EconLog Archive
Energy, Environment, Resources
Sustainability
Michael Lind offers an optimistic assessment of the prospects for sustaining a world population of 9 billion. As affluence grows, the amount of energy and raw materials “consumed” by machinery will escalate even more rapidly than human consumption. But this need not mean an end to the machine age. If manufacturing processes were to imitate .. MORE
Growth: Consequences
The Productivity Story
Is productivity growth the most overlooked economic story? Brad DeLong thinks so, and Virginia Postrel agrees. The productivity story is boring. It isn’t really, but editors think it is. There’s no obvious conflict, no scandal, no little guy getting hurt (unless you portray rising productivity as throwing people out of work, which is the most .. MORE
Regulation and Subsidies
Asbestos Litigation Costs
Michell J. White writes, That asbestos was so widely used from the 1950’s to the 1980’s suggests that multiple regulatory systems failed, including workers’ compensation, workplace safety regulation, product safety regulation, and liability law. …Will the asbestos mess at least have the beneficial effect of changing firms’ attitudes toward the risks of using asbestos-like products .. MORE
Regulation and Subsidies
SEC Taxes Mutual Funds?
The latest SEC regulation of mutual funds draws fire from Stephen Bainbridge. He quote Cindy Glassman, an SEC Commissioner who dissented, as pointing out that no cost-benefit analysis was done of the proposal to require mutual funds to have an outside board chairperson. Bainbridge continues, But it becomes even more outrageous when one considers Glassman’s .. MORE
Labor Market
The Minimum Wage, Con’t
Glen Whitman writes, The minimum-wage advocates who have thought much about it (of course, many haven’t) usually have in mind some kind of monopsony model – that is, they assume a market in which employers have some degree of monopoly buying power. Under monopsony, wages can in theory be increased within a certain range with .. MORE
Economic Growth
Export-led growth?
Two piece in the Wall Street Journal challenge the idea that export-led growth is the path to economic success. Amar Bhide writes, The Indian software industry now employs around half a million professionals. Under optimistic projections, the industry will add another half million in the next seven years. But over the same period, 14 million .. MORE
Regulation and Subsidies
The Minimum Wage
Why oh why can’t we have a Brad DeLong who will put the adults in charge of the clown show that is John Kerry’s campaign? (For those of you who do not read DeLong, I am borrowing his anti-Bush tropes) Don Boudreaux writes Proposals, such as Kerry’s, to raise the minimum wage modestly will cause .. MORE
International Macroeconomics
The Balance of Saving
Should we worry about what I call the Balance of Saving (our trade deficit)? Don Boudreaux says no. Why should I care if new enterprises are financed out of the savings of a stranger from South Dakota rather than out of the savings of a stranger from South Korea? For Discussion. Try the same sentence, .. MORE
Finance: stocks, options, etc.
Housing P/E’s
Ed Leamer’s analysis of home prices in the San Francisco Bay area is summarized. His findings: In the Bay Area, the average P/E for a house shot up to 13. 8 in the first quarter of 2004, compared with 7.2 in 1999 and 2000. Today’s ratio is more than a third higher than it was .. MORE
Economic Growth
Moore’s Law for Storage
Tyler Cowen points to a historical timeline of the cost of data storage on hard disk drives. According to the timeline, the cost fell below $100 per megabyte in May of 1984. It fell below $1 per megabyte ten years later, meaning that it fell by a factor of 100 over that period. That means .. MORE
Economic and Political Philosophy
Economists’ Assumptions
Donald J. Boudreaux writes, What about the assumption of self-interest? It, too, is equally inoffensive. All that economists need to be true on this front is that each person generally cares more about himself, his loved ones, and his friends than he cares about strangers. Economic theory does not require that each individual care exclusively .. MORE
Social Security
The Economics of Immortality
Aubrey de Grey reviews a Brookings volume on the economics of increased longevity. Aubrey has a more optimistic vision than the authors. rejuvenation research…will anticipate and remedy the life-threatening degenerative changes appearing at newly achieved ages with ever-increasing efficacy and lead time. This will bring about the greatest economic change of all in society: the .. MORE
Income Distribution
Tax Cuts for the Rich
Philosopher Keith Burgess-Jackson dissects the phrase. Nobody, to the liberal, has a valid claim on anything, even his or her talents. Those who produce or acquire wealth do so not because of effort, initiative, creativity, or sacrifice. They’re just lucky. They were born healthy and into loving families. Others are unlucky. They were born unhealthy .. MORE
Economic Growth
From Galbraith to Spitzer
In an essay on the past and present positions of those who advocate big government, I write, The view that only large industrial enterprises matter seems preposterous now. If Galbraith had been right, then the industrial structure of the 1960’s would still exist today. Instead of what Alvin Toffler in 1980 called the “third wave,” .. MORE
Behavioral Economics
Rational Decisions and Pharmaceutical Regulation
Today’s Washington Post contains another op-ed piece by a physician, and of course he is in favor of price controls on prescription drugs. The pharmaceutical industry will intone its familiar mantra: The cost of drugs is a relatively small percentage of total health care costs; innovation requires investment; research-based companies need to realize an adequate .. MORE
Economic Education
Future of Education
I speculate on the future of education. The first ongoing trend, one that affects the demand for education, is rapid technological change. As the pace of change continues, or even accelerates, it causes all human capital to depreciate more rapidly. …The second ongoing trend, one that affects the supply of education, is progress in cognitive .. MORE
Cross-country Comparisons
U.S. vs. Europe
Steve Antler points to a study by Fredrik Bergström & Robert Gidehag of various indicators of prosperity in the U.S. relative to countries of the European Union. Most Americans have a standard of living which the majority of Europeans will never come any where near. The really prosperous American regions have nearly twice the affluence .. MORE
Economics of Health Care
Medicare Proposal
Laurence Kotlikoff suggests this. All Medicare participants would receive individual-specific vouchers on October 1st of each year to purchase insurance coverage for the following calendar year. The size of the voucher would be based on the participant’s current medical condition (an idea first suggested by Peter Ferrara of the Institute for Policy Innovation and John .. MORE
Energy, Environment, Resources
Run Out of Oil?
George Will quotes Cafe Hayek’s Russ Roberts’ pistachio example. Of course, oil supplies are, as some people say with a sense of profound discovery, “finite.” But that distinguishes oil not at all from land, water or pistachio nuts. Russell Roberts, an economist, says: Imagine that you love pistachio nuts and are given a room filled .. MORE
Social Security
Inappropriate Annuities
Are annuities appropriate for the elderly? The Securities and Exchange Commission and the National Association of Securities Dealers say not necessarily. The SEC also today issued an alert to remind investors that variable annuities are not suitable for all consumers, especially investors who need the money in the short term or who borrow against their .. MORE
Economic Growth
Lucas on Growth
Robert E. Lucas, Jr. (Nobel, 1995), sounding much like Brad DeLong, gives a historical overview of economic growth which is Malthusian up until around 1800 (meaning that population growth ate up, so to speak, increases in production), followed by a steadily increasing standard of living. The theory Lucas uses to tie together these two disparate .. MORE