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Business Economics

Ray Kurzweil on How AI Will Transform Energy, Manufacturing, and Medicine

By David Henderson | Jun 27, 2024

  He’s probably wrong on medicine. Ray Kurzweil writes: After working in the field [of AI] for 61 years—longer than anyone else alive—I am gratified to see ai at the heart of global conversation. Yet most commentary misses how large language models like Chatgpt and Gemini fit into an even larger story. ai is about .. MORE

Regulation and Subsidies

Focus on What We Say, Not What We Do

By Scott Sumner | Jun 26, 2024

For years, the advanced economies have been lecturing poorer countries as to what they should do to develop their economies. Often called the “Washington Consensus”, we’ve been telling developing countries that they are poor because they engage in too many industrial policies such as high tariffs and subsidies. They need to liberalize, to move in .. MORE

Cross-country Comparisons

Dictatorship Doesn’t Promote Prosperity

By Pierre Lemieux | Jun 25, 2024

It is a relatively uncontroversial result, confirmed by a number of econometric studies, that economic freedom has a positive effect on incomes (GDP per capita). An econometric study to appear in the European Journal of Political Economy, “Revisiting the Relationship Between Economic Freedom and Development to Account for Statistical Deception by Autocratic Regimes,” argues that .. MORE

Labor Market

Barriers to Entry as Baseball Bats

By John Phelan | Jun 25, 2024

Government is largely the art of whacking your knees with a baseball bat, handing you a Band Aid, and asking you to remember the Band Aid next polling day. Minnesota – a reliable source – provides an example.  In March, Minneapolis City Council issued an ordinance establishing minimum pay rates for rideshare drivers.  Lyft announced .. MORE

Politics and Economics

The Internal Contradictions of Nationalism

By Scott Sumner | Jun 23, 2024

Here are two different versions of American nationalism: Version 1: High tech is evil, part of the woke conspiracy to radicalize America. We need to go back to muscular old industries like coal and steel and autos, which employ lots of blue color workers. We need to revive the Rust Belt. EVs are a fad. .. MORE

Books: Reviews and Suggested Readings

My Weekly Reading for June 23, 2024

By David Henderson | Jun 23, 2024

The Deadly Tobacco Drug War Down Under by Jacob Grier, Reason, June 17, 2024. Excerpt: Since March of last year, the Australian state of Victoria has been rocked by a series of arsons and firebombings. Some of the targets are victims of extortion; others are caught in an escalating turf war between rival gangs. Two .. MORE

Cross-country Comparisons

Does a Price Decrease Fuel Deflation?

By Pierre Lemieux | Jun 23, 2024

Nearly everybody seems to think so, including many economists: when a price rises, it fuels inflation. The venerable magazine The Economist doesn’t think twice about it. Speaking of Argentina, it writes (“Javier Milei’s Next Move Could Make His Presidency—or Break It,” June 19, 2024): Monthly inflation may creep up in June as energy prices rise. .. MORE

Macroeconomics

Ask a stupid question . . .

By Scott Sumner | Jun 21, 2024

. . . get a stupid answer. A recent article on inflation beautifully illustrates the truth of this old maxim. Before getting to the article, let’s review another maxim, this one not at all old: Never reason from a price change. Thus, for instance, it would make no sense to ask people about the “welfare .. MORE

Labor Market

Consumer Adjustments to Minimum Wage

By Kevin Corcoran | Jun 21, 2024

When minimum wages are increased, one consequence we might see follow is reduced employment. I say might see, rather than will definitely see, because employers can adjust on multiple margins. Instead of reducing employment, they may reduce hours, benefits, perks, or just put less effort into providing a pleasant working environment. But consumers can adjust .. MORE

Books: Reviews and Suggested Readings

Henderson Review of Build, Baby, Build

By David Henderson | Jun 20, 2024

  Often when I advocate abolishing a particular regulation, I’m accused of thinking that my proposal is a panacea. Usually, that’s false: I point out that it would move things in the right direction but that it’s not close to being a panacea. I’m guessing that for most policies he advocates, Bryan Caplan has the .. MORE

Cross-country Comparisons

The French, the Americans, and the Plague of Politics

By Pierre Lemieux | Jun 20, 2024

The upcoming legislative election in France (on June 30 and, for the second round, July 7) tells us much about politics. It also suggests some comparisons between American and French politics. The parties of the left vying for a majority in the National Assembly have built a populist coalition, the New Popular Front (Nouveau Front .. MORE

