Bryan Caplan and David Henderson

September 2007

A Monthly Archive (84 entries)

Justin Wolfers on Divorce

Political Economy
Arnold Kling
Guest-blogging at Marginal Revolution, Wolfers writes, When the latest divorce numbers came out last week, they once again confirm this quarter-century long decline in divorce, but the media (including the Times, Post, and the Inquirer) chose instead to write (incorrectly)... MORE

Gavin Kennedy, Adam Smith, and Gregory Clark

Economic History
Arnold Kling
Kennedy writes, In the extreme, I have suggested that economic history of the last 10,000 years (and for long enough before that) the history of the poor is not the decisive factor in economic development: it is the history of... MORE

What I Learned About Journalists This Summer

Economic Education
Bryan Caplan
Arnold's very down on journalists:When you get an answer that works with five-year-olds, you can move on to try and explain it to journalists. For journalists, the market only exists to cause problems (it's like Matt Ridley's complaint that the... MORE

Journalists and Five-year Olds

Economic Education
Arnold Kling
Bryan asks, can you write an economically sound answer to the question "When [i.e., why] Did Life For the Poor Get Better?" that a five-year-old could understand? When you get an answer that works with five-year-olds, you can move on... MORE

Market Power Corrupts

Institutional Economics
Arnold Kling
Werner Troesken writes, Why are occasional regime changes desirable for public utility markets? The answer builds on three observations. First, corruption was endemic to public utility industries; corruption existed, in some form, across all regulatory and ownership regimes. Second, regime... MORE

When I teach undergraduate labor, I lecture on "Why the Standard Story of Labor Is Wrong." Here's the standard story, according to me:1. In the days before the minimum wage, unions, etc., life was terrible for workers because employers paid... MORE

Bryan's Cover Story in Reason

Economic Education
Arnold Kling
is here. His topic is the four types of bias that non-economists hold. He concludes, Economists have a love-hate relationship with systematic bias. As theorists, they deny its existence. But when they teach, address the public, or wonder what is... MORE

Free Online Textbook

Economic Education
Arnold Kling
Timothy Taylor, one of my favorite economists, has a textbook that you can read for free, provided you are willing to put up with registering at the site and having some of the pages be ads. I thought that the... MORE

Reply to Clark

Economic History
Bryan Caplan
Clark and I are moving toward agreement on the implications of the Malthusian model, but I'm still not satisfied. He writes:Caplan replaces my figure 2.1 with one where disease and harvest failures cause the technology schedule to move down but... MORE

Clark Replies

Economic History
Bryan Caplan
Gregory Clark emailed me the following reply to my criticism and asked me to post it to the blog. I'm happy to oblige. Everything that follows is Clark, not me. Clark right on Malthus! Bryan Caplan raises some interesting points... MORE

Institutions and American economic performance

Institutional Economics
Arnold Kling
Sukkoo Kim writes While factors associated with slavery, capital, labor and resource endowments may have contributed to the growth of U.S. regional spatial inequality, the divergence in regional political and legal institutions was also a major contributing factor. In the... MORE

Arnold on Clark

Economic History
Bryan Caplan
I think Arnold is mis-stating not only Malthus, but even Clark. Maybe it's just semantic, but I don't think so. Here's Arnold:A bad year for grass (the bad harvest scenario) starves a lot of the herd, which is bad. But... MORE

Bryan is not happy with the Gregory Clark version of the Malthusian model. I admit that I was unhappy with it, too, but I think I now understand it better. I don't think that graphs help, because one of the... MORE

Hindsight Bias

Political Economy
Arnold Kling
My latest essay is on this topic. it sets up a false set of expectations about what government can do. For example, people believe that government can regulate financial markets so that there are never any bubbles or miscalculations, no... MORE

In the Malthusian economy before 1800 economic policy was turned on its head: vice now was virtue then, and virtue vice. Those scourges of failed modern states - war, violence, disorder, harvest failures, collapsed public infrastructures, bad sanitation - were... MORE

Reader Survey--keep responding

Econlog Administrative Issues
Arnold Kling
If you have not responded to my reader survey, please do so. A couple of people expressed regret that Bryan and I don't mix it up with the commenters more. Keep in mind, though, that I am more likely to... MORE

Trade and the National Good

International Trade
Arnold Kling
Robert Driskill writes First consider the assertion that "nations generally gain from trade, however, it is quite possible that international trade may hurt particular groups within nations... ." What could the authors [Krugman and Obstfeld, in a leading international economics... MORE

The Flight from Intelligence, or That Which Must Not Be Named

Behavioral Economics and Rationality
Bryan Caplan
This cracked me up:SAT scores have been interpreted in a number of different ways, both by the test's designers themselves (Educational Testing Service) and by college administrators, high school counselors, the popular press, and researchers in fields such as education... MORE

