EconLog Archive
Economic Growth
Economics of Reconstruction
Given the situation in Iraq, an economic analysis of the problem of developing political institutions would seem timely. Tyler Cowen and Christopher J. Coyne have drafted a paper on the topic. They write, Our core thesis is the following: reconstructions go well when they succeed at turning potential games of conflict into games of coordination. .. MORE
Economics of Education
Comment of the Week, 2003-09-11
On school vouchers, John Thacker wrote, Vouchers, depending on implementation, should decrease the strength of the link between housing and good schooling, since schooling would be less determined by where one lived. One would then expect the price of housing located in good school districts to fall relative to housing in less good school districts. .. MORE
International Trade
Cancun Trade Talks
I’ve always thought of these world trade meetings as being no more significant than the anti-globalization protests that they spawn, but I’ll defer to others, who think that they matter. Peter Gallagher owns the issue in the blogosphere (at least from a photojournalism perspective). TechCentralStation has a forum on the topic. Ronald Bailey is doing .. MORE
Macroeconomics
Grading the President in Macro
What grade should President Bush earn in macroeconomics? Brad DeLong writes, As a short-run employment- and demand-generating program, an objective grade would be a D if not an F. It was about cutting the taxes of the rich, improving incentives to save and rationalizing the taxation of capital income, and boosting the values of people’s .. MORE
Finance: stocks, options, etc.
Mortgage Depreciation
With Freddie Mac, a major mortgage lender (and once my employer) gripped by scandal, it might be useful to go over some basic economics of the mortgage business. In particular, I want so describe how mortgages are a depreciating asset. To most of us, a mortgage is a liability. It is the money that we .. MORE
Supply-side Economics
Politics vs. Economics, II
(Note: this continues the discussion from Politics vs. Economics.) Another topic on which politics and economics can be separated is “supply-side tax cuts.” The meaning of this phrase has changed somewhat over the years. During the Reagan era, a supply-side tax cut was a cut in tax rates that would yield an increase in tax .. MORE
Economics of Education
Two-Handed on Vouchers
What would a new economics blog be without “on the one hand…on the other”? Marginal Revolution’s Tyler Cowen writes, If we are going to move forward with vouchers, I would like to know what the plan will look like, once it gets through the political meatgrinder. I don’t know any voucher proponent who has done .. MORE
Macroeconomics
Labor Market Puzzle
The latest labor market data show that aggregate hours worked fell again in August. This means that LUCY, my indicator of labor capacity utilization, also dropped. The longer that this productivity-cushioned recession continues, the more of a puzzle it presents to macroeconomists. The issue is this: if productivity is rising much faster than real wages, .. MORE
Economic Growth
Politics vs. Economics
On one of the comment threads, a reader asked me if I disagreed with the economics of Lawrence Kudlow. “Honestly, I never thought he had any to disagree with,” was how I began my reply. Let me revise and extend my remarks. I think that it is common to assume that there is a “conservative .. MORE
Game Theory
Economics of Content
Clay Shirky writes that the Internet helps to break the link between fame and economic success for writers. For an author to be famous, many people had to have read, and therefore paid for, his or her books. Fortune was a side-effect of attaining fame. Now, with the power to publish directly in their hands, .. MORE
Income Distribution
Imputed Income
Jeff Madrick discusses the work of Elizabeth Warren and Amelia Warren Tyagi on the plight of middle-class two-income families with children. what families spend a lot more on, the authors calculate, is a house in a safe neighborhood with a good school — about 70 percent more a year, discounted for inflation, for the typical .. MORE
Uncategorized
The Civility Plea
‘Jane Galt’ and Kevin Drum have made “civility pleas” on their web logs. What they are saying is that people’s comments ought to treat opponents with respect. Let me add a similar plea to this blog. I’ve always felt that the stronger the case for the idea, the less need to attack the person. Calling .. MORE
Macroeconomics
Structural or Cyclical Unemployment?
I continue to think that the term jobless recovery should be replaced by productivity-cushioned recession. Meanwhile, Erica L. Groshen and Simon Potter have written more about the phenomenon. we look for evidence that structural change played a dominant role in the 2001 recession. Our investigation centers on two questions: Did temporary layoffs decline relative to .. MORE
Regulation and Subsidies
Comment of the Week, 2003-09-03
Regarding the New Deal, Boonton wrote, how much of the New Deal has survived? While national economic planning seems to have finally been discredited…the bulk of the New Deal remains firmly established not only in the US but in most successful, Democratic, nations. I have also seen it argued that economic shocks after the New .. MORE
Growth: Consequences
Manufacturing Crisis?
On Labor Day, President Bush announced that there would be a new Assistant Secretary of Commerce charged with addressing the decline in manufacturing employment. This prompted a number of skeptical responses. Yesterday, Daniel Gross wrote, The new assistant secretary must persuade American workers that broad, immensely powerful forces are at work against manufacturing in the .. MORE
Cost-benefit Analysis
Government Incentives
Does the absence of a bottom line affect government behavior? Consider this story from the Washington Post about the “busy season” for GTSI, a company that sells technology products to government agencies. Fall is coming, and for GTSI that means the end of the federal fiscal year is approaching and that civil servants are rushing .. MORE
Finance: stocks, options, etc.
High-Beta Houses
Kenneth Harney reports that prices for condominiums rising have shot up. whereas the nationwide median price of single family resale homes was up by 7.4 percent during the past year (to $169,900 at the end of the second quarter), the median resale condo price was up 15.1 percent during the year (to $163,500). There are .. MORE
Fiscal Policy
Budget Analysis
The Washington Post lead editorial for August 29 adjusts the baseline budget forecast for several factors. The largest is discretionary spending, which they argue will grow at the rate of the economy rather than at the rate of inflation. The next largest is extension of most of the Bush tax cuts beyond their scheduled expiration .. MORE
Economics of Education
Academia vs. Reality
I probably need to wear an asbestos suit after posting this essay. A few years spent working in a corporate or government setting would benefit professors by giving them first-hand knowledge of organizational behavior and politics in practice. I think that both our society and our universities would be improved if professors were required to .. MORE
Microeconomics
Demand Too Elastic?
London’s congestion charge, which seemed like such a good idea from an economic perspective, may have run afoul of elastic demand, according to an article by Iain Murray. economists…estimated that a reduction in traffic of 15 percent would require that £5 fee. Unfortunately, they got their sums wrong. The reduction in traffic has been far .. MORE
Economics of Health Care
Canadian Health Care
Pierre Lemieux discusses the distortions in measured costs under a socialized system. Criticizing an article in the New England Journal of Medicine that reports on lower administrative costs in Canada than in the United States, he writes, Canada’s long waiting lines saves the health system money but at a cost to patients… The second category .. MORE