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August 2007
A Monthly Archive (97 entries)
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August 31, 2007
Economics of Health Care
Bryan Caplan
...according to Northwestern Mutual's statistical applet. But I suspect they don't realize that we should all expect to outlive our so-called "life expectancy." P.S. Notice how the applet does not include income as a predictor of life expectancy - contrary... MORE
Economics and Culture
Bryan Caplan
On recommendation of fellow gamer (and noted sociologist) Fabio Rojas, I've just read Gary Fine's Shared Fantasy: Role-Playing Games as Social Worlds. The book's 25 years old, but still remarkably fresh. You've got to love this passage:Because of their complexity,... MORE
Finance: stocks, options, etc.
Arnold Kling
Steven Pearlstein writes, The Pearlstein workout process starts where things should have started in the first place -- with the household income of the borrower. Using standard formulas, figure out how much they can afford to pay each month toward... MORE
August 30, 2007
Economics and Culture
Bryan Caplan
Democrats who study public opinion usually conclude that if their party wants to win elections, it should focus on populist economic policies, and ditch the culture wars. Over at Class Matters, an activist independently reaches the same conclusion: Left-wing activists... MORE
Cost-benefit Analysis
Bryan Caplan
I second Arnold's recommendation of Charles Lambdin's dissection of medical diagonosis. Here is wisdom:Where one sides in the debate is largely determined by what one makes of a single phrase: “Group statistics don’t apply to individuals.” This claim, widely believed,... MORE
Economic History
Arnold Kling
I cannot figure out the status of Brad DeLong's The Economic History of the Twentieth Century: Slouching Towards Utopia?. When I go here, it looks like an abandoned project. But just yesterday, Brad wrote, In some ways the world economy... MORE
Behavioral Economics and Rationality
Arnold Kling
Charles Lambdin writes, Groopman’s position, when his various arguments are gathered and assembled, becomes untenable. He admits doctors suffer from innumerable biases that diminish the accuracy of diagnosis, reducing many diagnoses to idiosyncratic responses fueled by mood, whether the patient... MORE
August 29, 2007
Economic History
Arnold Kling
He says The book challenges the modern orthodoxy of economics - that people are essentially the same everywhere, and with the right set of institutions, growth is inevitable - in three ways. First by showing that there were societies like... MORE
Public Choice Theory
Bryan Caplan
From my former student Jeremy Horpedahl:Lists of elections decided by one vote are often circulated in the popular press and by government election officials (interestingly, often directed at children). Most of the commonly cited examples are either completely wrong or... MORE
Books: Reviews and Suggested Readings
Bryan Caplan
That's an alternate title for my book suggested by Imaginary Politics. I think I would have stuck with The Myth of the Rational Voter, but it's still too bad this wasn't an option in the title contest!... MORE
Lawrence Kudlow writes, There are a number of deflationary factors behind my campaign to get the Fed to permanently inject new cash into the banking system and deal with the dysfunctional commercial paper market — as well as the general... MORE
August 28, 2007
Energy, Environment, Resources
Arnold Kling
He writes, The warming effect of carbon dioxide is strongest where air is cold and dry, mainly in the arctic rather than in the tropics, mainly in mountainous regions rather than in lowlands, mainly in winter rather than in summer,... MORE
Growth: Causal Factors
Arnold Kling
No, this is not another post on Gregory Clark. Enrico Spolaore and Romain Wacziarg write, We find that measures of genetic distance have a statistically and economically significant effect on differences in income per capita, even when controlling for various... MORE
Books: Reviews and Suggested Readings
Bryan Caplan
If neither the typical economist nor Milton Friedman himself qualify as market fundamentalists, who does? The only plausible candidates are the followers of Ludwig von Mises and especially his student Murray Rothbard. The latter does seem to categorically reject the... MORE
Economic Philosophy
