Bryan Caplan and David Henderson

January 2004

A Monthly Archive (31 entries)

Intellectual Property

Information Goods, Intellectual Property
Arnold Kling
Here are some interesting comments on intellectual property that have appeared recently. Lawrence Lessig defends drug patents. I don't know if the alternatives would be better - I don't believe patents are bad in every case. But I do know... MORE

Who Should Own Iraq's Oil?

Growth: Causal Factors
Arnold Kling
Alex Tabarrok writes (it's short, so I'll quote the whole thing, except for links), The U.S. is no longer pushing privatization of the Iraqi oil industry primarily because the Iraqi's presently in control don't want it privatized for "nationalistic" reasons.... MORE

Outsourcing

International Trade
Arnold Kling
It's the topic du jour. Here is Dan Pink's story for Wired. A century ago, 40 percent of Americans worked on farms. Today, the farm sector employs about 3 percent of our workforce. But our agriculture economy still outproduces all... MORE

Finance and Macroeconomics

Finance: stocks, options, etc.
Arnold Kling
Tyler Cowen recommends two articles by Perry Mehrling on the relationship between the theory of finance and monetary theory/macroeconomics. One of the articles is a nice summary of the work of Fischer Black. What Black did was to conceive of... MORE

European Scientists and America

Revealed Preference
Arnold Kling
Do European elites hate America? Not if you judge on the basis of revealed preference. According to Time, No amount of funding can buy a culture of competitiveness. And if researchers don't see opportunities for reward, they'll take their talent... MORE

Ethics as Infrastructure

Growth: Causal Factors
Arnold Kling
Will Wilkinson argues that ethics are an important part of economic infrastructure. At bottom of both well-functioning markets and states are norms of behavior that dispose people to cooperate, to keep agreements, and to recognize and respect claims to property... MORE

Poverty and Income Distribution

Income Distribution
Arnold Kling
Robert E. Rector and Kirk A. Johnson offers some interesting facts concerning poverty in the United States, including Forty-six percent of all poor households actually own their own homes...The average poor American has more living space than the average individual... MORE

Fine-tuning Immigration

International Trade
Arnold Kling
Two articles today discuss economic ideas for fine-tuning immigration policy. James Miller writes, The guest worker program should allocate visas to communities and then permit each community to decide how many of their visas to issue. For example, if Northampton,... MORE

Social Security Privatization

Social Security
Arnold Kling
In this piece, I argue that the "transition cost" argument against privatizing Social Security is bogus. I also make my usual case against what I call the Stock Market Scenario. Finally, I conclude by saying that privatization is the ultimate... MORE

Government vs. Private Debt

Austrian Economics
Arnold Kling
A reader points to a fresh post on the Mises.org web site of a decade-old piece by Murray Rothbard arguing that the Federal government should not be allowed to create obligations for future taxpayers. One solution he proposes: I would... MORE

Roll Over, Ricardo

International Trade
Arnold Kling
That was the title I wanted for this essay on comparative advantage, which pulls together several ideas that I first trotted out on this blog. The essay is lengthy. Here is a short excerpt: To see why trade balance is... MORE

Bond Market

Finance: stocks, options, etc.
Arnold Kling
Brad DeLong wonders why the bond market isn't punishing the Bush Administration harder for its fiscal sins. He lists a number of possible explanations, including 1. The people who matter in financial markets are expecting either (a) that there will... MORE

Economics and Evolution

Behavioral Economics and Rationality
Arnold Kling
David Friedman uses evolutionary psychology to solve some puzzles in economics. Human beings have a functional module in their minds that deals with exchanges with other human beings. One feature of that module, hard-wired in by evolution, is that human... MORE

Lighthouses

Public Goods
Arnold Kling
In an essay on telecommunications pricing, Andrew Odlyzko spends some time reviewing the controversy about whether a lighthouse is necessarily a public good. As an example, a recent commentary [68] claimed that Coase had shown that "[i]nstead of the government-sanctioned... MORE

The Morality of the Market

Economic Philosophy
Arnold Kling
Jerry Muller, author of The Mind and the Market, gives a brief synopsis of his book. In previous societies, one's status as a peasant, artisan or merchant often defined one totally. Being a member of a guild, for example, encompassed... MORE

