EconLog Archive
Economics of Health Care
Health Insurance Idea
Brad DeLong writes, now the Kerry campaign has dusted off and brought forward a very clever idea from Brandeis’s Stuart Altman…Have the government take its task of social insurance seriously, and reinsure private insurers and HMOs: construct a ‘premium rebate’ pool to pay annual health-care bills over $50,000. In effect, the government would offer catastrophic .. MORE
Energy, Environment, Resources
Gas Tax Debate
David Ignatius is pro: The best plan I’ve seen for doing the politically impossible comes from an energy economist named Philip Verleger. …Verleger favors what he calls a “prospective gasoline tax,” which would allow the country four years to get ready to do the right thing. Congress would enact a stiff tax of $2 per .. MORE
Economic Growth
IQ and Living Standards
Randall Parker sent a link to a cross-country comparison of GDP per capita and the percent of the population with verbal IQ’s above 106. The equation fit very well, which led me to wonder how such a model could explain the low income of Communist countries. The article includes this note. We can reduce some .. MORE
Economic Growth
Innovation, Business Behavior, and Education
William Baumol compares the innovation strategies and results of large firms with those of small entrepreneurial firms. most private sector expenditure on research and development is attributable to very large corporations. These corporations are prime employers of scientists and engineers, personnel characteristically highly educated and technically erudite. But, despite this concentration of knowledge, talent, and .. MORE
Monetary Policy
Bond Market Vigilantes
If interest rates are the measure of monetary policy, then we have already seen a strong tightening. For example, since late March, the yield on the 10-year Treasury note — a critical interest rate since it’s the basis for mortgage rates — has jumped a full percentage point. That sentence appears right next to a .. MORE
Economic Growth
Jobs, Progress, and Displacement
Bruce Bartlett pointed to a Dallas Fed analysis of the causes and consequences of higher productivity. One of the sections, on the evolution of work, says The United States will continue to move up the hierarchy of human talents as it becomes more productive. Fewer jobs at relatively lower pay will be available for those .. MORE
Energy, Environment, Resources
Oil Reserves and Backwardation
I summarize my thinking about the Strategic Petroleum Reserve in an essay. I am not persuaded that the “convenience yield” of the SPR justifies its costs. However, even if it does, I believe it makes sense to have a rule that ties the amount of oil we hold in the SPR to the pattern of .. MORE
Cost-benefit Analysis
Wiretapping Costs and Benefits
In my latest essay, I argue that the costs of wiretapping are going up, while the costs of alternative surveillance technologies are going down. With ordinary phone service, wiretapping is nearly impossible to prevent. Regardless of what equipment the phone user employs, once an agency has access to the phone line, it can tap the .. MORE
Labor Mobility, Immigration, Outsourcing
Demographics
The International Economy Magazine collects twenty opinions on the issue of demographic change in one issue. For example, Michael Boskin writes, The United States is in far better shape to deal with these issues than the bulk of the developed world. Our fertility rate is near replacement and we are less hostile to immigration than .. MORE
Fiscal Policy
Bush on Trial
Jeff Frankel speaks for the prosecution. they will do anything for a few votes, even if their behavior is against the national economic and security interests and blatantly inconsistent with things they claim to stand for: small government, free trade, macroeconomic discipline, good neoclassical economics, and so forth. And they will favor political expediency even .. MORE
Growth: Consequences
Who is Rich?
David R. Henderson and Charley Hooper argue that most of us are rich. Except for the few hundred thousand who are homeless, the Americans whom the U.S. government defines as poor live exceptionally rich lives. In most ways, their lives are better than those of kings and queens just 200 years ago. Consider the quality .. MORE
Efficient Markets Hypothesis
Backwardation
As of May 20th, the June 2004 futures contract for light crude oil was at $41.66, while the June 2005 futures contract was at $35.58. When futures prices are below spot prices, this is known as “backwardation.” I believe that it represents a puzzle. Think of it this way. If you have oil, by holding .. MORE
Energy, Environment, Resources
Gasoline Hysteria
It’s not just Democrats. National Review Online’s James S. Robbins writes, A strategic plan for secure and sustained energy would have many elements — shifting imports to more stable, friendlier countries, exploiting more domestic resources, pursuing alternative energy sources, and rapidly promoting the use of breakthrough technologies such as the thermal depolymerization process (that can .. MORE
Energy, Environment, Resources
A Glimmer of Hope on Oil
In forecasting oil prices, I tend to defer to the efficient markets hypothesis. In some sense, oil in the ground has to compete with bonds and other interest-bearing assets. So, a reasonable approximation is that oil prices should be expected to go up at the interest rate. So, if the interest rate is 5 percent, .. MORE
Economics of Education
Compulsory Cultural Exchange?
In this essay, I propose a compulsory cultural exchange to try to improve national cohesiveness. With a cultural exchange program of this sort, the children of the liberal elites could experience first-hand the urban public schools which their parents believe must be protected from competition at all costs. Children raised by nannies could see how .. MORE
Economic Growth
Hard America, Soft America
I just breezed through Michael Barone’s Hard America, Soft America. Reviewers tend to quote the following passage (p. 12). UPDATE: see also this article by Barone which leads with the sentence I quote. For many years I have thought it one of the peculiar features of our country that we seem to produce incompetent eighteen-year-olds .. MORE
Economics of Education
Education Reform
I have a skeptical essay on the No Child Left Behind Act. The No Child Left Behind Act reflects outmoded, paternalistic, industrial-age thinking on education. Its real name should be No Educrat Left Behind. What we need instead is bottom-up, consumer-driven reform that is aimed at reviving our capacity to educate ourselves. For Discussion. What .. MORE
Energy, Environment, Resources
The Future of Oil
Lynne Kiesling and Don Boudreaux have already pointed to an article by Morris Adelman, who was at MIT back when Krugman and I were in grad school there. There is not, and never has been, an oil crisis or gap. Oil reserves are not dwindling. The Middle East does not have and has never had .. MORE
Economics of Health Care
Why is Health Care Inefficient?
Tyler Cowen raises a good question. Have you ever heard the claim that U.S. medical care is in trouble because we subsidize third-party insurance through the tax system? …If the argument is that tax deductibility leads to too much health care, I can see the logic. But then the problem is in the pretzels and .. MORE
Economic Growth
Progress and Displacement
Tyler Cowen points to a paper by Foster, Haltiwanger, and Krizan (unlike Cowen’s link, my link goes to the full paper) that stresses the importance for productivity growth of resources leaving inefficient firms and going to efficient firms. I was surprised by the following: A pervasive empirical finding in the recent literature is that within .. MORE
Austrian Economics
Caldwell, Hayek, and Math
Francis Fukuyama reviews Bruce Caldwell’s Hayek’s Challenge, an intellectual biography of Friedrich Hayek. As Caldwell notes, Hayek initially thought the dividing line between possible and impossible positivism lay in the distinction between natural sciences and social sciences, but by the 1950s he had come to understand that the issue was really one of complexity. A .. MORE