Bryan Caplan
James Miller calmly defends torture at Overcoming Bias, without even mentioning terrorism:Some would argue that it’s excessively cruel to torture criminals. But both prison and torture impose costs on criminals. Why is one type of cost crueler than the other?... MORE
August 27, 2007
Economic Education
Arnold Kling
I recommend Robert Frank's lecture and Paul Romer talking about economic growth, as interviewed by Russ Roberts. Frank discusses economic education. He says that studies show that six months after an economics course, students are no better at answering basic... MORE
Economic Philosophy
Bryan Caplan
Economists have spent the last couple centuries scoffing at "just price" theory. Almost everyone now admits that prices have to fluctuate in response to supply and demand; it's silly to insist, for example, that the "just price" of a loan... MORE
Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Chris Hayes inveighs against the economically silly argument that immigrants do jobs Americans don't want:I don’t want to buy a slice of pizza for $45. It doesn’t mean I don’t like pizza! I’m not particularly interested in writing a book... MORE
August 26, 2007
Economic Philosophy
Bryan Caplan
What's so special about "overcoming bias"? Tyler's questioned Robin's obsession twice (here and here), mingling sensible observations with bizarre Dadaisms like:If I were allowed to retitle Robin's blog (and I am not), I would call it "Reaping the Fruits of... MORE
August 24, 2007
Politics and Economics
Bryan Caplan
Remember the political power survey that Ilya Somin and I pre-tested last year? Since then, we've added a third co-author - Wayne Grove of Lemoyne College - done extensive revisions, and been given access to 25 questions worth of space... MORE
Monetary Policy
Arnold Kling
John Tamny writes, Gold, the single best market indicator of a currency's true value, hit a high of $740 in the summer of 2006, and its 12 percent fall since then neatly foretold the troubles borrowers and lenders are experiencing... MORE
Energy, Environment, Resources
Arnold Kling
Jerry Taylor and Peter Van Doren write, some observers have argued that if gasoline taxes were increased and other taxes decreased so that overall revenue remained constant, a gasoline tax hike would provide a “double dividend.” That is, it would... MORE
August 23, 2007
Microeconomics
Bryan Caplan
How often has an Hispanic asked you for spare change? I've lived around LA, San Francisco, NYC, and DC, all of which have lots of Hispanics and lots of beggars. But as far as I can remember, I've never encountered... MORE
Economic Philosophy
Bryan Caplan
I was on the Mike Rosen show on Monday. Overall, he was a sympathetic host, until we got to the subject of... you guessed it... immigration. Unlike most opponents of immigration, though, he was quite explicit about his core principle:... MORE
Behavioral Economics and Rationality
Bryan Caplan
Kip Viscusi was kind enough to email me his estimates of the risks of terrorism, and gave me permission to share them. To be more precise, Viscusi told me that, in his judgment, the median number of deaths from domestic... MORE
August 21, 2007
Behavioral Economics and Rationality
Arnold Kling
You've heard about him from Tyler, Bryan, and me. Perhaps you've seen his posts at overcoming bias. Now you can see Robin Hanson give a brief talk as a keynote speaker. In the talk, he says that before you attach... MORE
Labor Mobility, Immigration, Outsourcing
Bryan Caplan
Since the new academic year is about to start, I thought I'd fill you in on what's new at GMU Econ. First, the bad news: Some of our experimentalists are leaving, including Nobel prize-winner Vernon Smith. Second, the good news:... MORE
Growth: Causal Factors
Arnold Kling
The Lifeboat Foundation claims Cryonics is the high-fidelity preservation of the human body, and particularly the brain, after what we would call death, in anticipation of possible future revival. Cryonics is an important transhumanist technology not only because it is... MORE
Economic History
Arnold Kling
Tyler Cowen writes, Why should we aggregate income comparisons by country (or the whole world) rather than by city? World history looks very different if we do the latter. Aren't most countries relatively recent inventions anyway? More generally, I would... MORE
Finance: stocks, options, etc.
