EconLog Archive
Economic Growth
Economic Policy Analysis
Whoever is writing the lead editorials for the Washington Post (I suspect Sebastian Mallaby) on economic policy issues in this year’s election is providing pieces that are highly educational. Today’s editorial is called The Growth Mystery. we don’t know how to repeat the 1990s miracle, and the government’s policy options — a trade deal, tort .. MORE
Regulation and Subsidies
Not a Dime’s Worth of Difference
by Michael Munger Guest Blogger For those who, like Ralph Nader, think that there is no difference between the major party candidates, consider the regulatory process, which largely operates under the media radar, but affects all of us. Interesting in-depth story in the Washington Post today. In the past 3 1/2 years, OSHA, the branch .. MORE
Economic Methods
All’s Fair in Politics
by Michael Munger Guest Blogger Economist Ray Fair’s very simple model on presidential elections has some interesting things to say about the upcoming election. Given the macro-economic and macro-political factors that have mattered in the past, George W. Bush should win between 57% and 58% of the popular vote, according to the model. Any way .. MORE
Labor Mobility, Immigration, Outsourcing
I Wish Tiebout Could See This
by Michael Munger Guest Blogger “Tiebout sorting”, named after Charles Tiebout (1924-1968) is one of the ways that public economists have described the effects of differences in levels of public expenditure and variations in policy in a federal system. The essence of the model is the claim that people will move to find their optimal .. MORE
Price Controls
The Political Economy of Wishful Thinking
by Michael Munger Guest Blogger States have some ridiculous laws on the books, but some of the most interesting, popular, and ridiculous are those on price regulation. At bottom, they come down to this: Wouldn’t it be better if there were no scarcity? Maybe (I’m not convinced), but why stop there? Gravity and friction both .. MORE
Macroeconomics
Privatizing Keynes
by Michael Munger Guest Blogger John Maynard Keynes observed, only partly tongue in cheek, that the solution to unemployment is jobs, any jobs: If the Treasury were to fill old bottles with bank notes, bury them at suitable depths in disused coal mines which are then filled up with town rubbish, and leave them to .. MORE
International Trade
Time to Dump “Dumping”?
by Michael Munger Guest Blogger Dumping, or the practice of a producer in one market selling below cost in another market to drive out competition, has a dubious logical pedigree. But its political history is second to none: a perfect shut-up argument. The idea seems to be that you should always accuse competitors of “dumping.” .. MORE
Cost-benefit Analysis
The Economics of Wage Labor
by Michael Munger Guest Blogger An amazing study was released August 2 by the UCal-Berkeley Labor Center. The conclusion? Wal-mart costs California $86 million a year. The nefarious company does this by cruelly (wait for it) employing 44,000 Californians as workers. Worse, the study points out ominously, Wal-mart actually has plans to hire even more .. MORE
Cross-country Comparisons
Russia’s Hope
by Michael Munger Guest Blogger Things seem to be picking up for Russia, heart of the former Soviet Union and the world’s only third-world superpower. This year, using a purchasing power parity basis, Russian GDP stands at $1.287 trillion, or 11th largest in the world. Their real growth rate in 2003 was 7.3%. The growth .. MORE
Behavioral Economics
Happiness Police
I have an essay on Robert Frank’s use of “happiness research” to justify paternalism. Frank is fond of using thought experiments. I have one. Imagine that you could go back a few hundred years and ask people if they are “very happy,” “fairly happy,” or “not happy.” Suppose that this survey showed that happiness was .. MORE
Economics of Education
Support for Higher Education
Jeff Madrick argues for more aid to higher education. the case for investing in higher education is stronger than ever. We of course all know some people with a great education who earn a lot less than their peers with a lesser one. But the gaps in average income between those with degrees and those .. MORE
Economics of Health Care
Physician Licensing
Physician licensing is one of those issues where economics and ordinary intuition conflict. Most people believe that licensing serves to protect consumers from incompetent doctors. Economists worry that licensing is a form of supply restriction and rent-seeking. EconJournalWatch, a publication recommended by Alex Tabarrok, looks at the economics literature on the topic. many economists view .. MORE
Finance: stocks, options, etc.
Arithmetic and Google’s IPO
Allan Sloan warns investors away from Google’s IPO. A price of $135 a share would give Google a stock market value in the neighborhood of $36 billion…Google’s profit and revenue have been exploding — from $7 million on $86 million of revenue in 2001, its first profitable year, to $191 million on revenue of $2.26 .. MORE
Economics of Health Care
Domestic Policy Issues
I argue that on domestic policy, President Bush should focus on Social Security and health care. Our existing system was designed when reaching the age of 65 meant that your active life was probably over, and you were likely to die within a decade. Going forward, we need a system that can accommodate everything from .. MORE
Economic Education
Two Things
Tim Worstall points to Glenn Whitman’s post about the “two things” that can summarize a profession’s wisdom. For economics, he nominates: One: Incentives matter. Two: There’s no such thing as a free lunch. I don’t think I like this game. Without disagreeing about the importance of incentives and opportunity costs, I would say that economic .. MORE
Cross-country Comparisons
Cuba’s Economy
Michael Munger, who will be guest-blogging here next week, has recently visited Cuba. Our hosts were professors and were also well paid, earning in some cases more than $20 per month. The idea that someone would pay nearly $30 to make 18 overheads, on his own, amazed them. I later found out that many of .. MORE
Tax Reform
Is Kerry Listening?
Russell Roberts writes, The truth is that payroll taxes fund government spending generally. We ought to eliminate the ruse that payroll taxes fund social security, eliminate the payroll tax and roll it into the income tax. Then we could give the middle class a better tax cut than they get now. Roberts is not on .. MORE
International Trade
The Case for Free Trade
Three recent pro-trade articles of interest. First, Peter Gordon refers to some academic surveys in support of the benefits of globalization. Second, the Washington Post argues that the Democrats’ platform is too anti-trade. Finally, Joseph Stiglitz argues that international trade negotiations are too focused on issues that are important to rich countries, which leaves issues .. MORE
Behavioral Economics
Money and Happiness
Robert H. Frank writes, Considerable evidence suggests that if we use an increase in our incomes, as many of us do, simply to buy bigger houses and more expensive cars, then we do not end up any happier than before. But if we use an increase in our incomes to buy more of certain inconspicuous .. MORE
Economics of Health Care
Medicare History
John Lanius points out that in April of 1961, then-private-citizen Ronald Reagan warned, The legislative chips are down. In the next few months Americans will decide whether or not this nation wants socialized medicine . . . first for its older citizens, soon for all its citizens. The pivotal point in the campaign is a .. MORE
Growth: Consequences
Home Building Trends
One way to track the increased affluence in America is to look at the trends in new home construction. This research report from the National Association of Homebuilders is filled with interesting facts. For example, Some of the features that average home buyers want today used to be considered optional and were standard only in .. MORE