EconLog Archive
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
Social Security
Boskin Scenario, Revisited
Will deferred taxes on IRA’s and similar savings plans save the Federal Budget, as a recent draft paper by Michael Boskin seemed to suggest? Not according to William G. Gale , Alan J. Auerbach , and Peter Orszag. Boskin’s projections of revenue from tax-deferred accounts have only a very modest effect on the long-term fiscal .. MORE
International Trade
Outsourcing
I try to make the classic case for free trade in an article about outsourcing to India. In fact, a good way to attain clarity in discussing the issue of outsourcing is to substitute the phrase “economic activity” for outsourcing: There sure has been an increase in economic activity with India lately. Aren’t you afraid .. MORE
Energy, Environment, Resources
Comment of the Week, 2003-07-18
I may have been on vacation for over a week, but the site was active with comments. On the limits-to-growth thread, Harold wrote, Less land is required for agriculture every year. Even less would be if so many governments would not pay their farmers to farm marginal land. This strikes me as an important point. .. MORE
International Trade
Come Back July 20
I will be on vacation until July 17, and I presume it will take me a few days to get back to blogging. Meanwhile, TechCentralStation has a couple of articles of mine that they may run while I am away. One concerns the issue of outsourcing to India as an example of free trade. The .. MORE
Social Security
Social Security Privatization Debated
Here is Peter Ferrara’s comeback to me on Social Security privatization and stock market scenarios. The views advanced by Kling, however, are not peculiar to him. They reflect what personal account reformers are calling these days the “pain caucus” approach to Social Security reform. The pain caucus thinks that the Social Security reform debate is .. MORE
Economics of Health Care
Health Care Economics
Some recent articles on the economics of health care: Helen Levy and Thomas Deleire compare the expenditure patterns of people who have health insurance to those of people without health insurance. I think that this is a useful reminder that many people are uninsured by choice. We may believe that they ought to have health .. MORE
Energy, Environment, Resources
Limits to Growth?
Bjorn Lomborg and Olivier Rubin have an article that concisely challenges the thesis that environmental limits to growth are binding. [the limits-to-growth argument’s] real weakness is the underlying assumption that planet Earth has finite, essential resources (such as oil, water, and grain) for which there are no substitutes. Few resources have turned out to be .. MORE
Behavioral Economics
Are Small Investors Irrational?
Hal Varian’s column cites research on the irrationality of small investors during the dotcom bubble. First, there were significant differences of opinion about the value of Internet stocks, with retail investors tending to be much more optimistic than insiders or institutions. Second, there were significant restrictions on short-selling those stocks, a way of betting that .. MORE
Economic Growth
Comment of the Week, 2003-07-02
In the discussion of perspectives on Social Security, I suggested that wages tend to rise with productivity, so that indexing Social Security to wages leads to higher benefits than indexing it to prices. Eric Krieg asked, Arnold, why are wages and productivity neccessarily linked? Could international competition ensure that wages are static while productivity soars? .. MORE