EconLog Archive
Behavioral Economics
Neurotic Politics
Neuroticism – the tendency to experience negative emotions like anger, fear, and sadness – is a pillar of the Five Factor Model of personality. Human beings routinely attribute their emotions to external circumstances. For proximate causes, they’re often right. The underlying reality, though, is that some people – the highly neurotic – naturally focus on .. MORE
Behavioral Economics
Metzger on Headline Dismay Minimization
Interesting reaction to Tuesday’s post from my friend Perry Metzger. Perry, with his permission: My biggie is the number of people who die from medical errors and bad hygiene in hospitals. It’s thousands a day globally. Unlike the global murder problem, this one is probably quite straightforwardly fixed by improving process. My #2 is the .. MORE
Economic Education
#TWET…Slavery & Racism
Incentives matter, sure. But isn’t there a limit to what institutional analysis can (and ought) explain? That’s what lingering in my mind after listening to this week’s EconTalk episode with everybody’s favorite guest, Mike Munger of Duke University. How and why did the attitudes of white Southerners change over time in the pre-Civil War era? .. MORE
Economic Education
The Fall 2016 Public Choice Center Seminar Series
This academic year, I’m in charge of the Public Choice Center Seminar series. Seminars are normally on Wednesdays from 12:00-1:15 PM, and are open to the public. Since I am not a fan of actually-existing seminars, I’m experimenting with a new format, which I will strictly enforce: 1. Split the talk into two parts. Part .. MORE
Economics of Health Care
The Twenty-Niners
“We’re Hiring Economics Writers,” says the headline of a post at the web site FiveThirtyEight. Good for them. Then they write: This is a part-time staff position (up to 29 hours per week) and does not offer benefits. Any idea why they chose 29 hours? Answer: Obamacare. Here’s how a video at Prager University puts .. MORE
Macroeconomics
Tyler Cowen on NGDP targeting
Here’s Tyler Cowen: The thing is this: whether rationally or not, the American public hates higher rates of price inflation. Perhaps they mis-sample or mis-estimate prices, or perhaps the higher prices really do erode their real wages in a way they can’t get back through a new labor market bargain. So a higher price inflation .. MORE
Austrian Economics
Equilibrium and Foresight
A recent piece by Raphaële Chappe discusses the uses and limitations of general equilibrium theorizing. The post is a long-read, but Chappe briefly summarizes the point when she writes: …the theory lacks explanatory relevance, providing instead a language through which one can say both too much and too little. The theory’s abundance of riches within .. MORE
Behavioral Economics
Headline Dismay Minimization
Evaluate this simple cynical theory of what almost every politically aware person really wants: Minimizing the negative emotions they personally experience when they read/see/hear top news stories. In other words, the politically aware strongly care about even objectively minor problems that get a lot of coverage, but barely care about even objectively major problems that .. MORE
Behavioral Economics
An ITT I Cannot Pass
I pride myself on my ability to fairly and accurately explain views with which I disagree. I’ve tried to enshrine this skill in what I call the Ideological Turing Test – the ability of non-believers to mimic believers in a blind trial. But when I read these passages in Noah Smith’s recent column, I realized .. MORE
Economic and Political Philosophy
Huemer’s “Relativism and Tyranny”
The latest installment in my lost works of Michael Huemer series is his 1992 essay, “Relativism and Tyranny.” The paper begins with an infamous quote from 1984, then distinguishes nine theses moral relativists (whether self-conscious or by default) routinely equivocate between. The following are versions of relativism: (1) Moral values generally are established by social .. MORE
Labor Market
Do Steps Toward Freedom Create Net Benefits?
Noah Smith recently wrote a piece titled “Being an Ideologue Means Never Having to Say You’re Wrong.” It starts out well. He writes: “Communism would have worked, if the Soviet Union had only tried it for real.” I must have heard this argument a dozen times from die-hard leftist friends. Marxist economists such as Richard .. MORE
Macroeconomics
Disputes don’t get resolved, they get swept under the rug
This post will be about macro theory, but let’s begin with a related example. You are a libertarian and your best friend is also a libertarian. You tend to see eye to eye on most issues, favoring small government. Then some new issues arise, and your views don’t quite align. Maybe Muslim terrorists, illegal Mexican .. MORE
Economic Education
Rio Reality Check
My family has been enjoying watching the Olympics over the past couple of weeks. The spectacle of sport can be inspirational. (And with a young swimmer in the house, we are ALL about Katie Ledecky and Michael Phelps.) If you missed the recent EconTalk episode with Matthew Futterman, check out the excellent discussion of the .. MORE
Social Security
Social Security Reformer
The Committee for a Responsible Federal Budget has come up with a very clever tool. It’s called “The Reformer: An Interactive Tool to Fix Social Security.” Notice that it’s to fix Social Security, not what I would like to see, which is abolition. But still, it’s very clever and, assuming the underlying model is done .. MORE
Uncategorized
The intellectual as a celebrity
The Financial Times has published a collective interview on “how to detox digitally in the sun“: that is, a set of conversations with famous people on tips to make the most out of your holidays. This is, typically, material for tabloid newspapers but, the FT being the FT, instead of seeking the opinion of movie .. MORE
Economic Methods
The Immigration/Labor Demand Elasticity Puzzle
While labor demand elasticity is pretty clearly negative, virtually all estimates have an absolute value less than 2. Yet estimated effects of immigration on native wages are tiny. Kerr and Kerr’s summary is typical. The documented wage elasticities are small and clustered near zero. Dustmann et al. (2008) likewise found very little evidence for wage .. MORE
International Trade
Lester versus DiMicco on NAFTA
Simon Lester, at Cato at Liberty, has a telling Twitter discussion with Dan DiMicco of Nucor Steel. DiMicco is an adviser to president candidate Donald Trump. According to Time: He [DiMicco] has been an avid supporter of Trump’s trade proposals, recently writing, “The Trump trade policy is both sound and necessary in today’s World where .. MORE
Macroeconomics
Saving is not a problem
I recently came across a WSJ article that is a gold mine of teachable moments for EC101 students: KORSCHENBROICH, Germany–Two years ago, the European Central Bank cut interest rates below zero to encourage people such as Heike Hofmann, who sells fruits and vegetables in this small city, to spend more. Policy makers in Europe and .. MORE
Cost-benefit Analysis
Labor Demand Elasticity: Boredom is Thoughtless
When workers are cheaper, employers want more. But how many more? Does a 1% fall in the price of labor entice .1% higher employment? .5% more? 1% more? In technical terms, what is labor’s elasticity of demand? So much hinges on this seemingly boring question – everything from “How pro-worker is ‘pro-worker’ legislation?” to “Does .. MORE
Books: Reviews and Suggested Readings
#TWET…But What If We’re Wrong?
Why are we so convinced the things we think are true today will still be true for future generations? I mean, everybody knows The Beatles are the greatest rock group of all time, right? (And while pyroseed13 argues in the Comments that once the Baby Boomers are gone, no one will talk about the Beatles, .. MORE
Cost-benefit Analysis
Open Borders Philanthropy Bleg
Question from a reader. Any fruitful ideas? Dear Prof. Caplan, I’ve long been intuitively in favor of open borders, but it is only recently that I have spent a bit of time reading the literature both for and against this case. Perhaps unsurprisingly, I’ve found a couple of your papers particularly persuasive both morally and .. MORE