Reader Survey

Econlog Administrative Issues
Arnold Kling
This is not an official Econlog reader survey™. If it were, I would consult my co-blogger Bryan as well as Lauren, our lovely and talented webmaster. But my previous post left me wondering. Does our readership regularly read Mankiw's blog... MORE

Ph. D Curriculum in Economics

Economic Education
Arnold Kling
Reader Chris Morgan asks, Your frequent, insightful critiques of the weaknesses in mainstream Ph.D. curriculum's has made me ponder this (you do have this question coming): if you were to put together a Ph.D. program, what would be (1) essential... MORE

A Farewell to Alms: Overview of My Critique

Economic History
Bryan Caplan
I've finally finished Gregory Clark's A Farewell to Alms. Like everyone else, I agree that it's well-written and addresses important topics. And I think lunch with Clark would be fun. But frankly, I can't find much else good to say... MORE

Happiness Research at a High School Reunion

Behavioral Economics and Rationality
Bryan Caplan
I've never been to a reunion, and don't plan to start. Compared to my present, my past is very depressing. But perhaps I'm just not as resourceful as Michael Blowhard, who has a long post of pithy observations on the... MORE

Unemployment

Labor Market
Arnold Kling
Robert Shimer writes, Using United States data from 1948 to 2004, I find that there are substantial fluctuations in unemployed workers’ job finding probability at business cycle frequencies, while employed workers’ separation probability is comparative acyclic. This is particularly true... MORE

Why No Oil Shock Effect?

Macroeconomics
Arnold Kling
Olivier Blanchard and Jordi Gali write, Since the 1970s, and at least until recently, macroeconomists have viewed changes in the price of oil as as an important source of economic fluctuations, as well as a paradigm of a global shock,... MORE

Rodrik's Question

Arnold Kling
He asked his readers to say which economists he would like to see blog. The answers tend to skew Harvard and skew left, but not entirely. The most votes went to Joseph Stiglitz (21). He is a great speaker/writer, but... MORE

Where Haidt Falls Short

Political Economy
Arnold Kling
Going back to Will Wilkinson's exposition. Haidt’s research leads him to posit five psychological foundations of human moral sentiment, each with a distinct evolutionary history and function, which he labels harm, reciprocity, ingroup, hierarchy, and purity. While the five foundations... MORE

Confusion About Greenspan

Political Economy
Arnold Kling
Felix Salmon writes, It's not very often that Brad DeLong and Paul Krugman find themselves epitomizing opposite sides of an issue, but DeLong seems to have become Alan Greenspan's apologist in chief even as Krugman sticks the knife in to... MORE

Your PC Experience

Economics of Education
Bryan Caplan
Two last questions on political correctness: 1. What's the worst PC experience you've ever personally had? 2. What's the worst PC experience anyone you personally know has ever had? My answers: 1. My worst experience: Hearing second-hand that a student... MORE

The Haidt Report

Behavioral Economics and Rationality
Arnold Kling
Jonathan Haidt writes The normal person (once animated by emotion) engages in moral reasoning to find ammunition, not truth; the normal person attacks the motives and character of her opponents when it will be advantageous to do so. The scientist,... MORE

I'll Back Down on PC

Economics of Education
Arnold Kling
Not that I agree completely with what Bryan says, but I do admit that I do not wish to join an anti-PC crusade. I think that the real problem is that the academy has been dumbed down. PC is a... MORE

PC and Availability Bias

Economics of Education
Bryan Caplan
I agree with Arnold that Harvard did Larry Summers wrong. In fact, whenever I hear an anecdote about PC run amok, I normally take the side of the whoever gave offense. Nevertheless, I still think the PC threat to higher... MORE

Is Firing the President of Harvard Overblown?

Economics of Education
Arnold Kling
Bryan asks if PC persecution is overblown. I suppose that the term "overblown" can be construed liberally enough (so to speak) to make it impossible to settle the matter. But you might want to re-read this post and consider the... MORE

Ending Aging

Economics of Health Care
Arnold Kling
I promised I would have more to say about Aubrey de Grey's book, and I do that in this essay. At a more subtle level, de Grey wants institutional changes that wrest control of the research agenda from the medical... MORE

Is P.C. Persecution Overblown?

Economics of Education
Bryan Caplan
I just got an invitation to see Indoctrinate U, a documentary on the tyranny of political correctness in higher education. The trailer left me with a furrowed brow. Why? Because in all honesty, I've never been the target of p.c.... MORE

Proposals for Health Care Stasis

Economics of Health Care
Arnold Kling
Now that Hillary Clinton has released her health care plan, it occurs to me that "health care reform" has become an Orwellian term. Her proposal, like those of other Democrats, would take our existing form of health insurance--what I call... MORE

Disorder at the Border

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Philippe Legrain says, Illegal immigrants are not the problem, they are the symptom of the real problem: immigration restrictions that are economically stupid, politically unsustainable and morally wrong. Far from protecting society, immigration controls undermine law and order, just as... MORE

Does the Public Suffer from Anti-Government Bias?

