EconLog Archive
Uncategorized
Vacation until August 17
I’ll be back on August 17. Meanwhile, the comment threads remain open.
Macroeconomics
Is the Recession Over?
I say that the recession continues, according to an indicator of capacity utilization in the labor market. From March of 2001 through November of 2001 — the respective dates for the beginning and the end of the recession, according to the NBER — labor utilization fell from 97.8 percent to 94.5 percent. Since November of .. MORE
Income Distribution
Information Goods and Income Distribution
James Miller has an interesting thesis concerning information goods. Since most of the cost is up-front research and development, he argues that these goods will be priced attractively for mass consumption. As easily copied informational goods become more important to the U.S. economy, the differences in consumption between the rich and middle class will continue .. MORE
Economics of Education
Comment of the Week, 2003-08-06
On the continuing lively discussion of school vouchers, Boonton writes, The graduates of those ‘horrible’ [American public] schools went on to build not only an economic boom but one with heavy concentration in knowledge industries. This is the exact opposite of what you would expect to happen in a country with a failing educational system. .. MORE
Economics of Health Care
Health Care Reform
The pundits seem to be more radical than the politicians these days. The Washington Post’s Steven Pearlstein writes, First, in a rich country with an employer-based system, firms should have to provide a basic health insurance plan to all employees and their families… Second, all but the poorest among us have to get used to .. MORE
Microeconomics
Steven Levitt
The New York Times profiles Steven Levitt, the recent Clark Medal winner. Using data from more than 50,000 home sales in Cook County, Ill., he compared the figures for homes owned by real-estate agents with those for homes for which they acted only as agents. The agents’ homes stayed on the market about 10 days .. MORE
International Trade
China Menace?
The Washington Post’s Steven Pearlstein warns about China, now on the fast track to becoming a dominant player in the global economy and causing major disruptions along the way. Here in the United States, entire industries are being quickly wiped out as production is shifted across the Pacific Arguing differently is The Wall Street Journal’s .. MORE
Social Security
The Long-term Budget Outlook
In testimony before the House Budget Committee, William Gale of the Brookings Institution says, there is another big part of the problem: namely, the sunsets that are in the tax code. If all of those sunsets were removed, revenue would fall by 2.4 percent of GDP on a permanent basis. If, in addition, the alternative .. MORE
Information Goods, Intellectual Property
Terrorism Futures
A number of economists and others are defending the idea of a futures market to predict terrorism. This idea was abandoned after Senators objected to it. Hal Varian writes, The Iowa Electronic Markets has been predicting election results for 12 years using a system very much like the one that the Defense Advanced Research Projects .. MORE
Economics of Education
Comment of the Week, 2003-07-30
On the topic of vouchers and education, Jim Glass writes, The public school system in the past never worked any better than it does now. Arguably it was worse in the past. …There’s a lot of both selective memory and self-selection among people who talk about how the urban public schools worked so well back .. MORE
Information Goods, Intellectual Property
Price Discrimination and Information
Andrew Odlyzko has an interesting article on price discrimination in the information age. He sees the databases that companies are gathering (from supermarket membership cards, for example) as tools for charging on the basis of price sensitivity. price discrimination will grow, but in a concealed form. Stress will be on tactics such as bundling and .. MORE
Finance: stocks, options, etc.
Safe Investing
What is a safe investment nowadays? Zvi Bodie argues for inflation-indexed government securities. The probability that stocks will perform worse than risk-free investments, such as TIPS or I-Bonds, gets smaller the longer you hold them. After 30 years, there is a 95% chance that stocks will beat TIPS. But the severity of a possible shortfall .. MORE
Energy, Environment, Resources
Hydrogen Cars
Randall (“FuturePundit”) Parker takes down hydrogen cars by pointing to a number of scientific studies. The biggest problem with hydrogen as a means to reduce pollution is that it has to be produced from another energy source and the most cost competitive energy sources are all forms of fossil fuels. The production of the hydrogen .. MORE
Economics of Education
Vouchers and Education
In an essay called Mandatory Libertarianism, I address the distrust of markets voiced by opponents of vouchers in education. opponents asserted that there could not possibly be enough private schools to support a voucher system. However, if education were completely privatized, then every school would be a private school by definition. All of the schools .. MORE
Uncategorized
Hayek and Tobin
Referring to Hayek’s Competition as a Discovery Procedure, Brad DeLong wrote, this particular essay combines brilliance and antibrilliance in remarkable degrees…The second half wanders off into Hayekian hobbyhorses that I don’t think are very helpful. I wish that DeLong would elaborate on his concerns. Hayek says, A completely rigid wage structure is therefore liable to .. MORE
Income Distribution
High income and Wealth
Some recent articles on income and wealth. Thomas Sowell writes, high tax rates hit people who are currently earning high incomes — usually late in life, after having worked their way up in their professions over a period of decades. Genuinely rich people who have never had to work a day in their lives — .. MORE
International Trade
Comment of the Week, 2003-07-24
Peter Gallagher wrote this on his site, but it still counts as a comment. I had asked how one might explain trade and comparative advantage to a journalist. I usually use…the story about the busy lawyer and her secretary. The $200/hour lawyer types faster and more accurately than her $25/hour secretary. When the pressure is .. MORE
Uncategorized
Cost Disease and Class War
Steve (“econopundit“) Antler says that Baumol’s Cost Disease is the basis for a new form of class warfare, pitting service producers against goods producers. Much of what’s normally called “technical progress” is actually the “iron law” of service pricing in action. Postwar advances that replaced household servants with home appliances evidenced this law. We can .. MORE
International Trade
Trade Controversies
The New York Times has several recent articles on international trade. One piece discusses IBM’s evaluation of outsourcing. in recent weeks many politicians in Washington, including some in the Bush administration, have begun voicing concerns about the issue during a period when the economy is still weak and the information-technology, or I.T., sector remains mired .. MORE
Social Security
The $44 trillion shortfall
‘Jane Galt’ links to a paper that was notorious before it was released. Some news outlets reported that the measures of fiscal imbalance created by Jagadeesh Gokhale and Kent Smetters were suppressed by the Bush OMB department because they showed such a large present value shortfall: $44 trillion. Ironically, however, one of the main purposes .. MORE
Growth: Consequences
Income over Time
I share Brad DeLong’s fascination with anecdotes that illustrate historical comparisons of income. He posted one concerning the pay of a professor one hundred years ago. our professor sees himself as a reasonable and badly underpaid man. He is not asking for what he would see as the “large salar[y], commensurate with what equal ability .. MORE