EconLog Archive
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
Economic Growth
“It’s Their Fault”
Nick Schultz cites work by Amir Attaran showing that drug company patents are not an obstacle to health care in poor countries–in fact, drug companies do not even bother to obtain patents in the poorest countries. Attaran’s research concludes that “poverty, not patents, imposes the greater limitation on access.” The “economic data leave no doubt .. MORE
Information Goods, Intellectual Property
Copyright Law and Utilitarianism
Richard A. Epstein has written an interesting essay on copyright law. He concludes, But for years now, my own private campaign has been to insist that the strength of the natural law theories rested on their implicit utilitarian (broadly conceived) foundations, which require some empirical evaluation of why given institutions promote human flourishing and through .. MORE
Economics of Education
The Science Race
An alarmist New York Times article about America’s relative standing in science has Cafe Hayek on edge. First, Russ Roberts wrote, The real question is not whether America is “ahead” or “behind” but whether students interested in science have good opportunities to explore science. Next, Don Boudreaux added, In the 18th century France boasted an .. MORE
Income Distribution
Athletes and Entertainers
Allen R. Sanderson writes, no one complains when Ray Romano (“Raymond”) gets $50 million a year—$1.8 million per episode—which takes about the same time to film as a baseball game…But let Alex Rodriguez sign for $25 million a year or let the mean baseball salary hit $2.5 million and commentators and the sports-talk-radio crowd get .. MORE
Economic and Political Philosophy
Hostility Toward Economics
Zimran Ahmed, commenting on a piece by David Warsh, writes, I’ve been thinking of why people find economics so fundamentally repugnant, and I think the fact that it goes against millennium of natural selection that re-enforced building, monitoring, and maintaining social relationships, is a large part of that. We humans are hard-wired to prefer interacting .. MORE
Finance: stocks, options, etc.
Uncovered Interest Parity
Brad DeLong wonders, U.S. interest rates are low relative to those of other major countries (save Japan). Where is my uncovered interest parity? Here is what Brad is thinking. If I own dollars today and want to invest in bonds that will pay me in dollars tomorrow, there are two ways that I might do .. MORE
Social Security
Social Security a Diamond in the Rough?
In this essay, I examine at length Peter Diamond’s arguments for Social Security as it exists currently. An excerpt: I doubt that elderly people who maintain their assets in lump sum format rather than as annuities are as irrational as Diamond and others suggest. In the real world, the elderly face many more sources of .. MORE
International Trade
Indian Labor Productivity
I’m at a conference put on by the Milken Institute, and hence the light blogging. At one session on outsourcing and jobs, Clarence Schmitz, the CEO of an outsourcing firm, said that they had anticipated needing 1.2 Indian workers to replace one U.S. worker. Instead, they found that they needed 0.8 Indian workers to replace .. MORE
Behavioral Economics
Gender Differences
Alex Tabarrok points to a paper by Uri Gneezy, Muriel Niederle, and Aldo Rustichini showing that although women solve a particular class of problems about as well as men on average, men improve their scores more than women when there is a winner-take-all tournament. The authors believe that this shows that men are more competitive .. MORE
Economics of Health Care
Health Care Productivity
Tyler Cowen has an interesting post on the comparison of the productivity of medical care in the U.S. vs. other countries. One brief excerpt: Americans pay more but get better health care in return. We die sooner because we eat too much and exercise too little, among other facts. Among, the many interesting links in .. MORE
Regulation and Subsidies
Drug Tax
Glenn Reynolds pointed to an interesting talk by Charles Whitebread on the history of the drug war. In the face of possible Constitutional opposition to what they wanted to do, the people in Congress who supported the Harrison Act came up with a novel idea. That is, they would masquerade this whole thing as though .. MORE
Cross-country Comparisons
Welfare State Free Lunch?
In his New York Times column last week, Jeffrey Madrick referred to the work of Peter Lindert on the ability of countries to grow in spite of welfare state distortions. Lindert’s argument can be found in Why the Welfare State Looks Like a Free Lunch The overriding fact about the cases of costly welfare states, .. MORE
Public Choice Theory
Public Goods, Private Goods, and Paternalism
My latest essay is on these topics. There are three layers to the argument against paternalism. The first layer is purely libertarian, which says that government compulsion of individuals is always wrong. The second layer is utilitarian, which says that, contrary to the intuition of Steven Weinberg and others on the left, we are better .. MORE
Uncategorized
Trade and the WTO
Andrew Rose has a paper entitled, Do We Really Know that the WTO Increases Trade?. His succinct Executive Summary: “No.” It turns out that membership in the GATT/WTO is not associated with substantially enhanced trade, once standard factors have been taken into account. To be more precise, countries acceding or belonging to the GATT/WTO do .. MORE
Social Security
Defending Social Security
In the March 2004 issue of the the American Economic Review, Peter Diamond defends the structure of Social Security. (I cannot find the article on the web, unfortunately.) He argues that in the absence of Social Security, individuals would save too little, under-utilize annuities, and under-purchase life insurance. To my mind, the heart of the .. MORE
Microeconomics
Asymmetric Price Adjustment
Andrew Chamberlain points to a Ph.D thesis by Matt Lewis on search costs and asymmetric price adjustment. The idea is that firms face a kinked demand curve (more elastic for price increases than for price cuts), because consumers search when they see a price increase, but not when they see stable prices. As a result, .. MORE
Economics of Education
Textbook Pricing
Are textbooks overpriced? This newspaper story looks at the issue. Rep. David Wu (D-Ore.) in November introduced a bill requiring to General Accounting Office to investigate the high price of college textbooks and whether publishers are marketing the same books at lower prices abroad. Deputy Gov. Bradley Tusk said Blagojevich wants the Board of Higher .. MORE
Macroeconomics
Presidents and Jobs
How many jobs can a President create? Former Clinton Administration economist Jeffrey Frankel says that “The answers don’t fit into a stump speech.” He writes, [The Democratic Presidential candidate’s] proposals are good economics, and they come by their populist ring honestly in that the current system is letting corporations get away with too much. But .. MORE
International Trade
Outsourcing Winners and Losers
When you open up trade opportunities, will the benefits go to people with high incomes or people with low incomes? Brad DeLong walks through the logic that says that if foreigners have a comparative advantage in high-income occupations (such as computer programming), this will be of more benefit to low-income U.S. workers than if the .. MORE
Finance: stocks, options, etc.
Housing Bubble, Again
Brad DeLong links to this scare piece, although I don’t know why. The article is not particularly well researched. For example, the author writes, What makes the current frenzy especially dangerous is that every relevant institution has an incentive to play along. Who, after all, is likely to say stop? Not the realtors. Not the .. MORE