Welcome To The Pleasure Dome

The Barbados Economics Society has decided to dip its toes into the waters of blogging (see http://barbadoseconomicsociety.blogspot.com). In addition, one of their first posts is a recent address by the central bank governor, Dr. Delisle Worrell, who takes issue with several aspects of modern economics and modern economists. I recommend reading his address. It's a good challenge on many fronts. It's good to air some issues for debate in economics, and doing so in Barbados is also refreshing, or could be if it generated a discourse within the profession there.

For my part, in reading the governor's remarks, I disagree with his comparison of exchange rates with physical distance, in defence of fixed exchange rates. Even if you want to say that exchange rates are not prices, they do not measure a fixed relationship, but rather a relative relationship, between countries/economies, so the notion of their being flexible is not so strange. The same logic applies to a composite measure of relative standing, such as the human development index (HDI), which he argues to be a more 'reliable indicator of the quality of life in any society' than GDP. Whether or not exchange rates are realistic or good relative measures would be a different debate.

Let the jousting begin.