Arnold Kling
I offer my perspective. What seems to have happened over the past year is that the hide-and-seek process in the financial intermediation process for mortgage loans to risky borrowers got out of hand. Some institutions wound up with more default... MORE
Economics of Education
Arnold Kling
Charles Murray says college admissions offices should stop using the SAT and instead use the SAT 2's (what we used to call the achievement tests). Getting rid of the SAT will destroy the coaching industry as we know it. ...A... MORE
August 20, 2007
Economics of Education
Arnold Kling
Ben Stein writes, To make friends with your teachers, try the following: • Read your assignments and be ready to discuss them. I can tell you, based on my years of teaching at glorious American University, stupendously beautiful University of... MORE
Books: Reviews and Suggested Readings
Arnold Kling
I'll excerpt quotes from some of these books below. The Bottom Billion, by Paul Collier. This book has been highly recommended by other bloggers affiliated with George Mason, and I agree. His thesis is that economic development is taking place... MORE
Cost-benefit Analysis
Bryan Caplan
Perhaps Keynes' best quip: "When the facts change, I change my mind. What do you do, sir?" Fair question. But what do you think about people who change their minds when the facts haven't changed? Wait, don't answer... see this... MORE
Cost-benefit Analysis
Bryan Caplan
Kip Viscusi is probably academia's most famous risk analysis. His decades of research document democracy's pervasive tendency to adopt regulations with absurdly high cost-benefit ratios - to spend billions fighting problems that barely exist. But in a recent interview with... MORE
Economics and Culture
Bryan Caplan
GenCon ended yesterday, but I've already been scooped by the competition - noted sociologist and legendary Pandaemonium Game Master Fabio Rojas. Don't miss his amusing comparison between GenCon and the American Sociological Association. Highlights: * ASA: People study socially marginal... MORE
Growth: Causal Factors
Arnold Kling
A new magazine is called The Future of Things. (Note the futuristic ".info" domain space in the web address.) One article is on video eyeglasses. Consumers want a device that is natural looking, discreet, lightweight, and portable. They don’t want... MORE
August 19, 2007
Institutional Economics
Arnold Kling
I've written much on the work of Barry Weingast and Douglass North. Last week's podcast features Russ Roberts interviewing Weingast. You get a good introduction to the North-Weingast view. On a related note, last week I read The Bottom Billion... MORE
'Audacious Epigone' writes (UPDATE: link fixed), A state's live-in desirability, as defined by CQ Press in the form of a livability index that considers 44 social, cultural, and economic factors, rigorously correlates with that state's estimated average IQ. The correlation... MORE
August 17, 2007
Finance: stocks, options, etc.
Arnold Kling
Paul Krugman writes, In the past, as Gretchen Morgenson recently pointed out in The Times, the bank that made the loan would often have been willing to offer a workout, modifying the loan’s terms to make it affordable, because what... MORE
August 14, 2007
Economic Philosophy
Bryan Caplan
This morning on Wisconsin public radio, I had the odd experience of being lectured by a caller about the virtues of markets. By extolling the wisdom of the economics profession, I led a Ron Paul supporter to conclude that I... MORE
Cross-country Comparisons
Bryan Caplan
I'm all for looking on the bright side of things, but I'm stunned that someone could be upbeat about post-colonial Africa. But someone is: Charles Kenny asks "Is Africa a Failure?," and almost says No:[C]omparative performance in economic growth is... MORE
Growth: Causal Factors
Bryan Caplan
No matter how many times a Julian Simon, Michael Kremer, or Steve Landsburg kills the Malthusian view that population growth reduces per-capita well-being, it comes back from the dead. The latest sighting of the Malthusian Zombie is in Greg Clark's... MORE
Economic Methods
Bryan Caplan
Robin lays down a challenge:Consider the people you most admire that you know personally, such as your parents, spouse, or work mentor. Now imagine the worse [sic] sort of things someone might plausibly accuse those people of. Are you confident... MORE
Tomorrow I'm flying to the world's greatest experimental game theory conference: GenCon. 25,000 people will play games of every description. If you believe in the project of experimental game theory, it's a data feast. I'd probably get audited by the... MORE
August 13, 2007
Microeconomics
Bryan Caplan
Today Alex makes a point that I drill into my graduate students: The assumptions underlying the standard market efficiency theorems are sufficient conditions for market efficiency, not necessary ones. Dani Rodrik and the many econ textbooks that claim that market... MORE
