EconLog Archive
Politics and Economics
Social Security and Intransitivity
Bryan’s post on the doubtful empirical usefulness of social intransitivity is probably right. Nonetheless, suppose that on Social Security there are three political viewpoints–Democratic, Republican, and nonpartisan–and three policy options–status quo, private accounts, and fiscal medicine. By fiscal medicine, I mean tax increases and/or reductions in future promised benefits. Presumably, Democrats’ favorite option is the .. MORE
Politics and Economics
Riker and the Mathematician’s Fallacy
The last chapter of William Riker’s classic work, Liberalism Against Populism, contains some of the strangest statements I have read in quite a while. Background: Riker is deeply impressed by the literature on social intransitivity. As Arrow and others showed, sometimes a majority will vote for A rather than B, B rather than C, and .. MORE
Economics of Health Care
Bleg: Terminal Health Care Spending
There are studies that reportedly show that a large share of health care spending comes in the last year of life. For example, this abstract gives a figure of 22 percent of total health care spending. (UPDATE: looking at the study more carefully–I found it here–it says that 22 percent of spending of people 65 .. MORE
Economics of Health Care
Health Care Technocrat
Doctors’ prescriptions for health care tend to conflict with economists’. In this essay, I take on the proposals made in The New Republic by Dr. Arnold S. Relman. In a free market, consumer sovereignty and competition tend to create instability when sellers learn to game the system too well… In a technocratic system, it is .. MORE
Institutional Economics
De Soto Interviewed
Hernando De Soto offers his views in this interview it takes you 549 days to get a license to operate a bakery in Egypt and that is with a lawyer. Without a lawyer, it takes about 650 days. In Honduras, it costs an individual entrepreneur 3.765 dollar and 270 days to legally declare, register, and .. MORE
Behavioral Economics
Coping Classes
Unhappy? My advice is to focus on your work. It helps you forget your woes, and once your life has improved, you’ve got something to show for your time of troubles. A fascinating passage from Robert Lane’s The Loss of Happiness in Market Democracies concurs: What do people do when faced with adversity?… [T]he actual .. MORE
Economics of Health Care
David Cutler and Health Care
A nice profile in the New York Times. To make coverage universal, Cutler advocates a $6,000 credit for poor families (and less, on a sliding scale, for others, tapering off to a small credit for people earning $50,000 and up). The credits would be redeemable as a sort of health-insurance voucher. Significantly, Cutler would extend .. MORE
Labor Market
Sin City and the Bizarre World of Entertainers’ Unions
Sin City opens on April 1. I haven’t been as enthusiastic about a movie trailer since The Return of the King. And it’s got a cool backstory too. Director Robert Rodriguez dropped out of the Directors Guild of America (DGA) because union rules prevented him from naming graphic novelist Frank Miller as co-director. DGA rules .. MORE
Austrian Economics
The Myth of Time Preference
How come interest rates are always positive? Austrian economists have a stock answer: it’s because of time preference. All else equal, we prefer satisfaction sooner rather than later. If we did not have time preference, we would never consume anything, because we would keep delaying consumption. As Mises puts it: We must conceive that a .. MORE
Growth: Consequences
The Hopeful Science
Richard Cooper writes, Development as a global policy objective dates from the 1940s. Relative to expectations then, the world economy performed outstandingly well during the second half of the 20th century. Worldwide growth in average per capita income exceeded two percent a year (historically unprecedented), many poor countries became rich, infant mortality declined, diets improved, .. MORE
Regulation and Subsidies
Motives and Consequences
Hedge Fund Guy writes, Costs of lending are always passed on to the consumer. No one is forced to lend (well, there is the Community Reinvestment Act, but that’s a quid pro quo, and an exception), so lenders will either pass increased costs along, or withdraw from the highest risk market segments. Making it harder .. MORE
Growth: Consequences
Was Herbert Spencer Reincarnated as Julian Simon?
I’ve come across an essay by Herbert Spencer that is eerily reminiscent of the work of the late great Julian Simon. Writing in the late 19th-century, Spencer proposes the following relationship between objective conditions and public opinion: “[T]he more things improve the louder become the exclamations about their badness.” When life was poor, nasty, solitary, .. MORE
Uncategorized
Caplan Now a Co-
Bryan Caplan’s stint as guest blogger is over. His new gig is as co-blogger. Please welcome Bryan to what Steven Kirchner calls–in a hilarious post by the way, you must read it–The Bubble in Economics Blogs.
Business Economics
Movie Economics
Tyler Cowen posts on one of my favorite topics, movie economics. a multiplex will charge the same ($9.50 in my case) for the number one movie and for a flop. Nor is the price more expensive for Saturday night, or during the summer when demand is higher. Can any economic model predict these results? Of .. MORE
Economic Growth
Finance, Risk and Growth
A reader of my piece on math and economics connected me to this 1998 Forbes cover story on Reuven Brenner. Forbes Global: Finance is central to your view of creating wealth. Why is it so important? Brenner: Because finance is what stops persistent mistakes. Competitive financial markets will not provide capital indefinitely to entrepreneurs whose .. MORE
Microeconomics
Solve Tyler’s Puzzle
Tyler Cowen has a number of hypotheses about why all movies cost the same price. As a frequent movie-goer, I’d like to know, but I don’t find any of his answers too convincing. A lot of the problem gets solved today by matching up popular movies with theaters with bigger seating capacity, but I’m still .. MORE
Microeconomics
Get Ready for Rhoads: Test Your Gender Identity
The Larry Summers controversy (see here and here) is probably going to make it even harder to do no-holds-barred research on the fascinating subject of gender identity. But fortunately, academia is probably still too competitive for obscurantism to triumph. Evolutionary biology has stood fast against religious fundamentalism for over a century; I don’t think evolutionary .. MORE
Politics and Economics
Economic Debate
Brad DeLong writes, I am cranky, and annoyed. And I am not asking for very much. All I want is: * No more claims that we know that carving-out Social Security revenues to fund private accounts will have no damaging effect on national saving. It might work. It might not. * No more claims that .. MORE
Institutional Economics
Internet Governance
Alex Simonelis writes, Certain protocols, and the parameters required for their usage, are essential in order to operate on the Internet. A number of bodies have become responsible for those protocol standards and parameters. It can be fairly said that those bodies steer the Internet in a significant sense. This document is a summary of .. MORE
Microeconomics
Howard Hughes and the Economics of Mental Illness
I finally saw The Aviator, and it’s hard not to scream “Scorsese was robbed!” Larry White has already done a great job of analyzing the bread-and-butter economics of the story. What’s fascinating to me, however, is the exploration of Hughes’ eccentricity/mental illness. I am a big fan of psychiatrist Thomas Szasz (pronounced like the statistical .. MORE
Economic Methods
Bleg: looking for SAS help
I recently came across the Medical Expenditure Panel Survey, which seems like a fascinating data set. I would like to do some basic cross-tabs of some of the data. However, I am not a SAS jockey. Moreover, some of the cross-tabs I want to do involve linking two of the data sets (doing a table .. MORE