EconLog Archive
Behavioral Economics
Judging Poverty
During our poverty debate, David Balan mentioned that a colleague of his was troubled by the very phrase “How Deserving Are the Poor?” And she’s hardly alone. Poverty analysts are far more likely to morally condemn the middle class for being judgmental than the lower class for being irresponsible. Indeed, the more irresponsible behavior the .. MORE
Labor Market
Alan Krueger RIP
Shocking news today: Noted Princeton University economist Alan Krueger died this weekend. He was only 58 years old. Alan was the chairman of President Obama’s Council of Economic Advisers from 2011 to 2013. He was also co-author, with David Card, of the famous book that challenged the conventional wisdom on the effects of moderate increases .. MORE
Books: Reviews and Suggested Readings
Peter Berger’s Historical Perspective
I’m going through various books in my library, trying to decide which ones to give to friends, which to donate, and which to discard. I almost offered to give sociologist Peter L. Berger’s 1986 book, The Capitalist Revolution, to a friend but, before doing so, reread sections I had marked up. I’m keeping it. .. MORE
Finance
Why does the Fed oppose narrow banking?
John Cochrane has an excellent new post on narrow banking, the best post I’ve read in a long time. Cochrane discusses the Fed’s opposition to a new business structure called “narrow banking”. A narrow bank takes deposits and invests the money in interest-bearing reserves deposited at the Fed. Because that’s all these banks would do, .. MORE
Obituaries
Chicago’s Lesser-Known Free Marketeer
I’m now free to post my tribute to Harold Demsetz, which appeared in the Wall Street Journal on January 13 (January 14 print edition.) It was titled “Chicago’s Lesser-Known Free Marketeer.” Here it is: Harold Demsetz, who died Jan. 4 at 88, was one of the greatest economists of the 20th century not to win .. MORE
Economic and Political Philosophy
Another War on Drugs and Deplorables?
I have sometimes shocked intellectuals who claim to support Trump by telling them that they cannot be card-carrying Deplorables if they don’t meet three conditions: (1) driving a pickup truck; (2) regularly carrying a pistol; and (3) shopping at Walmart. Three more criteria should probably be added: (4) being a God-fearing Christian; (5) drinking; and .. MORE
Economic Education
Are economics textbooks too expensive?
Greg Mankiw has an interesting article that discusses the teaching of basic economics. This caught my eye: A common argument used to explain the high price of textbooks involves the principal agent problem between student and instructor. The instructor chooses the book, often oblivious to its price. The student has little choice but to buy the .. MORE
Economics of Crime
A Signal of Corruption
I don’t support scandals, but scandals support me! Thanks to #CollegeGate, I’m in the next issue of TIME. Highlights: Consider why these parents would even desire to fake their kids’ SAT scores. We can imagine them thinking, I desperately want my child to master mathematics, writing and history — and no one teaches math, writing and .. MORE
EconTalk
Chinese authoritarianism and Western transparency
In a recent EconTalk, Russ Roberts and Amy Webb discussed how Artificial Intelligence (AI) may be the tool authoritarian regimes (and, particularly, China) always needed to fully implement the sort of widespread social control they always aimed for. I found Webb’s arguments sometimes not so persuasive. For example, the fact that big companies in China .. MORE
Uncategorized
Shark Tank Take Two- Pop Culture Myths that Need Undoing
ABC’s Shark Tank is popular culture’s take on entrepreneurship and raising the capital fueling the earliest stage of a business. Obviously, the idea of a shark is a negative one. Yet in this crucial formative stage of raising funds, ‘angel’ is the term often ascribed to investors in the real-world. Those who take the risks .. MORE
Labor Mobility, Immigration, Outsourcing
David Frum Accidentally Makes the Case for More Immigration
My fellow immigrant from Canada, David Frum, has a long article in The Atlantic in which he argues for cutting legal immigration in half. The whole piece, titled “If Liberals Won’t Enforce Borders, Fascists Will,” is worth reading, partly because he makes a serious case for reducing immigration and partly because, along the way, he .. MORE
Economic Education
Mankiw on teaching economics
David Henderson directed me to a new paper by Greg Mankiw, which discusses principles of economics textbooks. Having taught for many years using Mankiw’s principles text, and then more recently writing my own (with Steve Rubb), I was naturally interested in taking a look. While there is lots of good stuff, my favorite part discusses .. MORE
Behavioral Economics
Some Men Just Want to Watch Mexico Burn
In the introduction to La Vida, famed anthropologist Oscar Lewis unfavorably compares Puerto Rico to Mexico: But perhaps the crucial difference in the history of the two countries was the development of a great revolutionary tradition in Mexico and its absence in Puerto Rico. Puerto Ricans sought greater autonomy from Spain during the nineteenth century, but .. MORE
Economic Education
Mankiw on Publishing Textbooks
Harvard economics professor Greg Mankiw, who has become a multi-millionaire by writing and honing his very successful economics textbooks, has written a thoughtful article titled “Reflections of a Textbook Author.” I highly recommend the article, even to people who have no intention of ever writing a textbook. You get to see the considerations that led .. MORE
Behavioral Economics
Hypocrisy and Hyperbole
I teach at a public university. Am I a hypocrite? Bernie Sanders’ net worth is about $2M. Is he a hypocrite? How about vegetarians who regularly eat meat? The right answer: It depends on the details of the speakers’ moral position! Consider the following cases. 1. You say, “It is always morally wrong to eat meat,” .. MORE
Fiscal Policy
Excessive debt doesn’t cause inflation
I cannot resist responding to a recent article by Stephanie Kelton, explaining the MMT view of public debt: Since the government’s budget deficit is, by definition, the difference between what it spends and what it collects in the form of taxes and other payments to itself, it may seem reasonable to call it “overspending” when .. MORE
Macroeconomics
In search of monetary equilibrium
The title of the post has a double meaning: the search for a policy that leads to monetary equilibrium, and the search for a coherent definition of the concept. Later I’ll show that these two meanings could be more closely related than you might suspect. I’ll use an imaginary dialogue to illustrate the problem. Me: .. MORE
Labor Market
Jacob Vigdor on Seattle’s $15 Minimum Wage
In the latest EconTalk, both host Russ Roberts and economist interviewee Jacob Vigdor do a great job of discussing Vigdor’s and his colleagues’ 2016 study of Seattle’s large increase in the minimum wage. Russ asks pretty much all the right questions at all the right points. I highly recommend it. A few highlights follow. First, .. MORE
Law and Economics
Gail Heriot
I read about 20 to 25 web sites a day and one I look at regularly is Instapundit. For those who don’t know, it was started by University of Tennessee law professor Glenn Reynolds some years ago and the title is descriptive. He and his co-bloggers post almost 100 entries a day and it is .. MORE
Economic Education
The Law of Demand Strikes Again
The attraction then, as now, was the Columbia River, which we can glimpse a few blocks to our left. Bitcoin mining—the complex process in which computers solve a complicated math puzzle to win a stack of virtual currency—uses an inordinate amount of electricity, and thanks to five hydroelectric dams that straddle this stretch of .. MORE
Economic Methods
A Million-Dollar Education Bet
This is too rich for my blood, but wow: Many private college presidents are more than a little frustrated with the way journalists and politicians love to quote Clayton Christensen. The Kim B. Clark Professor of Business Administration at Harvard University, Christensen famously predicted in a 2011 book called The Innovative University that as many as half .. MORE