August 12, 2007
Economic Philosophy
Bryan Caplan
From an early age, I've furrowed my brow at the claim that "Absence of evidence is not evidence of absence." Huh? Absence of evidence is not absolute proof of absence, but surely if you don't notice your friend in a... MORE
Energy, Environment, Resources
Bryan Caplan
When Democratic candidates were asked, "What would you do to reduce gas prices?," their answers made very little sense. Which brings me to a Jeopardy-inspired puzzle: If those were their answers, what question were they really answering? To what policy... MORE
August 11, 2007
Energy, Environment, Resources
Bryan Caplan
Democratic candidates were asked "What would you do to reduce gas prices?" Their answers, with one exception, should make any economist wince. Here's Dodd, who leads with a long-winded complaint about foreign energy dependence and global warming, and ends with:I've... MORE
August 10, 2007
Political Economy
Arnold Kling
Jerry Muller, a historian of economic thought, emailed me a paper that begins, While there have been many historical instances of capitalism without liberal, representative democracy, there are no known cases of liberal, representative democracy without capitalism. Some other interesting... MORE
Behavioral Economics and Rationality
Bryan Caplan
"What would you do if Santa Claus turned out to be a Martian?" It's a hypothetical question. It's also a stupid question to ask in a presidential debate. What makes it stupid? First, it's very unlikely to happen. Second, knowing... MORE
Behavioral Economics and Rationality
Bryan Caplan
If I had to evaluate the quality of argument in the presidential debates with one word, it's "simplistic." But the level of simple-mindedness varies by topic. For foreign policy, at least, candidates often propose a policy, consider how other nations... MORE
Political Economy
Arnold Kling
Dani Rodrik writes, The problem with self-enforcing agreements is that they do not scale up. One of the findings from Elinor Ostrom’s extensive case studies is that self-enforcing arrangements to manage the “commons” work well only when the geographic scope... MORE
Business Economics
Arnold Kling
I write, Despite Young Dave's assessment, I think it is possible that Facebook will make the leap from its predominantly young demographic to mainstream, grown-up usage. If it does so, the transition will happen soon and will not take long.... MORE
August 9, 2007
Economics of Health Care
Arnold Kling
But he plays one at his blog. Dr. Bob offers his diagnosis of the health care system, in 8 parts. From Part 7. one of the latest gimmicks the health care policy wonks have dreamed up, more commonly known as... MORE
Economic Education
Arnold Kling
Commenters on a previous post asked for my test of economics. I will have to work on putting one together that maps to the national curriculum. Meanwhile, here are three old self-assessment quizzes from a few years ago: Trade Social... MORE
Politics and Economics
Bryan Caplan
One insight I've gleaned from reading a lot of presidential debate transcripts (see here, here, and here): Democrats and Republicans have radically different demonologies. Both sides see evil forces behind the world's troubles, but their lists have only one overlap.... MORE
Economics of Education
Arnold Kling
The assessment of high school students' knowledge of economics made a big splash in the news recently. See Matthew Yglesias or, for that matter, today's Washington Post. I was more interested in the standards being used than in the results.... MORE
Political Economy
Arnold Kling
Michael Cannon describes how the self-selection process in politics works against my ideas for reforming health care. “Insulation” is another term for spending Other People’s Money. Politicians are predisposed not to see spending Other People’s Money as a problem, because... MORE
August 8, 2007
Economics of Health Care
Arnold Kling
David Leonhardt writes, No one really knows whether preventive medicine will save money in the long run, let alone free up the billions of dollars a year needed to help pay for universal health insurance. In fact, studies have shown... MORE
Income Distribution
Arnold Kling
Todd Zywicki writes, In turns out that for the 1970s family, paying 24% of its income in taxes works out to be $9,288. And for the 2000s family, paying 33% of its income (a higher rate presumably because of progressivity... MORE
Economics of Health Care
Arnold Kling
I received some pushback on my latest health care essay, in which I argued that many of the people who are uninsured have made a choice and should live with the consequences. A reader pointed out that 9 million of... MORE
August 7, 2007
Economic Philosophy
Bryan Caplan
If you're reading this blog (or any blog!), you probably have some controversial factual beliefs. Suppose you managed to convince everyone that you were right on each and every controversy. How would the world change? Initially, you might assume that... MORE