Cross-country Comparisons

The wisdom of Janan Ganesh

By Scott Sumner | Jun 19, 2024

Janan Ganesh is probably my favorite news commentator.  In a recent column, he pushes back at the widespread belief that the global rise of the hard right is a reaction to neoliberalism: Rightwing populism is ascendant in France, which might be the least economically liberal country in the rich world. Government spending there accounts for .. MORE

Finance

The Problem With AI Is the Word “Intelligence”

By Pierre Lemieux | Jun 19, 2024

As a Financial Times headline says, “AI in Finance Is Like ‘Moving from Typewriters to Word Processors’” (June 16, 2024). But, I think, not much further, despite all the excitement (see “Ray Kurzweil on How AI Will Transform the Physical World,” The Economist, June 17, 2024). At least, doubts are warranted regarding the “generative” form .. MORE

Business Economics

Should Advising Clients on How to Find Customers for a Legal Good Be a Crime?

By David Henderson | Jun 18, 2024

  The Wall Street Journal reported in April that the Justice Department would conduct a “criminal investigation into consulting firm McKinsey related to its past role in advising some of the nation’s largest opioid manufacturers on how to boost sales.” According to the WSJ report, “McKinsey consultants advised the company [Purdue] on how to increase sales .. MORE

Books: Reviews and Suggested Readings

Rights and the Principle of Charity

By Kevin Corcoran | Jun 18, 2024

In his book Word and Object, W. V. Quine describes the problems that arise when one is attempting to translate an entirely unfamiliar language. Among the ideas he raises in his discussion is that when attempting to translate what someone is saying, one should employ the principle of charity, by which Quine meant we should .. MORE

International Trade

Reasoning from a Price Change: Trade Edition

By Jon Murphy | Jun 18, 2024

An important statistic in international trade economics is the “terms of Trade.”  The terms of trade is the ratio between export prices and import prices.  In other words, the terms of trade is a relative price telling us how many imports we can buy per dollar of exports.  A country’s terms of trade improves (gets .. MORE

Macroeconomics

Nominal GDP as an Indicator

By Scott Sumner | Jun 17, 2024

Many of my contrarian opinions derive from my focus on a single macroeconomic variable—NGDP. Consider the recent period of high inflation. Almost all economists believe the inflation was caused by a mix of supply and demand side shocks. In contrast, I believe the high inflation was all demand-side, with supply shocks playing no role at .. MORE

Books: Reviews and Suggested Readings

Bonus Weekly Reading for June 16, 2024

By David Henderson | Jun 16, 2024

Two more articles, one I read late in the week and one I read this morning, are too good to pass up. The Dark Side of Alexander Hamilton by Jeffrey Rogers Hummel, Reason, July 2024. This is Jeff Hummel’s review of William Hogeland, The Hamilton Scheme: An Epic Tale of Money and Power in the .. MORE

Political Economy

The Possibility of Despotism in America

By Pierre Lemieux | Jun 16, 2024

Economics is interested in despotism and tyranny if only because the profile of government interventions depends, at least partly, on the nature of the political regime. Moreover, the recent school of constitutional political economy analyzes alternative constitutional arrangements. Economists have analytical tools to study the consequences of government intervention or non-intervention. It is thus not .. MORE

Books: Reviews and Suggested Readings

My Weekly Reading for June 16, 2024

By David Henderson | Jun 16, 2024

Some highlights of my weekly reading. Most Palestinians Don’t Want Hamas Rule, Poll Shows by Matthew Petti, Reason, June 13, 2024. Excerpt: The Palestinian Center for Policy and Survey Research (PCPSR) released its latest poll data from the West Bank and Gaza on Wednesday. It turns out that Palestinians are unhappy with all of the current options—including .. MORE

Information Goods, Intellectual Property

When China Innovates

By Scott Sumner | Jun 15, 2024

Western countries frequently complain that Chinese firms do not innovate, rather they copy western ideas and technology.  So how does the West respond when Chinese firms actually do innovate? Nicholas Welch and Kevin Zhang have an interesting article on the US response to innovation in the Chinese electric vehicle industry: Since Chinese EV manufacturers “poach” .. MORE