EconLog Archive
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
Economics of Education
College Tuition
Why is college tuition so high? In an essay, I argue that colleges today offer more lifestyle consumption benefits. college represents a different bundle of services than it did thirty years ago, and part of where the increase in tuition goes is to pay for this rise in aesthetics. I also question whether colleges have .. MORE
Fiscal Policy
The Budget Debate
The Congressional Budget Office provides an analysis of the long-term Budget outlook. The projections also assume for analytical purposes that aggregate federal revenues will level out at 19 percent of GDP in 2020, reflecting the higher end of the range over which they have fluctuated during the post-World War II period (18 percent was the .. MORE
Information Goods, Intellectual Property
Intellectual Property
N. Stephan Kinsella argues against the concept of intellectual property. On the utilitarian argument for intellectual property, he says, It is debatable whether copyrights and patents really are necessary to encourage the production of creative works and inventions, or that the incremental gains in innovation outweigh the immense costs of an IP system. On the .. MORE
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