Economic Education
Arnold Kling
According to Tyler Cowen, it's right here. He says (it's an interview with Bloomberg's Tom Keene) that right now blogs are the best place to learn economics. Probably not if your goal is to pass the exam. But it's an... MORE
Behavioral Economics and Rationality
Bryan Caplan
Another debate gem: Hillary on energy policy.CLINTON: ...But this issue of energy and global warming has the promise of creating millions of new jobs in America... So it can be a win-win, if we do it right.It's hard to interpret... MORE
Behavioral Economics and Rationality
Bryan Caplan
I've been reading presidential debate transcripts to get some op-ed ideas. Here's my nomination for the most bizarre discussion. It starts off with Mike Gravel saying the obvious:QUESTION: ... My question is for Mike Gravel. In one of the previous... MORE
Economics of Health Care
Arnold Kling
Notwithstanding what I wrote here, I try to make a case the "universal coverage" is no panacea for health care. I write, I would like to see the abolition of the tax break for company-provided health benefits as well as... MORE
Economic History
Arnold Kling
New York Times science writer Nicholas Wade writes, Historians used to accept changes in people’s behavior as an explanation for economic events, like Max Weber’s thesis linking the rise of capitalism with Protestantism. But most have now swung to the... MORE
Economics of Education
Arnold Kling
Our Library of Economics and Liberty has a lot of interesting new stuff this week. 1. On Econtalk, Eric Hanushek argues that: --human capital is measured more accurately by performance on standardized tests than by years of schooling --better teachers... MORE
August 6, 2007
Economics and Culture
Bryan Caplan
I'm puzzled where Arnold gets the idea that I'm an "atomist." Was it Tyler who wrote this?Perhaps the greatest truth about human nature that you do not find in the typical economics textbook is that people are sheep. Most human... MORE
Books: Reviews and Suggested Readings
Bryan Caplan
I'm looking for current events that work well as "hooks" to promote my book. Question: Where in recent headlines do you most clearly see the stamp of voter irrationality? Don't hold back!... MORE
Labor Mobility, Immigration, Outsourcing
Bryan Caplan
I can't remember the last time I favorably quoted a politician, but these paragraphs from Arlen Specter are good enough to justify a break with tradition:The main objective in legalizing the 12 million was to eliminate their fugitive status, allowing... MORE
Energy, Environment, Resources
Arnold Kling
Kevin Hassett writes If you want some action in the next few years, you can operate in existing markets. If you want to buy the right to sell your alternative fuel for the equivalent of $70 at any time in... MORE
Energy, Environment, Resources
Arnold Kling
James C. McWilliams writes, For many purposes that are well demonstrated with present practices, AOS models are very useful even without the necessity of carefully determining their precision compared with nature. These models are structurally unstable in various ways that... MORE
Economic Philosophy
Arnold Kling
Tyler Cowen writes, An oversimplified version of my view is that anything good is underprovided at the margin. This follows from a belief in strong network and peer effects, and a belief in the relevance of basic sociology. I think... MORE
Institutional Economics
Arnold Kling
On the topic of anarchy, Peter T. Leeson writes, Pirates created one of the earliest forms of written constitutions they called their “articles, which codified many of the rules that governed their ships, as well as punishments for rule breakers.... MORE
Microeconomics
Bryan Caplan
Who says there's no such thing as a free lunch? At least in downtown D.C., they're not hard to find. Just go to a reception at a think tank and chow down. But this is not without its hazards, as... MORE
Behavioral Economics and Rationality
Arnold Kling
The Economist reports, Geoffrey Miller is a man with a theory that, if true, will change the way people think about themselves. His idea is that the human brain is the anthropoid equivalent of the peacock's tail. In other words,... MORE
August 5, 2007
Behavioral Economics and Rationality
Bryan Caplan
Lots of bloggers identify with the "reality-based community." At first glance, it's a rather cultish self-description; after all, even the "faith-based community" thinks it's "reality-based." (Ever seen the bumper sticker where the Jesus fish marked "Truth" swallows the Darwinian land-fish?)... MORE
Information Goods, Intellectual Property
Arnold Kling
Steve Hsu writes, Both the malware and spam problems are a kind of tax on the overall internet population caused by the least sophisticated users (I won't reference IQ here, but there is certainly a correlation). It's the least sophisticated... MORE
