EconLog Archive
Economic Growth
Anglosphere Challenge
I’ve started reading The Anglosphere Challenge by James C. Bennett. I’m only up to Chapter One, but already it is very stimulating. For example: In popular misconceptions, it is imagined that in America and the other advanced countries people will sit and peck at computers, while manufacturing will be done somewhere in the Second or .. MORE
Economics of Education
Education Loans
When I taught “Economics for the Citizen” this past fall at George Mason, I included a unit on education. In the latest issue of the Becker-Posner blog, Richard Posner brings up a point that I wrestled with in class. But the “externalities” argument for subsidizing college education depends not only on how many kids would .. MORE
Social Security
Social Security Ad Nauseum
I have an essay that looks at recent writing by Brad DeLong and Paul Krugman. To economists, raising the retirement age is the obvious fix for a system that otherwise faces an ever-declining ratio of workers to retirees. Unfortunately, it appears to have never stood a chance politically. For that reason, DeLong proposes creating an .. MORE
Social Security
Feldstein on Social Insurance
I recommend David Warsh’s coverage of this year’s American Economics Association meetings, which just concluded. Among other things, he mentions Martin Feldstein’s Presidential Address, Rethinking Social Insurance. Feldstein writes, The impetus for broader social insurance reform comes from the recognition that existing programs have substantial undesirable effects on incentives and therefore on economic performance. Unemployment .. MORE
Business Economics
Pseudo-currency
The Glittering Eye points to this story on frequent flyer miles. By the end of 2004, almost 14 trillion frequent flyer miles had been accumulated worldwide, worth between 1p and 6p apiece. According to a new analysis by The Economist magazine, the global stock is worth more than $700bn (£370bn), more than all the US .. MORE
Austrian Economics
Comments on Hayek
An interesting collection of comments on the influence of Friedrich Hayek, from the latest issue of Reason. For example, cognitive psychologist Steven Pinker writes, Hayek was among the first to call attention to the emergence of large-scale order from individual choices. The phenomenon is ubiquitous, and not just in economic markets: What makes everyone suddenly .. MORE
Social Security
Social Security Wage vs. Price Indexing
The Democratic National Committee accused the Bush Administration of trying to cut Social Security benefits by shifting to price indexing from wage indexing. I suggest that the administration should plead guilty. Future benefits that are promised under the current system are higher than what can be covered by taxes under current law. That means that .. MORE
Economics of Education
Read What Arnold Says
On C-span last night, I happened to hear part of the State of California Speech. In addition to a recognizable name, the Governor of California has interesting ideas. We must financially reward good teachers and expel those who are not. The more we reward excellent teachers, the more our teachers will be excellent. The more .. MORE
Social Security
Bartlett and Krugman
National Review‘s Bruce Bartlett and New York Times columnist Paul Krugman appear to be singing from the same song sheet on Social Security. Bartlett writes, It is not clear what is driving the urgency of Social Security reform. It is desirable, to be sure, but nothing will happen to anyone’s benefit for some time to .. MORE
Regulation and Subsidies
Fannie Mae, Freddie Mac
Robert J. Samuelson writes, Well, homeownership isn’t a big problem, and Fannie and Freddie have been minor — not major — forces in past increases. The others include rising incomes, falling interest rates, low-down-payment mortgages (as little as 3 percent) from the Federal Housing Administration, the tax deductibility of mortgage interest payments and government programs .. MORE
Uncategorized
Civility Plea, Revisited
Over a year ago, I wrote, I’ve always felt that the stronger the case for the idea, the less need to attack the person. The goal of the comment area is to encourage a wide range of viewpoints, expressed reasonably. A good comment offers a high ratio of substance to rhetoric. Personal attacks on other .. MORE
Economic Methods
Unprovable Speculations
John Brockman asked dozens of scientists and other intellectuals to state a proposition you believe is true, even though you cannot prove it. Not many of the answers deal with economics, and those that do strike me as hostile without being informative. Nonetheless, it is an interesting feature. The answer given by physicist Leonard Susskind .. MORE
Growth: Consequences
Capitalism without Capital
In a long essay, I write The reduced significance of capital means that the cost of entry is lowered in many industries. Today, we see this in the shops that people have set up on eBay or in the blogs that compete with traditional pundits. …When a new project can be hatched in a basement .. MORE
Macroeconomics
Worrying About Demand
Robert J. Samuelson writes, First, the economy is bound to lose the stimulus of rising consumer debt. …Second, the benefits from defeating double-digit inflation are fading. His argument is that without the boost to consumer demand from increased borrowing and lower interest rates, the economy will stagnate. I find myself unable to get worked up .. MORE
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