: Becker, Rosen, Murphy, Scheinkman
Metrics: Hansen, Heckman, Zellner.
It was extremely hard, by far the hardest thing I have ever done. But it should be hard. They were trying to put a bunch of kids at the frontier of knowledge.
It was not for everyone, but we knew what we were getting into. My admired supervisor, Sherwin Rosen, then department chair, gave us a "superstar" (he wrote THE paper after all) talk on the first day. He told us half of us would fail in the first year Core (and exit with an MA, is that so bad?), half of the rest would not make the prelims. Of the 50 we were there, maybe 10 would finish the PhD, most of those would never get any citation.
And yet we persisted. We wanted to learn, and were grateful for the hance.
2/n
Oct 1, 2023 • 6 tweets • 3 min read
Prometí hacer un pequeño hilo con datos sobre el estancamiento de la economía española, al hilo de mi entrevista en @elmundoes.
Aquí van 4 gráficos. Al final del hilo, el texto de la entrevista completo. La economía crece por demografía o por productividad.
DemografĂ­a: somos 47 millones.

La ONU estima que a finales de siglo seremos 30.8 millones, con una orquilla entre 21m y 43m: en el mejor caso (con mucha inmigraciĂłn) estancamiento de la poblaciĂłn.

data.un.org/Data.aspx?q=Sp…
Image
May 22, 2023 • 25 tweets • 11 min read
We have seen much about Bob Lucas' macro contributions these days, but he also had a highly influential contribution to the theory of the firm: the "assigment theory of the firm", which explains, for instance, why Musk earns so much (and controls so many resources).
THREAD Image Before Lucas 1978, we had Marshall-Viner: individual firms have U-shaped long-run average cost functions. In equilibrium, each firm produces at the minimum point of this curve, with firm entry or exit adapting to get aggregate production. Resonable for plants, but not for firms! ImageImage
May 4, 2023 • 11 tweets • 4 min read
🚨Stunning document, leaked today supposedly from GOOGLE, on whether there is a "moat" (Barrier to entry) in the LLM space.
The author argues neither Google nor OpenAI have a moat, and open source wins. Thread with critical comment at end:
semianalysis.com/p/google-we-ha… The question of whether one-three players dominate the industry (like Operating Systems or Search) or it is perfectly competitive is hugely important:
1) For consumer welfare: more competition is better.
2) For control of direction/ethics: more competition makes it harder.
Apr 19, 2023 • 12 tweets • 5 min read
Where are we on Climate Change?

Mike Greenstone @UChi_Economics gave a great talk @ChicagoBooth. I will post a few of his charts.

1. Including battery back-up, cost of electricity from renewables is 3x/4x more expensive than from fossil fuels. Image 2. Same for cars. Oil prices need to be quite high for EVs to be less costly: you need oil price at €129 for battery powered car to be more economical. Image
Nov 12, 2022 • 7 tweets • 6 min read
We should all be doing all we can to make @Twitter thrive (@elonmusk or no Musk)- it is a stunning information source.

If you experience Twitter as a swamp, you only have youself to blame. You choose who you follow, block and mute.

A thread in praise of Twitter.
(1/7) In each of the recent unprecedented events, Twitter has allowed anyone to get news far in advance of the mass media, straight from primary sources.
I show key examples on:
- Covid
- Ukraine
- Inflation
- Energy
In each case I quote one RT of mine to show it is not just hindsight
Nov 3, 2022 • 4 tweets • 2 min read
¿Por qué el mejor octubre del milenio, incluida la burbuja?

La maravillosa contabilidad del gobierno: los fijos discontinuos no aparecen como parados cuando dejan de trabajar.
(¡Tampoco como temporales cuando trabajan!) Image ¿Ha aumentando la cantidad de trabajo (medido en horas trabajadas) que se hace en nuestra economía desde que entró este gobierno en mayo del 2018?
No (lĂ­nea roja). Fuente: INE, contabilidad nacional. Image
Oct 19, 2022 • 13 tweets • 4 min read
Al Presidente del Gobierno le gusta acusar a los demás de ser como Truss.

Desgraciadamente, es él y su gobierno quien se acerca peligrosamente al popuismo de las cuentas falsas que tanto le costó al RU. Sin el BCE detrás, España tendría problemas graves. (Hilo) Empecemos por el diagnóstico intelectual.
Muchos (e.g. Sánchez) aplican las lecciones de la crisis anterior a esta.
En aquel momento habĂ­a deflaciĂłn y habĂ­a espacio fiscal. PodĂ­amos y debĂ­amos hacer una expansiĂłn a nivel europeo fiscal y /o monetaria
Aug 26, 2022 • 13 tweets • 5 min read
Six months into this War, for all the good wishes of our leaders, the West is still "helping" Russia.