Economics of Health Care
Arnold Kling
Ken Rogoff raises a very important issue. Many societies view healthcare as a right, not a luxury. When medical expenses constituted only a small percentage of income, as was typically the case 50 years ago, an egalitarian approach to healthcare... MORE
August 4, 2007
Energy, Environment, Resources
Bryan Caplan
In the past, I've asked people if they would prefer their climate to be warmer, cooler, or about the same, and reported that a straw poll of my undergrads leans in a pro-warmer direction. Now a new NBER paper strikingly... MORE
August 3, 2007
Microeconomics
Bryan Caplan
Behavioral economists often emphasize nominal rigidities - such as the tendency of list prices to stay the same in the face of shifts in supply and demand. Neoclassical economists often emphasize the Law of One Price - the tendency of... MORE
Cost-benefit Analysis
Bryan Caplan
Here's another story about a guy who wisely ignored the bad advice of a wise man: Hugo Lindgren (the guy who wrote Tyler's profile in New York Magazine) told Steve Dubner not to co-author Freakonomics!It should be noted, however, that... MORE
Cost-benefit Analysis
Bryan Caplan
Yesterday I said that Tyler Cowen is "the giver of the best and worst career advice I've ever gotten." In the comments, Jason follows up:Please share the best and worst career tips Tyler offered you.Some of the best advice:If you... MORE
Economics and Culture
Arnold Kling
In this interview for The American, Tyler Cowen speaks of many things. I believe he uses a term like "idea junkie" to describe the type of person who reads books by Gladwell, Levitt, and so on. He talks about the... MORE
Politics and Economics
Arnold Kling
The latest issue of Reason cites a study by economic consultant Gary Shilling. More than half of all Americans--53 percent--now depend on government for their income. In 1950 the figure was just 28 percent...Shilling totaled up federal, state, and local... MORE
August 2, 2007
Books: Reviews and Suggested Readings
Bryan Caplan
Today's the release date for Tyler Cowen's Discover Your Inner Economist. You've lost your chances to read the secret blog and get a personal podcast, but at least you can still buy the book! As I've said before, if you... MORE
Finance: stocks, options, etc.
Arnold Kling
From an analysis by J.P. Morgan: We expect that home prices, as measured by the Case-Shiller 10-city composite index, will decline as much as 15-20% from the June 2006 peak before this cycle hits bottom, potentially two or three years... MORE
Economic Methods
Arnold Kling
Tyler Cowen writes, I tend to trust sources who use their intelligence to point out flaws in their own positions. But is this more than an aesthetic preference on my part? In my view, this is much more than an... MORE
August 1, 2007
Economic Methods
Bryan Caplan
Don't miss David Henderson's amiable podcast on disagreement in economics. His tale of disillusion with Krugman alone is worth the price of admission. This podcast reminds me of an idea I've had for a while: Creating a meta-petition of policies... MORE
Institutional Economics
Arnold Kling
Iain Murray writes Speaker Pelosi has released the text of the New Direction for Energy Independence, National Security, Really Good Eggs and Consumer Protection Act (I snuck something else in there - can you tell?). It weighs in at a... MORE
Politics and Economics
Bryan Caplan
This didn't make it into the book, but one of my favorite remedies for voter irrationality has long been to simply clone John Stossel. His column today just reinforces my support for the clone-Stossel solution: More practically, [Caplan] thinks that... MORE
Books: Reviews and Suggested Readings
Bryan Caplan
Russ Roberts is asking readers of his blog to help him name his next book. Is this getting to be a GMU tradition? If so, I think Russ needs to use higher-powered incentives... like... an interview on EconTalk! Trust me,... MORE
Economics of Health Care
Arnold Kling
Mark Thoma writes, [Columnist Robert J.] Samuelson's continual focus on the budget deficit obscures the real problem. It doesn't matter whether health care is in the public domain or the private domain, the costs will be daunting either way if... MORE
Economics of Health Care
Arnold Kling
Alex Berenson thinks that he has gotten to the crux of America's health care spending problem. the partisan fight over insurers and drug makers is a distraction from a bigger problem: the relatively high salaries paid to American doctors, and... MORE
International Trade
Arnold Kling
The Washington Post reports, Powerful senators from both sides of the aisle, Schumer among them, are pushing two bills that threaten retaliatory action if China does not budge. For the first time, the idea is gaining broad support. The bills... MORE
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