EconLog Archive
Economics of Education
Adverse Results for School Vouchers
Chang-Tai Hsieh and Miguel Urguiola find evidence that in Chile school vouchers caused schools to compete for the best students rather than compete to deliver better education. Although statistically insignificant, the point estimates suggest that, if anything, test scores experienced a relative decline in communities where the private sector made greater inroads. The results of .. MORE
Austrian Economics
Doubts about Planning
Jonathan Rauch argues that the absence of a plan for post-war Iraq is a feature, not a bug. In truth, the planning mind-set is exactly wrong for Iraq. Anything might have happened after the war: a flood of refugees, a cholera pandemic, a civil war—or, for that matter, the discovery of an advanced nuclear program. .. MORE
Energy, Environment, Resources
Basic Oil Economics
Holman Jenkins makes some useful points. nowadays U.S. consumption of Persian Gulf oil totals about $18 billion a year, less than we spend on computer parts from Asia. The price mechanism works: Oil would flow in greater volume from higher-cost sources in the unlikely event of a catastrophic disruption of supplies from the Gulf. Canada, .. MORE
Macroeconomics
The Great Depression
The Great Depression continues to be a fascinating period to study. As Thomas Sowell points out, the myth is well entrenched that the New Deal pulled the economy out of the Depression. Only now has a book been written in language that non-economists can understand which argues persuasively that the policies of the Roosevelt administration .. MORE
Behavioral Economics
Training Economic Man
Kevin McCabe says that experimental economics offers three implications for policymakers trying to foster economic growth through the adoption of markets. First, safeguards must be put into place to protect impersonal exchange from our innate desire for personal exchange. Second, policy must take into account the heterogeneity of individual cognitive strategies that are observed in .. MORE
Economics of Education
Economic Arguments
A few days ago, controversial radio personality Rush Limbaugh created a controversy. As a commentator on a football pre-game show, he said (1) The Philadelphia Eagles’ quarterback was overrated by others in the media. (2) The reason that the quarterback was overrated was because the reporters were trying to promote a black quarterback. The second .. MORE
Economics of Health Care
Health Insurance Reform
Recent stories on an increase in the number of Americans without health insurance prompted a couple of essays on health insurance reform. Ronald Bailey writes, One way to increase the number of insured Americans is to break the link between a job and a health insurance policy. I also have an essay that argues against .. MORE
Behavioral Economics
Various Articles
Posting here will be infrequent until later in October. Meanwhile, here are some links that may be of interest. Is the insecurity of Microsoft software an externality that should be regulated or taxed? An example of professional licensing as rent-seeking (in more ways than one). Robert Hall draws out the implications of extrapolating ever-increasing health .. MORE
Economics of Education
Libertarian Redistribution
In an essay called Bleeding-Heart Libertarianism, I sketch a system for using a consumption tax with a negative-income-tax feature to replace government-provided health care, education, and income security. Does the bleeding-heart libertarian approach seem harsh? Actually, the Welfare State is worse. The Welfare State targets much more of its largesse to people who are less .. MORE
Macroeconomics
Meltzer on the Labor Market
In an earlier post, I asked, What is the likelihood that some of the weak job growth and strong productivity growth of the past two years is in part a statistical mirage? Allan Meltzer says that the likelihood is high. What many companies have done is outsource some services previously performed in house. For example, .. MORE
Finance: stocks, options, etc.
Stock Options
In response to my earlier post on executive compensation, Jonathan Wilde wrote, First, to answer Arnold’s question – since all economic values are subjective, there is no question of there being a ‘correct’ valuation. All voluntary economic exchanges depend on the two parties valuing the exchanged goods in reverse order. I have yet to hear .. MORE
Energy, Environment, Resources
California Reality
As a dean at Berkeley, Hal Varian has a personal interest in California. In his column today, he offers some plain-spoken economics lessons. Most California voters think the electricity crisis contributed to the state budget deficit. If only things were that simple. In reality, not a cent of the deficit was caused by electricity prices: .. MORE
Energy, Environment, Resources
Comment of the Week, 2003-09-24
On the subject of the environment and technology, D-squared writes, Future generations cannot make contracts with us, so their preferences about the rate of extraction don’t figure in the market price. Suppose that the desire for ivory threatens to make elephants extinct. Economists think that part of the problem is that nobody owns the elephants. .. MORE
Human Capital
Executive Compensation
Two interesting articles in the latest Journal of Economic Perspectives. Lucien A. Bebchuk and Jesse M. Fried focus on the agency problem. Managers have an interest in compensation schemes that camouflage the extent of their rent extraction or that put less pressure on them to reduce slack. As a result, managerial influence might lead to .. MORE
Price Controls
The Case for Price Gouging
C.C. Kraemer argues that laws against price gouging are a bad idea. rather than harming the victims, the profit motive actually helps them because the result is an increase in supplies. That assures that everyone who needs the plywood will get it, an unlikely occurrence if prices are not allowed to rise. When the stores .. MORE
Energy, Environment, Resources
Environment-friendly Farming?
Jonathan Rauch says that agriculture tends to abuse the environment. The trade-offs are fundamental. Organic farming, for example, uses no artificial fertilizer, but it does use a lot of manure, which can pollute water and contaminate food. Traditional farmers may use less herbicide, but they also do more ploughing, with all the ensuing environmental complications. .. MORE
Productivity
Productivity and Unemployment
In The Labor Market Puzzle, I sketched a one-sector model in which marginal productivity was falling as average productivity was rising. This would account for a drop in employment along with higher average productivity. Paul Kasriel has a more extended description of this model. It includes basic diagrams. What do you suppose has been happening .. MORE
Human Capital
Minimum Wage and CEO Pay
Marc Brazeau asks (see Steve Antler’s site), Two common arguments against raising the minimum wage are possible inflationary effects and job loss. Why aren’t these issues raised in relation to executive compensation? I think that the conventional wisdom is that inflation is determined primarily by monetary policy. I do not think that contemporary economists would .. MORE
Macroeconomics
The Two Labor Market Surveys
The U.S. Department of Labor uses two different surveys of the labor market. As Alan Reynolds put it, When government officials asked people if they had a job last month, 137.6 million said “yes.” But when employers were asked, they said they had only 129.8 million on nonfarm payrolls. However, Alan Krueger says that there .. MORE
Economics of Education
Comment of the Week, 2003-09-17
On the topic of college tuition, Andrew Martin writes, I disagree with the idea that tuition is high because the government helps pay for it. UNC, for an instate student is much lower than that $20 grand for the precise reason that the state funds it. However, with the budget crunch and massive expansion plans .. MORE
Economics of Education
Friedman Interview
John Hawkins’ interview of Milton Friedman touches on many subjects. Friedman is not terribly worried about Social Security. we’re a very strong country, lots of able people, lots of active entrepreneurs, and so the Social Security system will be a burden, but it won’t destroy the country. I think it will be changed of course. .. MORE