EconLog Archive
Economic and Political Philosophy
I’m a Liberal
When I figured out my basic political beliefs at ages 17 and 18, I didn’t know the term for them. Katherine George, a left-wing sociology professor at the University of Winnipeg with whom I was arguing, called me a libertarian. That was in the summer of 1968 and it was the first time I had .. MORE
Economic and Political Philosophy
Tuesday Immigration Debate
This Tuesday, Reason is hosting a DC debate on “Should America Open Its Borders?” Cato’s Alex Nowrasteh and I say yes; the Center for Immigration Studies’ Mark Krikorian says no. The Center for Immigration Studies’ masthead reads, “Low-Immigration, Pro-Immigrant.” I’ve dissected this before, but here’s a further thought. Imagine telling your spouse, “I love your .. MORE
Eurozone crisis
Europe vs Uber
Uber is having a hard time in Europe. The San Francisco company has started its operations in quite a few cities now. This fact has raised protest by taxi-drivers (as any other human being, they do not like new competitors). Their remonstrances are likely to find a friendly ear: very often local decision makers can .. MORE
Macroeconomics
Rudebusch on “Housing Demand”
This is another installment in my posts on my visit to the San Francisco Fed on April 9. My talk was in the afternoon, but I always like to see the talks that precede mine so that I can get a feel for the audience–what they know and don’t know, what they’re thinking about, etc. .. MORE
Behavioral Economics
Tourists Welcome
Almost everyone wants to heavily restrict immigration. Foreigners will take our jobs, go on welfare, poison our culture, and vote for socialism. But there’s one kind of foreigner almost every country welcomes: tourists. Sure, locals gripe about their cluelessness and clownishness. But almost no one wants to shoo tourists away. Yes, visas and other regulations .. MORE
Statistical theory and methods
Can a Positive Number Fall by over 100 Percent and Still be Positive?
Answer: No. But it has become increasingly common for people, even otherwise numerate analysts, to write as if it can. Consider a recent instance. In the Spring 2014 issue of Regulation, Sam Batkins and Mitch Boynton discuss a case in which an estimate of a regulatory cost fell from $672 million to $89 million. That’s .. MORE
Macroeconomics
Bad news; industrial production is soaring
TravisV sent me to the following graph of industrial production: That looks like good news. To see why it is bad news, we need to take a brief digression. The recent recession has been rather unusual. RGDP fell sharply between 2008 and 2009, and since bottoming out in mid-2009 has grown at about 2.4% annually, .. MORE
Economic Methods
I’ve Won My TARP Bet
Back in 2008, I noted an obscure TARP provision: SEC. 134. RECOUPMENT. Upon the expiration of the 5-year period beginning upon the date of the enactment of this Act, the Director of the Office of Management and Budget, in consultation with the Director of the Congressional Budget Office, shall submit a report to the Congress .. MORE
Income Distribution
I Agree with Barbara Ehrenreich
On a flight home from Las Vegas last night, I found the April 14 issue of Time magazine. I hadn’t read it in years. On the last page was a feature called “10 Questions.” They were 10 questions to “activist, atheist and best-selling author Barbara Ehrenreich.” Interestingly, they left out any mention, in their adjectives, .. MORE
Economic and Political Philosophy
Larry Summers is persuasive
Tyler Cowen directed me to a long interview of Larry Summers. I have two general impressions after listening to the interview: 1. Larry Summers seems brilliant. 2. I disagree with him on just about everything. That got me wondering why I disagree with someone whose opinions seem sensible. Let’s see if we can find a .. MORE
Behavioral Economics
Try Harder or Do Something Easier?
A friend tells you, “I’m thinking of starting a restaurant. Advise me.” You know that about 60% of new restaurants fail in their first three years – and have no reason to think that your friend would be anything other than average. How should your knowledge affect your advice? You could say, “Open the restaurant .. MORE
Behavioral Economics
Smoking, Social Desirability Bias, and Dark Matter
At the IEA blog, Kristian Niemietz points out that expenditure surveys fail to detect most of the tobacco sales visible in national product accounts. For most goods, the two show broadly the same pattern: with small errors, what people profess to buy grosses up to what is really being sold in the country. But tobacco .. MORE
Cost-benefit Analysis
Civil Disobedience: King versus Huemer
Martin Luther King’s “Letter from a Birmingham Jail” defends an odd position: You may morally break an unjust law IF you make no effort to evade the legal punishment for the unjust law you break. In no sense do I advocate evading or defying the law, as would the rabid segregationist. That would lead to .. MORE
Labor Market
Germany’s mysterious recovery
In the past 10 years Germany as gone from being the “sick man of Europe” to the star of the eurozone. This partly reflects the strong job creation that preceded the recession, perhaps due to the labor market reforms of 2003. However the post-2007 performance is even more amazing. There was almost no increase in .. MORE
Book Club
Ramblings on Piketty
I’ve finally received my copy of Capital in the Twenty-First Century, Thomas Piketty’s magnum opus that has already risen to the status of a cult book for the political left. It is a good rule never to comment on a book you haven’t read cover to cover. I’m not going to stick with this rule, .. MORE
Central Planning
My San Francisco Fed Talk
Last Wednesday I gave a talk at the San Francisco Federal Reserve Bank. The event was the “2014 Conference of Twelfth District Directors.” I was one of three presenters. See here for the other two. The session was on “Bubbles” and my talk was titled “Bubbles, Information, and the Fatal Conceit.” In my talk, I .. MORE
Behavioral Economics
Divorce and Motivated Reasoning in the WaPo
In The Economic Naturalist, Robert Frank remarks: Psychologist Tom Gilovich has suggested that someone who wants to accept a hypothesis tends to ask, “Can I believe it?” In contrast, someone who wants to reject it tends to ask, “Must I believe it?” I immediately thought of Gilovich’s insight while reading Scott Keyes‘ op-ed on divorce .. MORE
Regulation
Longer Pub Hours, Fewer Car Accidents in England and Wales
In recent history, the UK has liberalized its rules concerning the hours that pubs can operate. For example, the Licensing Act of 1988 expanded Sunday hours and no longer required pubs to close for two and a half hours in the afternoon. In 2005, the law in England and Wales was further liberalized such that .. MORE
Labor Market
Robert Reich on the Minimum Wage: How Would He Draw the Demand and Supply Curves?
Donald Boudreaux takes on one of Robert Reich’s recent arguments for the minimum wage. Reich writes: A $15/hour minimum is unlikely to result in higher prices because most businesses directly affected by it are in intense competition for consumers, and will take the raise out of profits rather than raise their prices. But because the .. MORE
Behavioral Economics
Kids and Happiness: The State of the Art
Nelson, Kushlev, and Lyubomirsky‘s “The Pains and Pleasures of Parenting: When, Why, and How Is Parenthood Associated With More or Less Well-Being?” (forthcoming in the Psychological Bulletin) is a great survey of research on parenthood and happiness. Quick version: Contrary to media headlines about parental misery, parenthood is a very mixed bag. The hedonic effects .. MORE
Business Economics
Maximizing Short-Run Profits
I was one of three speakers on a panel at the San Francisco Federal Reserve Bank on Wednesday. The other two speakers were Kevin Lansing of the SF Fed and Atif Mian of Princeton University. The event went well and I’ll have a few posts on it in the next few days. But I want .. MORE