EconLog Archive
Labor Market
Undercover Boss: A Post-Mortem
Now that I’ve seen the Undercover Boss episode about the Cincinnati mayor, it’s time to analyze. See here for my predictions. The bottom line is that I was on to something. Alex Tabarrok, in a comment on my previous post, gave some of the evidence for it. There is more: 1. I found it interesting .. MORE
Labor Mobility, Immigration, Outsourcing
Finally, An Intellectually Serious Case Against Immigration
In langur troops, a core of related females and their offspring associate for up to a few years with unrelated immigrant males. If the newcomers win, they drive the other males away and systematically kill infants less than six months old. The mothers come into estrus again much sooner than if the infants had survived .. MORE
Finance
Maymin on Financial Regulation
One might think that the ideal regulations would be those that find the right numbers for these portfolios, not too small and not too large–the Goldilocks of risk. Surprisingly enough, it is not possible. It turns out that no algorithm for calculating the required risk capital for given portfolios results in lower systemic risk. This .. MORE
Energy, Environment, Resources
Energy Subsidies
Tim Carney writes, Environmental policy is not driven by tree-hugging activists, earnest liberal bloggers, or ecologically minded citizens. Instead, it flows from the lobbyists and executives of well-connected multinational corporations and built-for-subsidy startups that see profit in the loan guarantees, handouts, mandates, and tax credits Congress creates in the name of saving the planet. This .. MORE
Economics of Education
James Heckman on the Great Stagnation
He writes, Currently, over 40% of all American children are born out of wedlock and more than 12% of all children live in families where the mother has never married. Such families provide fewer financial and parenting resources for child development. It is well documented that the children of lone parent families perform worse in .. MORE
Economic and Political Philosophy
Kids and Happiness: The Sweet and Sour Spot
I’ve heard a wide variety of objections to my forthcoming book on kids. But the thinkers I most respect usually argue that the empirical happiness research is my Achilles heel. After all, they point out, the negative effect of kids on their parents’ subjective well-being is extremely robust. Doesn’t this show that there aren’t any .. MORE
Labor Market
Undercover Boss: Government vs. Private
In which the author makes some predictions. My wife and I have watched about the last 4 episodes of “Undercover Boss” on CBS and are now hooked. All 4 have been private-sector for-profit companies and here’s what I’ve noticed: 1. The vast majority of workers they highlight are hardworking, no-nonsense, productive people and are admirable .. MORE
Labor Market
Do Labor Unions Promote the Middle Class?
In today’s WaPost, political scientists Jacob S. Hacker and Paul Pierson argue that not only are unions good for their members but also that unions promote a strong middle class. Their main argument is that unions are a strong political force that lobbies for pro-middle-class policies. Dealing with that argument, which I think has some .. MORE
Fiscal Policy
The Macro Implications of Monetized Debt
PIMCO’s Bill Gross writes, most of the publically issued $9 trillion of Treasury notes and bonds are now in the hands of foreign sovereigns and the Fed (60%) while private market investors such as bond funds, insurance companies and banks are in the (40%) minority. More striking, however, is the evidence in Chart 2 which .. MORE
Economic History
The Depths of FDR’s Anti-Semitism
A forthright admission from Andre Schiffrin‘s pro-Roosevelt Dr. Seuss & Co. Go To War: …Roosevelt took it upon himself to negotiate privately with the Vichy governor of Morocco, Auguste Nogues, and then with General Giraud. FDR, who spoke fluent French, suggested to both that quotas for Jews in the professions be based on a quota .. MORE
International Trade
Greenspan on the Economy
Yesterday, CNBC’s Squawkbox had Alan Greenspan on for an extensive interview. The difference between the communication skills of Alan Greenspan as economic commentator and the communication skills of Alan Greenspan as Fed Chairman is like the difference between day and night. His book, The Age of Turbulence, is excellent. If I recall correctly (my marked-up .. MORE
Behavioral Economics
The Case Against News
By and large, I think news is a waste of time. If I want to increase my factual knowledge, I read history – or Wikipedia. News, I like to say, is the lie that something important happens every day. Most people think my position is crazy, even for me. I was surprised to learn, then, .. MORE
Cross-country Comparisons
How Overvalued is Italy?
Whenever economists ask, “Where is the gap between official per capita GDP and actual living standards the greatest?,” I don’t pause. My instant answer is always: Italy. Official stats put its GDP per capita around $30,000. But virtually every part of Italy I’ve seen – North and South, Genoa, Naples, Catania, Como, Milan – seemed .. MORE
Growth: Consequences
The Great Substitution
Naturally, Tyler Cowen recommends David Leonhardt’s post, which in turn highlights Michael Greenstone and Adam Loney on the dismal trends in median male earnings. I think that broad aggregates of wages and productivity may not be the most informative way of looking at these trends. Instead, I want to give a perspective based on Robert .. MORE
Economic Methods
The Decline of Economic Theory
When I started my Ph.D. in Princeton, pure economic theory was king. Economists with stellar math skills were high in status and high in demand, even if their knowledge of the real world was… slight. In the following eighteen years, however, something big seems to have changed. Some of this could admittedly be my selection .. MORE
Macroeconomics
Two Basic Macro Questions
1. Does the Fed matter? Vincent and Carmen Reinhart write, First, spending and pricing decisions are assumed to be based on long-term assessments of real income and real rates of return. Second, changes in monetary policy can only change real interest rates temporarily. Ultimately, the forces of productivity and thrift determine them, not changes in .. MORE
Labor Mobility, Immigration, Outsourcing
The Biggest Idea in Development that No One Really Tried
Yesterday the noble Michael Clemens spoke at GMU about his impending JEP piece on migration. To get a feel for what you missed, check out his Youtube tour de force, “The Biggest Idea in Development that No One Really Tried.”
Labor Market
Maladaptation to Higher Productivity
Dani Rodrik writes, In economies that don’t exhibit large inter-sectoral productivity gaps or high and persistent unemployment, labor displacement would not have important implications for economy-wide productivity. In developing economies, on the other hand, the prospect that the displaced workers would end up in even lower-productivity activities (services, informality) cannot be ruled out. Thanks to .. MORE
Cross-country Comparisons
The Future of Egypt: Time to Go On the Record
One good way to guard against hidesight bias is to publicly state your odds in advance. The Iranian Revolution, for example, spurred a wave of cock-eyed optimism around the world. But before long, theocracy and bloody warfare left Iran in ruins. The cheerleaders for the original revolution rarely made mea culpas; most just conveniently forgot .. MORE
Labor Market
Keynesian Politics and the Minimum Wage
Last month, Alex Tabarrok posted an interesting piece on the failure of Keynesian politics. Let’s posit arguendo, he said, that Keynesian economics is correct: during a recession, if the government increases aggregate demand using tax cuts or government spending increases, the economy will recover. The problem, says Alex, and he quotes prominent Keynesian Paul Krugman .. MORE
Economic Growth
Ken Rogoff and Others
As usual, Mark Thoma has interesting links for today. 1. Ken Rogoff writes, Many countries’ tax systems hugely favor debt over equity. The housing boom in the United States might never have reached the proportions that it did if homeowners had been unable to treat interest payments on home loans as a tax deduction. Corporations .. MORE