Surveys and Happiness

Behavioral Economics and Rationality
Arnold Kling
I have already given so-called "happiness research" a pretty hard bashing. But Tyler Cowen thinks that there is something to it. He links to a paper that says that people who work for nonprofits are happier than people who work... MORE

Ricardo's Difficult Idea Eludes Wonks

International Trade
Arnold Kling
Alex Tabarrok has a timely post that links to another Paul Krugman classic on the gulf between economists and noneconomists on the theory of international trade. Krugman writes, it is not obvious to non-economists that wages are endogenous. Someone like... MORE

Immigration Reform

Labor Market
Arnold Kling
In my essay, I made an off-hand comment. If the households and businesses that hire illegal immigrants do so in order to save the cost of paying taxes, and they will not pay the taxes even when an employment agency... MORE

Policy in a Fog

Regulation and Subsidies
Arnold Kling
In a wide-ranging essay on the problem of incomplete information, I write, Perhaps the most important point of all is that government officials operate in a fog. If one looks at all of the imperfections and shortcomings of the market,... MORE

Budget Woes

Fiscal Policy
Arnold Kling
Robert E. Rubin, Peter R. Orszag, and Allen Sinai make a case that our Budget deficits are not sustainable. If one includes the cost of the recently enacted prescription drug benefit, assumes that discretionary spending keeps pace with inflation and... MORE

Reminder about Comments

Econlog Administrative Issues
Arnold Kling
Use of the comment feature on this site is a privilege, not a right. In particular, even though we do not post email addresses, we need a real email address from everyone who comments. If you do not trust us... MORE

Income Mobility

Income Distribution
Arnold Kling
Is the United States becoming a more rigid class society? Paul Krugman sounded such an alarm, but Tyler Cowen issues a rebuttal. Yes, there is some correlation in wealth across the generations. But most of that correlation (almost seventy percent)... MORE

More Choice, Less Satisfaction?

Behavioral Economics and Rationality
Arnold Kling
Psychologist Barry Schwartz says that we may be worse off with more choice. "As a culture, we are enamored of freedom, self-determination, and variety, and we are reluctant to give up any of our options," he writes with characteristic directness.... MORE

Getting Ricardo Wrong

International Trade
Arnold Kling
Charles Schumer and Paul Craig Roberts rewrite Ricardian trade theory. Comparative advantage is undermined if the factors of production can relocate to wherever they are most productive: in today's case, to a relatively few countries with abundant cheap labor. In... MORE

The Employment Situation

Labor Market
Arnold Kling
We will get more news this Friday, but meanwhile Paul Krugman has stirred up a lot of invective, pro and con, with his comment that Such measures as the length of time it takes laid-off workers to get new jobs... MORE

Phelps on the Great Displacement

Macroeconomics
Arnold Kling
Edmund S. Phelps looks at one of my favorite topics: parallels between the current economy and the Great Depression. Each boom was caused by the advent of a new general-purpose technology -- commercially available electric power in the '20s, the... MORE

A Case for Paternalism?

Behavioral Economics and Rationality
Arnold Kling
Because it appears in the latest American Economic Review, I got around to reading carefully Daniel Kahneman's Nobel lecture, Maps of Bounded Rationality. He contrasts an intuitive way of processing information with a calculating, rational method. The central characteristic of... MORE

Tax Simplification

Tax Reform
Arnold Kling
Bruce Bartlett writes that we have met the enemy and he is us. If people really want simplicity, it can be done. But my experience is that when push comes to shove, people would rather have complexity and keep whatever... MORE

Phelps on Dynamism

Growth: Causal Factors
Arnold Kling
Edmund S. Phelps writes, My thesis is that the degree of dynamism in a nation's economy hinges on its development of some key economic institutions - company law and corporate governance, the population's preparation for business life, the development of... MORE

The 1990's Bubble Economy

Finance: stocks, options, etc.
Arnold Kling
William Nordhaus reviews two books on the economy of the 1990's. One of the books, by Janet Yellen and Alan Blinder, apparently finds little evidence that economic policy was a major factor in the rapid economic growth of that era.... MORE

Long-term Growth Forecasts

Growth: Causal Factors
Arnold Kling
What will economic growth look like in the 21st century? Mark Bahner solicited answers to this question from many economists and pundits, but only a few replied. Bahner's predictions are relatively optimistic. He foresees worldwide average GDP per capita rising... MORE

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