EconLog Archive
Labor Market
The new “voodoo”
Here is Arnold Kling: John Cochrane writes, Economics is a work in progress. But it is certainly brand-new, made-up-on-the spot economics, designed to buttress policies decided on for other reasons. He is describing the economic analysis that claims that policies to distort labor markets to try to increase wages will increase aggregate demand, so that .. MORE
International Trade
Working Around FDA Regulation
Premium cigar makers, racing to pump out new brands before stricter rules took effect this week, have flooded the market with hundreds of new smokes, some a bit “green,” with rough labels–one exec put his daughters to work cutting out bands–and odd distribution schemes, to get into the marketplace under the wire. This week’s rules .. MORE
Behavioral Economics
Murder Equivalents
Economists are often accused of believing that everything - health, happiness, life itself - can be measured in money. What we actually believe is even odder. We believe that everything can be measured in anything. --David Friedman, Hidden Order Economists’ have long struggled to get non-economists to put a dollar value on human life. We’ve .. MORE
Central Planning
The Case for Low-Income Housing
Any discussion of trailer parks should start with the fact that most forms of low-income housing have been criminalized in nearly every major US city. Beginning in the 1920s, urban policymakers and planners started banning what they deemed as low-quality housing, including boarding houses, residential hotels, and low-quality apartments. This is from Nolan Gray, “Reclaiming .. MORE
Public Choice Theory
The Ugly Ugly FDA’s Cartel Enforcement
E-cigarettes do not contain tobacco. They contain nicotine, a chemical derived from tobacco and other plants. Plain English was never a deterrent, though, to regulators on an empire-expanding mission. The Food and Drug Administration this week rolled out new regulations on e-cigarettes based on a 2009 law giving the agency power over products that “contain .. MORE
Taxation
The Perverse Death/Estate Tax
Paul Krugman recently posted about Donald Trump’s proposal for eliminating the death tax, aka the estate tax. But Paul really only scratched the surface. The death tax has a number of perverse effects, none of which Paul discusses. You might think that I’ve already biased the issue by using the term “death tax,” a term .. MORE
Macroeconomics
Why the monetary policy pessimism?
I’ve recently noticed a lot of pessimism about what monetary policy can accomplish. For instance, if I discuss a higher inflation target, people will say, “what makes you think the Fed could hit a higher inflation target? After all, they have trouble hitting their current inflation target.” This is incorrect for lots of reasons, and .. MORE
Economic Education
Weekend Wanderings
Lynne Kiesling at Knowledge Problem drew my attention to this first in a series at The Economist on influential articles in economics. This one highlights George Akerlof’s famous 1970 paper, “The Market for Lemons.” Akerlof’s latest book, Phishing for Phools, took a much different look at asymmetric imformation. Arnold Kling was not impressed. Besides, Alex .. MORE
Economic and Political Philosophy
Isn’t industrial policy an ideology too?
Those British libertarians who went for Brexit were somehow disappointed by Theresa May easily winning the contest for Tory leadership. It’s quite easy to understand why: in her inaugural speech, she longed for an “industrial strategy” for post-Brexit Britain. See Mark Littlewood here. Of course Mariana Mazzucato, though an advisor to Jeremy Corbyn, has commented .. MORE
Labor Mobility, Immigration, Outsourcing
Common Arguments Against Immigration
New research by Harvard professor George Borjas on the effect of the Mariel Boatlift – a giant shock to Miami’s labor market that increased the size of its population by 7 percent in 42 days – finds large negative wage effects concentrated on Americans with less than a high school degree. To put the scale .. MORE
Liberty
Words have fuzzy meanings–that’s good
Raise your hand if you are a libertarian. Now raise your hand if you think Fidel Castro is a communist. I see exactly the same number of hands in the air. Raise your hand if you are a libertarian. Now raise your hand if you think Gary Johnson is a libertarian. I don’t see the .. MORE
Economic and Political Philosophy
What I Fail to Realize
I’m a fallible human being, so when people say, “Bryan, what you fail to realize is…” I listen closely. Precisely what do I fail to realize? I’d really like to know. Most of the time, though, I’m sadly disappointed. The things I allegedly “fail to realize” tend to be smack dab in the middle of .. MORE
Labor Market
My First Seven Jobs
Various friends on Facebook have been posting about their first 7 jobs, but typically without comment. What I would find more interesting, and I encourage you to give your own, is a list of the jobs along with something about them: whether you liked the job, what you learned, etc. Here are my 7, in .. MORE
Behavioral Economics
Fama versus Thaler
Normally, when I face a choice between watching a 40-minute video and reading the transcript, I do the latter. My main reason is that I can read the transcript in 5 to 7 minutes. For some reason I made an exception with “Are Markets Efficient?” and I’m glad I did. Going through the transcript afterwards, .. MORE
Economic Education
Power corrupts…
I remain troubled by much of the rhetoric in this US election season… The vitriol often seems to exclude economics. Fortunately, our own Scott Sumner has done some analysis. Here’s his take on the economic prospects of a Clinton or Trump presidency. Who’s behind the candidates’ economics? Bloomberg says this unlikely scholar is the man .. MORE
Economic Methods
Johnson Bet
I have bet Daniel Filan $100 at even odds that Gary Johnson will receive less than or equal to 5% of the 2016 U.S. Presidential popular vote. I hope to lose, since I (a) consider Johnson far less bad than either Clinton or Trump, and (b) think a high Johnson share reduces the risk that .. MORE
International Macroeconomics
Why the new old Keynesians are wrong about trade
Ramesh Ponnuru directed me to a Greg Ip article, discussing the strange new fascination with protectionism within the Keynesian community. A few decades ago the “dark underworld” of Keynes’s General Theory had gone out of favor. Economists still accepted “Keynesian” models such as IS-LM, but no longer put much weight on ideas like the paradox .. MORE
Cost-benefit Analysis
The Huemer-Caplan Exchange
Publication of Michael Huemer’s lost works continues. Today, we have the 1992 Huemer-Caplan correspondence on his philosophical system, which concludes with my ultimately successful effort to convert him to anarcho-capitalism.
Cross-country Comparisons
Casey Mulligan Visits Cuba
Last month, while on vacation, I missed an excellent trip report by University of Chicago economist Casey Mulligan. He reports the facts seen through the eyes of a first-rate microeconomist. He understands private property and related incentives and the damage done by restrictions on trade. Mulligan also knows how to look at data carefully. Here .. MORE
Macroeconomics
The Fed is caught in a vise
I often read the business press, which has a lot of articles on Fed policy. One recurrent theme is that the Fed is sort of kowtowing to the markets. Here’s a typical Bloomberg article: It’s the Greenspan put gone wild. Or so the Federal Reserve’s critics would have it. No longer is the Fed just .. MORE
Competition
Is TOMS Different?
Poverty, Inc. is the title of a recent documentary created by the Acton Institute. The documentary aims to raise awareness about problems of foreign aid that undermine lasting economic development in African countries. The issue warrants attention. There are things aid can do, but there are many problems with foreign aid – propping up brutal .. MORE