EconLog Archive
Revealed Preference
Ezra Klein: Pass Laws, Be Productive
Ezra Klein claims that the current Congress is “one of the very worst congresses we have ever had” and then claims to “prove it.” He gives 14 reasons. Reason #1 is “They’re not passing laws.” What’s his implicit assumption? That passing laws is good. But doesn’t that depend on whether the laws are good? Apparently .. MORE
Behavioral Economics
David Brooks Repeats Himself
I thought that Why Our Elites Stink (I suspect Brooks winces at the headline the editors supplied) these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness of their larger social role. was simply a precis of Bobos in Paradise. So I .. MORE
Behavioral Economics
Sumner’s Common Sense
In a post that officially attacks “common sense,” Scott Sumner shows that he possesses a great deal of it. Don’t believe that nominal wage rigidity can explain continuing high unemployment? [W]age stickiness is a much bigger problem when inflation is low, not high. In 1982 all employers had to do to restore labor market equilibrium .. MORE
Economics of Education
Arnold on the Current State of Computers in Education
Arnold writes: Here is how I size up the current state of computers in education: My reactions, point by point: 1. Note that in the music industry, the Internet has put record stores out of business. It has not put composers and musicians out of business. Point taken. But one of the main benefits of .. MORE
Growth: Consequences
From the Vault: My First Debate in Print with Paul Krugman
In January 1997, Red Herring magazine, now defunct, published a debate between Paul Krugman and me. It was titled “Does Technology Create Jobs?” Here’s one of his key paragraphs: It’s also true that higher profits generated by the new technology will lead to more investment, and this may eventually mean higher wages. But the operative .. MORE
Information Goods, Intellectual Property
I’m Telling
Alex Tabarrok suggests that sexual harassment is analogous to employee theft. If this were so, however, victims of harassment would have an ridiculously easy remedy for their woes: Tell the boss. When an employee tattles on a co-worker for stealing, the boss is normally happy for the information, and eager to retaliate against the thief. .. MORE
Political Economy
If I Were on the Left
I do not think that I would find Arthur Brooks persuasive. He writes, Free markets and entrepreneurship are driven not by greed but by earned success. He gives examples. I would give counter-examples. I would say that regulation is needed in order to ensure that success is properly earned rather than the result of selling .. MORE
Economics of Education
Computers, Education, and Comparative Advantage
Bryan writes, At risk of sounding extremely narcissistic, the key question for Tyler and me is whether online education is going to put the two of us out of a job. Our definitional conflict notwithstanding, the two of us both answer this key question with a resounding “no.” For the sake of the world, I .. MORE
Cost-benefit Analysis
What Would Efficient Sexual Harassment Law Look Like?
In a post I otherwise applaud, Alex Tabarrok presents an efficiency defense of sexual harassment law: What the theory and the empirical results are saying is that people exposed to a higher risk of sexual harassment are paid more, just as people exposed to a higher risk of death are paid more. In the case of risk, .. MORE
Economic History
A Short History of Gasoline Price Controls
In the Weekend Interview in today’s Wall Street Journal (WSJ editor Rob Pollock interviews George Shultz), Shultz says the following: And one thing you know from experience is when you control the price of something, you end up getting less of it. So if you control the price of health-care providers, you will have fewer .. MORE
Political Economy
Moral Authority, Continued
Note Chris Dillow’s cynical take: Crony capitalism, then, is the only feasible form of capitalism. Matt Mitchell writes, My colleague Adam Thierer has assembled an interesting compendium of expert opinions on regulatory capture. The quotes show experts interested in grappling with incentives, not lecturing on the basis of moral authority. It is telling how many .. MORE
Economics of Education
Online Education: The Rationale for the Revolutionary Definition
My recent post on online education specifies: When I talk about “online education,” I don’t just mean students at existing brick-and-mortar colleges taking some classes from their dorm rooms. I mean students enrolling in virtual colleges instead of physical colleges. Tyler objects: I would say he is defining away the most likely model, namely a .. MORE
Labor Market
Stossel on Jobs
While watching the last 15 minutes or so of the latest Stossel program on Fox Business last night, I became aware that I had a smile on my face and was feeling positive and optimistic. Why? Because during those minutes, he interviewed a number of his Fox colleagues and a few others about their early .. MORE
Economics of Education
Flat-of-the-curve in Education?
Michael Graham writes, Education reform activist Bill Costello points out that our annual “per-pupil spending in 2006 was 41 percent higher than the OECD average of $7,283, and yet American students still placed in the bottom quarter in math and in the bottom third in science among OECD countries.” This strikes me as similar to .. MORE
Behavioral Economics
A Thought to Ponder
from Timothy Taylor. Behind Hornbeck’s estimates seems to me a deeper pattern of human behavior. When confronted with difficulties, leaving to try somewhere else is hard, but do-able. Staying and continuing with the same behavior is unpleasant, but do-able. But staying and dramatically altering one’s behavior seems somehow hardest of all. When Nick Schulz suggested .. MORE
Energy, Environment, Resources
Robert Murphy on Global Warming
Robert Murphy has a first-rate piece on global warming in which he covers some important new ground. First, here’s ground he and I (in a post on his earlier article) have already covered but he says it particularly well: Yet if we consult Tol’s paper–the very one cited by Nordhaus in support of the above .. MORE
Uncategorized
My Grad School Entering Class
Prompted by Tyler’s reminiscences We entered MIT in 1976, which means we hit the job market during a recession (1980). For that reason, and others, we were underachievers by MIT standards. (Just preceding us were Krugman, Bernanke, and Rogoff, and just after us was Paul Romer). “Most likely to succeed” based on classroom performance were .. MORE
Finance: stocks, options, etc.
Local Knowledge and Mortgage Lending
Kristle Romero Cortes writes (abstract) This paper shows that mortgage lenders with a physical branch near the property being financed have better information about home-price fundamentals than non-local lenders. During the real estate run-up from 2002-06, home price growth negatively correlates with the share of loans made by local lenders, namely lenders with a branch .. MORE
Economic Methods
A Controversial Issue Resolved With Econometrics
In answer to David’s challenge to name “one controversial issue that had been resolved with econometrics,” I nominate the self-interested voter hypothesis – the idea that voters maximize their narrow self-interest. While many people – scholars included – take this view for granted, the vast majority of people familiar with the data now agree that .. MORE
Economic Methods
Does Econometrics Resolve Issues?
Bryan Caplan’s statement, “In social science, the best arguments prove more than the best studies,” reminds me of a conversation I was in earlier this week. Economist Jeff Hummel said he couldn’t think of even one controversial issue that had been resolved with econometrics. The other 4 economists present, including me, immediately started trying to .. MORE
Human Capital
Part-Time Jobs and Climbing Trees
In a comment on my post on Walter Williams’s book, “liberty” writes: It seems to me that sometimes when free market individualists swoon over the benefits of gaining a work ethic, including having many jobs when young and learning from each low paid low-skill job until one can become a wealthy, “success” in later life, .. MORE