EconLog Archive
Economics of Health Care
Bell Curve in Medical Care
Atul Gawande writes, It used to be assumed that differences among hospitals or doctors in a particular specialty were generally insignificant. If you plotted a graph showing the results of all the centers treating cystic fibrosis–or any other disease, for that matter–people expected that the curve would look something like a shark fin, with most .. MORE
Social Security
Social Security and Indexing
William Sterling writes, Price indexation should save the government trillions of dollars in the long run because of the magic of compound interest. Wage growth has historically outpaced consumer price inflation by about 1.1% per annum. That means that the real value of wage-indexed benefits will be twice as high as price-indexed benefits after 70 .. MORE
Social Security
Prescott, Time Inconsistency, and Social Security
Nobel Laureate Edward Prescott thinks that we need mandatory saving to solve a time inconsistency problem. The reason we need to have mandatory retirement accounts is not because people are irrational, but precisely because they are perfectly rational — they know exactly what they are doing. If, for example, somebody knows that they will be .. MORE
Economics of Education
Teacher, teach thyself economics
Columbia University Teachers College Professor Amy Stuart Wells writes, policymakers should amend state laws to better support the high-achieving charter schools and close the rest. And I hope they will also remember the hard lesson learned from this reform: that free markets in education, like free markets generally, do not serve poor children well. The .. MORE
Economics of Health Care
More on Medicaid
Jeffrey R. Brown and Amy Finkelstein write, At $135 billion annually, long-term care expenditures represent over 8.5 percent of total health expenditures for all ages, or roughly 1.2 percent of GDP… Private insurance reimburses only 4 percent of long-term care expenditures, while about one-third of expenditures are paid for out-of-pocket. …Medicaid is quantitatively important in .. MORE
International Macroeconomics
Phelps on the Dollar
Edmund Phelps, who I once said might have won the Noble Prize had he been Scandinavian, ventures a perspective on the dollar and the trade deficit. This model revolves around the epochal event hanging over the present situation: the explosion over the next few decades of Medicare and Social Security outlays for the baby boom .. MORE
Economics of Health Care
Carnival of the Capitalists
On the blogroll to the left, you will find “Jay Solo: Carnival of the Capitalists,” which is a collection of posts that comes out every Monday. This week’s edition is unusually good. Don’t miss it. One of the links I followed from COTC was Mike Pechar’s report on a change in German drug reiumbursement policy. .. MORE
Social Security
Kinsley on Social Security
Here is the crux of the issue in Kinsley’s argument: if [privatization] contemplates reducing Social Security payments proportionally to the reduction in taxes — and counting on people to make up the difference with their new investments — people will be, and will feel, no richer than they were before and there will be no .. MORE
Economics of Health Care
Or is it Medicaid?
I was not aware of some of these statistics. Medicaid, the nation’s largest health insurance program, is costing the states and the federal government more than $300 billion a year. The growth of the program, which covers the poor and disabled, has outpaced state revenues, and Medicaid is now a larger component of total state .. MORE
Economic Education
Textbook Omissions
After studying leading graduate economics textbooks in micro, macro, and industrial organization, Dan Johansson writes, Among the 19 books, only 2 references are made to entrepreneur, only 5 to institutions, only 8 to property rights, and not a single reference to economic freedom, invention, or tacit knowledge. It is quite obvious that economists have eradicated .. MORE
Social Security
No Entitlements Crisis?
Now that President Bush is proposing to reform Social Security, opponents are arguing that there is no crisis. They might wish to read Laurence Kotlikoff. continuing to ignore the problem will simply let more generations, particularly older ones off the hook, and dump an even bigger problem in our kids’ laps… Delay has a significant .. MORE
Regulation and Subsidies
Survey of Regulation
Robert W. Crandall writes, the deregulatory movement has led to a modest amount of progress in reining in some of these programs in the United States. Unfortunately, much remains to be done in freeing water, spectrum, and land from inefficient government controls. An excerpt does not do justice to this fascinating survey paper. I was .. MORE
Economics of Health Care
Information and Incentives
Paul H. O’Neill writes Today, in many corners of even our most significant federal payment systems, we still pay clinicians and facilities for activity, not for the quality of the job they did for the patient. …The federal government should start the mapmaking by commissioning a detailed, three-month analysis of the nation’s leading hospitals to .. MORE
Information Goods, Intellectual Property
The Long Tail
Chris Anderson writes, What’s really amazing about the Long Tail is the sheer size of it. Combine enough nonhits on the Long Tail and you’ve got a market bigger than the hits. Take books: The average Barnes & Noble carries 130,000 titles. Yet more than half of Amazon’s book sales come from outside its top .. MORE
Tax Reform
Taxes and Market Time
Steven J. Davis and Magnus Henrekson write, Regressions on rich-country samples in the mid 1990s indicate that a unit standard deviation tax rate difference of 12.8 percentage points leads to 122 fewer market work hours per adult per year, a drop of 4.9 percentage points in the employment-population ratio, and a rise in the shadow .. MORE
Economic and Political Philosophy
I Heart Michael Powell
Reason interviews the Chairman of the FCC, who says I’m a big believer in individual entrepreneurship and innovation. I think American capitalism is the finest economic system ever invented. It has crushed— not beaten, crushed—every alternative deployed in the history of the world, and we should be proud of it instead of embarrassed by it. .. MORE
Energy, Environment, Resources
Global Warming
Global warming is the topic this week discussed by Richard Posner and Gary Becker. Posner writes, [The Kyoto Protocol] is either too much or too little. It is too much if, as most scientists believe, global warming will continue to be a gradual process, producing really serious effects…only toward the end of the century. For .. MORE
International Macroeconomics
Dollars and Deficits
About the falling dollar, I literally say “So what?” Taking as given government policy for spending, taxes, and money creation, there is nothing specific that political leaders can contribute to the operation of the foreign exchange markets…Our government has no more business manipulating the value of the dollar than it does manipulating the betting odds .. MORE
Social Security
Adequacy of Personal Savings
In a research paper, John Karl Scholz says that over 80 percent of households are saving at least as much as is optimal. However, much of their result is based on counting Social Security wealth in their analysis. Private net worth significantly exceeds the value of social security only in the top two deciles of .. MORE
Economic and Political Philosophy
Friedman on the Battle of Ideas
Nobel Laureate Milton Friedman writes, Hardly anyone today, from the far Left to the far Right, regards socialism in the traditional sense of government ownership and operation of the means of production as either feasible or desirable. Those who profess socialism today mean by it a welfare state. Over the same period, the actual role .. MORE
Social Security
More on Privatization
Paul Krugman makes a generous concession to privatization supporters. For the record, I don’t think giving financial corporations a huge windfall is the main motive for privatization; it’s mostly an ideological thing. I don’t recall MIT having a course in the economics graduate program on discerning the true motives of one’s opponents. But most of .. MORE