EconLog Archive
Macroeconomics
Rational expectations doesn’t require smart people
I recall a movie where a guy asks his buddy if his girlfriend is intelligent. The buddy replies “she’s average.” And the other guy responds “average is dumb.” Most people agree. I don’t know if that’s fair overall (I doubt it), but it’s probably true of economics. And this has led lots of people to .. MORE
Uncategorized
Shall we obey unjust regulations?
“One has a moral responsibility to disobey unjust laws,” so goes the old, venerable quote by Martin Luther King. But what about unjust regulations? Typically businesses play by the rules. Some of them play with the rules, by engaging in the political process. At least in Europe, Uber is following a different strategy. I’ve blogged .. MORE
Behavioral Economics
Myth of the Rational Voter: The Animated Series, Part 2
The second video in my Learn Liberty series is now up. Rejoice in the folly of pessimistic bias! Yes, Louis C.K. said it better, but humans learn by varied repetition.
Economic Growth
Quotes From a Colloquium
A few weekends ago, I attended a colloquium in San Diego at which we discussed readings in economic institutions and economic growth. We discussed a lot of chapters from Daren Acemoglu and James A. Robinson, Why Nations Fail, which I reviewed here, plus other readings, including a chapter from Gregory Clark’s A Farewell to Alms. .. MORE
Macroeconomics
Never debate the impact of a price change
There as been a lot of recent discussion about the “Neo-Fisherite” claim that higher interest rates lead to higher inflation. Noah Smith has a good summary. Unfortunately the debate has been marred by a lack of precision. What is being held constant when we talk about higher interest rates, and what is allowed to change? .. MORE
Cost-benefit Analysis
The Cartoon Introduction to Climate Change
Stand-Up Economist Yoram Bauman is back with another non-fiction graphic novel, The Cartoon Introduction to Climate Change. As with his previous Cartoon Introductions to Economics (micro and macro), there is much to like. Bauman thoughtfully interweaves physical science and economics. I particularly liked his chapter on scientific uncertainty, and he provides good quick explanations of .. MORE
International Trade
Thoughts on Krikorian
In his recent debate on immigration with my co-blogger Bryan Caplan with my friend Alex Nowrasteh, Mark Krikorian makes two interesting points. The first is that the term “open borders” is not an accurate description of what many of us advocates of open immigration believe in. He does this well at approximately the 12:00 to .. MORE
Behavioral Economics
Exploring Elitist Democracy: The Latest from Gilens and Page
In light of the attention my Gilens posts are getting, now’s a perfect time to examine his latest research on who actually runs America. Co-authored with Benjamin Page, “Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens,” (Perspectives on Politics, forthcoming) weighs the relative importance of four models of ultimate power: While this .. MORE
Labor Mobility, Immigration, Outsourcing
The paradoxes of applying nationalism to immigration
Consider two policy options: A. The US admits 1 million immigrants per year between now and 2050. B. The US admits 3 million immigrants per year between now and 2050. Suppose we only cared about the welfare of Americans. Would Americans be better off in 2050 under policy regime A or policy regime B? Surprisingly, .. MORE
Economics of Health Care
Healthcare… The return of the Singapore model
Last week, in one of his Undercover economist columns, Tim Harford asked If the US healthcare system is financially incontinent and the UK system is reliant on a centralised and philosophically troubling cost-benefit analysis, is there some other better way? He answered in the affirmative, pointing to Singapore. The aim of the country’s healthcare system .. MORE
International Trade
Trade Creates Peace
“Germany Vexed by Ties to Russia.” So reads the headline of a front-page article in the Saturday/Sunday Wall Street Journal by Anton Troianovski. Mr. Troianovski goes on to point out the tension between German Chancellor Angela Merkel’s desire to be pro-U.S. government in its stand against Russia and her desire to not mess up trade .. MORE
Behavioral Economics
Me, Gilens, and Salon
Last year I wrote a series of posts (here, here, and here) arguing that Martin Gilens‘ evidence on the disproportionate influence of the rich on U.S. public policy is very good news indeed. Long story short: I find Gilens’ results not only intellectually satisfying, but hopeful. If his results hold up, we know another important .. MORE
Economic Growth
“Hollowing Out”: A Global Perspective
Stagnationists often complain about the “hollowing out” of the economy: Well-paid middle-income jobs are disappearing. Normally, they only look at the United States and other developed countries. As a cosmopolitan, however, I’d rather discover what’s been happening to incomes at the global level. Branko Milanovic’s “Global Income Inequality by the Numbers: in History and Now” .. MORE
Economic and Political Philosophy
Friday Night Video: Henderson on RT
Last week I recorded an interview with Erin Ade of RTTV’s “Boom and Bust.” She put me through the paces, and showed that she had obviously read, or at least scanned, some of my writing, which is better than some other interviewers do. It starts at about 3:40 and ends at about 12:30.
Labor Market
Mitt Romney’s True Colors
“I … part company with many of the conservatives of my party on the issue of the minimum wage,” he said in an interview on MSNBC’s “Morning Joe.” “I think we ought to raise it because, frankly, our party is all about more jobs and better pay, and I think communicating that is important to .. MORE
Behavioral Economics
Myth of the Rational Voter: The Animated Series
Learn Liberty is doing a four-video series on The Myth of the Rational Voter‘s four big economic biases. Production values are very high, and the animators used so many of my visual ideas that I can now justifiably re-classify my years of graphic novel reading from pure consumption to human capital acquisition. The first video .. MORE
Cost-benefit Analysis
Great Moments in Federal Government Retirement
On Tuesday, I spent all day at a retirement planning seminar with more than 100 other federal government workers. Talking to a few of my colleagues around my same age (63), I jokingly referred to it as an AARP event. The instructor was Janet Fox, someone who has obviously presented a lot of these. She .. MORE
Obituaries
My Hoover Obit on Gary Stanley Becker
Here’s a long excerpt: One major problem that Becker addressed in his column was the drug war. He did not shrink from advocating a free market in illegal drugs, a good that he, I’m confident, did not buy. He saw the drug war as a tremendous waste. Indeed, his second to last entry on the .. MORE
Economic and Political Philosophy
Meant for Each Other: Open Borders and Western Civilization
Last night I debated Stephen Balch of Texas Tech’s Institute for the Study of Western Civilization. Here’s my opening statement. Meant for Each Other: Open Borders and Western Civilization The Institute for the Study of Western Civilization has a powerful statement on its webpage: “Western civilization has remade the world. Most of the West’s inhabitants .. MORE
Economic Growth
The Great Grandson Also Rises
Our former co-blogger, Arnold Kling, has an excellent review on Econlib of Gregory Clark’s latest book, The Son Also Rises. The review is titled “The Heritability of Social Status.” You may have noticed that Clark, an economist historian at UC Davis, likes to come up with titles that sound almost like those of Ernest Hemingway. .. MORE
Labor Market
When ideologies change
Over the past 5 years I’ve done a number of posts discussing a strange phenomenon. My views on money/macro are in many respects quite close to the consensus view of 2007: 1. Fiscal stimulus is ineffective. 2. Monetary stimulus can be highly effective at the zero bound. 3. Low interest rates and a fast rising .. MORE