EconLog Archive
Behavioral Economics
“Socialism”: The Provocative Equivocation
The socialists are back, but is it a big deal? It’s tempting to say that it’s purely rhetorical. Modern socialists don’t want to emulate the Soviet Union. To them, socialism just means “Sweden,” right? Even if their admiration for Sweden is unjustified, we’ve long known that the Western world contains millions of people who want .. MORE
Macroeconomics
“Things have changed”
The Wall Street Journal describes the views of Judy Shelton, one of the names mentioned for a position on the Fed’s Board of Governors: She wrote critically in the weeks before that election about how the Fed’s low- rate policies were boosting wealthy investors and corporations at the expense of working Americans and retirees with .. MORE
Finance
George Warren, market monetarist
Market monetarists like myself have criticized the “wait and see” approach used by many macroeconomists. This refers to the tendency of economists to watch how the economy plays out over time, after a new policy initiative. This technique is not reliable, as the economy is constantly being buffeted by all sorts of shocks, and it’s .. MORE
Books: Reviews and Suggested Readings
An Alternative Perspective on Anglo-American Economic Liberties
As economic freedom gains traction in different spheres of the world, with marked successes most notable in Asia of late, understanding how markets come about within a state of economic freedom are tied closely to limitations on arbitrary executive powers. Michael Patrick Leahy’s Covenant of Liberty: The Ideological origins of the Tea Party movement assess .. MORE
Books: Reviews and Suggested Readings
GOT’s final season may have been disappointing, but not on politics
There are a number of remarkable things about Game of Thrones. One is of course how millions of people are, synchronously, watching the series’ ending. This sort of collective TV viewing was once reserved for big sports matches, or perhaps for a few great rock music concerts, like LiveAid. Many people have commented on the .. MORE
Economics of Education
Letter from an “Anti-School Teacher”
I recently received this email from a self-styled “anti-school teacher.” Reprinted unchanged with permission of the author, Samuel Mosley. Dear Professor Caplan, My name is Samuel Mosley. I studied economics at Beloit College, my advisor was a former graduate student of yours, Laura Grube. I recently read The Case Against Education and it explained so much of .. MORE
Incentives
Virtue and vice signalling
Robert Shrimsley has an amusing piece in the Financial Times, which discusses virtue signalling: Virtue-signalling, for those who have never felt drawn to the term, is the apparently modern crime of trying to be seen doing the right thing. The implication is that the virtue-signaller does not really believe what they are saying but simply .. MORE
Obituaries
Alice Rivlin Reminiscences
I discussed the late Alice Rivlin here and here. Here are one personal reminiscence about Alice Rivlin and one thought about a 1993 or 1994 Wall Street Journal op/ed she wrote. At the December 1988 American Economic Association Meetings, Alice was on a panel with Martin Feldstein and Mike Boskin. The chair was Joe Stiglitz .. MORE
Obituaries
Alice Rivlin Continued
Yesterday, I posted some highlights from a 2002 interview with Alice Rivlin. Here are more highlights from that interview. Speaking Truth to President Clinton Then we went back and worked on the draft and sent it over to him. He read it, and we had another meeting. He had clearly read it, and he’d marked .. MORE
Economic Methods
Recognizing a Tyrant or Tyrant-To-Be
Societies are made of more than one individual. If a ruler governed only one individual, it would be easy to find whether or not he is a tyrant: just ask his single subject. Does “society” love its ruler? But in any actual country, the fact that a minority or even a majority of the ruled .. MORE
Obituaries
Alice Rivlin RIP
Economist Alice Rivlin died Tuesday at age 88. She was my favorite liberal (in the modern, not classical, sense) economist. She called it the way she saw it and was generally regarded by all sides as independent. That sometimes got her in hot water with her fellow Democrats. I have two stories about her, one .. MORE
Economics of Health Care
A little bit of knowledge is a dangerous thing
Generally speaking, there’s an advantage to being better-educated. But is this always true? There are actually quite a few cases where education leads people astray. Thus it is often better educated people who say silly things like “IQ doesn’t measure anything important”. Occasionally, being somewhat well educated leads one astray, whereas being highly educated leads .. MORE
Economic Education
My Classes in Madrid
This summer, I’m teaching two classes for Universidad Francisco Marroquín in Madrid. Namely: 1. A Short Course in Labor Economics, June 10-July 4, Mon-Thurs, 4:30-6 PM. 2. Face-to-Face, June 10, 17, 24, and July 1. One week on each of my four books. If you show up, please say hi!
Business Economics
Coming Airline Competition
An invaluable source of information on transportation is Reason Foundation analyst Robert Poole. In his latest post, dated May 13, Bob Poole writes: The ULCCs [ultra low cost carriers] continue to grow and are among the world’s most profitable airlines. Frontier, for example, last year signed a code-sharing agreement with Mexico’s Volaris, adding 12 more .. MORE
Books: Reviews and Suggested Readings
Rejoinder to Moller on Immigration
Moller’s response on immigration also leaves me unmoved. Point-by-point reply, with Moller in blockquotes. I agree with Caplan that we should have high levels of immigration for both moral and self-interested reasons, and that a great deal of resistance to this traces back to confused zero-sum thinking about trade and jobs, or to xenophobia. So .. MORE
Finance
Trusting the State: the Stock Market Case
Recent stock market gyrations illustrate one interesting phenomenon. Each time the administration promises an easing in the “trade tensions” it itself created, the stock market picks up. Every time the promises are not realized, the market drops. And the process starts again. Today’s Wall Street Journal writes (“Stocks Turn Higher on Trade Hopes,” May 15, .. MORE
Price Controls
Sanders and AOC’s Elitist Credit Card Caps
Senator Bernie Sanders and Representative Alexandria Ocasio-Cortez have announced plans to introduce legislation that would limit the interest rate that credit card companies are allowed to charge customers. Although there is currently no federal limit, some state governments have limits. Sanders and Ocasio-Cortez propose capping the annual rate of interest on credit card debt .. MORE
Labor Market
The real wage myth
After the 2016 election, several pundits suggested that the Trump victory reflected frustration with stagnant real wages. Unfortunately, this argument is based on a misconception. The average hourly earnings series at the FRED data site only goes back 12 years, but real wages were doing well before the 2016 election: BTW, in nominal terms, average .. MORE
Books: Reviews and Suggested Readings
Rejoinder to Moller on Political Correctness
I still say Dan Moller should rethink his views on political correctness. Here’s my point-by-point reply. Moller in blockquotes, I’m not. My view of political correctness is one of those in-between positions that everyone ends up hating: the left is wrong in ignoring PC run amok, the right is wrong in thinking PC is always .. MORE
International Trade
Who is most vulnerable in a trade war?
In a recent Bloomberg piece, Tyler Cowen argues that “China is probably in the more vulnerable position” in the current trade war with the US. While the overall argument is plausible, there are a few questionable points that are worth discussing: To see why the full picture is more complicated, let’s say the U.S. slaps .. MORE
Regulation
SEC Privilege
Russ Hooper, a young econ major who was one of my best research assistants, wrote me the following, with permission to quote: Impossible Foods makes Impossible Burgers, which are vegan burgers that look, taste, and feel like beef burgers. I’m a huge fan of beef burgers, and yet I prefer these. I’m not alone: they’ve .. MORE