lifestyle leader

- China's looming property bubble: the opening anecdote about a cabbie-turned-real estate broker reminds me of a few of the stories we heard out of Thailand before their economy bottomed out in 1997. It is only an anecdote, but there are worrying numbers to back it up. China's careful tighting of banks' reserve requirements and mortgage regulations since the beginning of the year also suggest they're paying very close attention - investors seem to think more monetary tightening is on the way.

As a side note, you can be sure that China's decisions regarding the valuation of its currency will have everything to do with their delicate internal economic balancing act, and very little to do with all the noise foreign governments are making.

- The End of An Era: Dani Rodrik believes that the IMF's February policy note - which acknowledged the occasional usefulness of capital controls - signals a huge shift in global economic orthodoxy. I'm not so sure it's as momentous as that, and it's unfortunate that Dani-boy is plugging a re-hash of the Tobin Tax. But I like Dani's suggestion that the IMF, now liberated from denial, can explore more closely when and how capital controls might prove useful.

This is important, because most capital controls aren't usually very good at doing their job. They are certainly no substitute for strong economic policymaking. But sometimes strong policy is not enough: for countries that are currently importing inflation from the low-interest rate economies (see Brazil, and Taiwan, and Scandinavia, and... and...) controls might be required to help slow the capital inflows before they become de-stabilizing. Brazil, for example, has already moved in this direction.

- Reinforcing pre-conceived notions alert!: higher cigarette prices in developing countries will probably reduce smoking. This abstract amuses me both for its inpenetrable language and in the number of times it uses the word "estimate." What is probably absent from this paper is any recognition of the underlying psychological appeal of smoking or the black-market side effects of raising prices on smokes. But hey, they're just economists right?

- Alternative health-care bills (The Onion).