The economic prospects for Ukraine are dire, with:
i) Ukrainian state finances collapsing
ii) Russian economy resisting
iii) Europe facing a Winter of discontent

THREAD The Ukrainian economy is in a perilous state. GDP is projected to collapse by 45% in 2022.

With revenue collapsing and military spending skyrocketing, the government faces a monthly (!) budget deficit of $5bn out of $100bn GDP.

politico.eu/article/financ…
May 30, 2022 • 10 tweets • 3 min read
Orban is expected to veto today's EU leaders' discussion on the Russian oil ban. But Europe does not need him to agree. As I explain in Politico, a simple majority of 🇪🇺 governments can ban Russia's oil and stop hiding behind Orban's veto.

Thread👇
politico.eu/newsletter/bru… Europe is contributing to prolong Putin´s war. Oil and gas payments account for over half of Russia’s state budget and a lot of it comes from our pockets. 🇪🇺 has sent over €50bn to 🇷🇺 since the war broke out. and one €12bn in aid to Kyiv.
crea.shinyapps.io/russia_counter…
Mar 14, 2022 • 18 tweets • 5 min read
La invasión rusa de Ucrania provocará una crisis alimentaria mundial si la guerra impide la cosecha.

¿Qué puede hacer la Unión Europea para evitarlo? Un artículo reciente del Profesor von Cramon-Tabuadel nos da las respuestas. HILO 1/18 Image En el pasado, la invasión rusa no habría tenido implicaciones agrícolas globales porque la URSS era un importador neto.

Entre 1992 y 2002, Ucrania, Kazajistán y Rusia sumaron 3 millones de toneladas de exportaciones de grano. Ahora superan los 100 millones de toneladas. 2/18 Image
Mar 13, 2022 • 19 tweets • 6 min read
In our meeting in Lviv on Friday, the Vicepremier of Ukraine expressed to @MSimecka and I her worries about the current harvest and planting season.

What can the EU do to avoid a worldwide humanitarian crisis?
Answers in a recent article by Prof. von Cramon-Tabuadel.
THREAD In the past the agricultural implications of Russia´s invasion would have been inexistent. The Soviet Union was a net importer.

Between 1992 and 2002, Ukraine, Kazakhstan and Russia combined for 3 million tons of grain exports.

They now exceeded 100 million tons. 2/
Mar 12, 2022 • 15 tweets • 6 min read
Termino el viaje a Lviv, Ucrania, que hemos hecho una delegaciĂłn de 6 eurodiputados.

Un solo objetivo: ÂżCĂłmo puede ayudar la UE?

Volvemos con una lista de 7 solicitudes urgentes.
HILO
1/ Primero, las buenas noticias. Los ucranianos están fuertes mentalmente y convencidos de que, con nuestra ayuda, pueden resistir y ganar.

Esta guerra demuestra que, incluso en este mundo de la inteligencia artificial y robots, el factor humano sigue siendo clave. 2/
Mar 12, 2022 • 15 tweets • 7 min read
Getting back from a visit to Lviv, Ukraine, as part of a delegation with 5 colleagues from the EP. We met top municipal, regional and national government officials.

One single point in the agenda: How can the EU help?

We come back with a list of 7 urgent requests. [THREAD]1/ But first, the good news. Spirits are high. With more of our help, Ukrainians believe they can resist and win.

The big lesson of this start of the war is that, even in a world with AI and robots, the human spirit still matters. Ukrainians want to fight.
2/
Mar 11, 2022 • 9 tweets • 3 min read
Putin continues to escalate his invasion. The West has responded with historical financial sanctions on the Kremlin and its supporters, but thousands of oligarchs are dodging them.

Here are 2 flaws and 2 ideas for more effective economic sanctions.🧵1/9 Flaw 1: 862 oligarchs are in the list of sanctioned individuals. But the number of rich Russians is much larger.
Also, as @zucman shows, Russia has a huge share of its wealth concentrated offshore. 2/9
Mar 1, 2022 • 6 tweets • 3 min read
Me gusta decir las cosas con claridad:

Los votos en el Parlamento Europeo de hoy muestran que los socios del Gobierno son socios de nuestro enemigo: del enemigo de los ucranianos, del enemigo de Europa, del enemigo de la Paz y del enemigo de la libertad.

HILO con las pruebas. 1. Izquierda Unida se ha abstenido a la hora de pedir el debilitamiento del complejo industrial-militar ruso.

Además, junto a Bildu y Podemos se ha opuesto a ampliar las sanciones a Rusia.