Behavioral Economics and Rationality
Bryan Caplan
One of Donald Wittman's most intriguing claims during last week's debate is that the public suffers not just from an anti-market bias (as I claim), but from an anti-government bias as well. His main argument, if I recall correctly, is... MORE

Pigou Club Excludes Politicians

Energy, Environment, Resources
Arnold Kling
From a Wall Street Journal story: The biggest political battle in Washington over climate change may not pit Democrats against Republicans. Instead, it could be economists versus politicians. Many academics, even conservatives, favor a tax on carbon emissions. Many lawmakers,... MORE

Against Teaching Basic Economic Principles

Economic Education
Arnold Kling
William Becker argues, Any professor of economics can identify the field's traditional basic concepts. The trick is to recognize and articulate the shortcomings of simplistic analysis before students rightly dismiss it as irrelevant and then wrongly dismiss all of economics... MORE

Fogel Compares Health Systems

Economics of Health Care
Arnold Kling
Timothy Taylor's column in the latest Journal of Economic Perspectives points to an interview with Robert Fogel. What we currently call the poverty line is so high that only the top 6 percent or 7 percent of the people who... MORE

Thoughtful Stuff from Steven Pinker

Behavioral Economics and Rationality
Arnold Kling
In The Stuff of Thought, Steven Pinker writes, Morality and causative verbs tap the same mental model of human action... That makes the passive a convenient way to hide the agent of a transitive verb and thus the identity of... MORE

Economics vs. Computer Science

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Nick Schulz writes, The number of new computer science majors today has fallen by half since 2000, according to the Higher Education Research Institute at UCLA. Merrilea Mayo, director of the Government-University-Industry Research Roundtable at the National Academies, says the... MORE

A Signaling Model of Consumer Behavior

Behavioral Economics and Rationality
Arnold Kling
Kerwin Kofi Charles, Erik Hurst, and Nikolai Roussanov write, we show that although, unconditionally, racial minorities and Whites spend approximately the same fraction of their resources on visible consumption, Blacks and Hispanics spend about thirty percent more on visible goods,... MORE

Order and Disorder

Institutional Economics
Arnold Kling
My latest essay: the spontaneous order of the market can adapt to a tax relatively easily. However, when government tries to control supply, disorder emerges. Profit opportunities are created in crime and corruption. Compare the crime and mayhem in the... MORE

The Wittman-Caplan Debate

Politics and Economics
Bryan Caplan
If you attended my debate with Donald Wittman, or wish you could have, here are some additional links, including the full text of my opening statement. I continue to be surprised by how much Wittman has moved away from the... MORE

Thoughts on September 13

Cost-benefit Analysis
Bryan Caplan
Terrorism has been an infinitesimal risk so far, but on September 11, Arnold told us that he's worried nonetheless:I understand that if you look at history, the probability of being killed by a terrorist is low. But if you had... MORE

What American Poverty Debates Look Like to Haitians

Income Distribution
Bryan Caplan
This story from The Onion gets funnier once you realize that - by world standards - the "American poor" are rich. P.S. Here's more economic insight from America's finest news source. HT: Mankiw.... MORE

Doctors as Oracles

Economics of Health Care
Bryan Caplan
From Robin Hanson:Heroic medicine is just too central to our culture, a culture where economists like me have far less authority than doctors. From Rudi Giuliani: Ultimately, a woman should make that [decision whether to get an abortion] with her... MORE

How Contrarian is the Hansonian View of Medicine?

Economics of Health Care
Bryan Caplan
To be honest, when Robin Hanson first told me his views on health care, I thought he was a lone nut. A brilliant lone nut, but a lone nut nonetheless. Still, my conversations with Robin inspired me to grill every... MORE

The Messiness of Economic Analysis

Economic Methods
Arnold Kling
In summing up his reaction to Gregory Clark's book, Tyler Cowen writes, Greg wants an explanation with a Malthusian or a Ricardian rigor and logic. I believe our explanations will be more like those of history than of economics. That... MORE

Cultural Contradictions of LIbertarianism?

Political Economy
Arnold Kling
Kay Hymowitz writes, libertarians depend on the family--an institution that, in crucial respects, is unfree--to produce the sort of people best suited to life in a free-market system (not to mention future members of their own movement). The complex, dynamic... MORE

Moral Psychology

Behavioral Economics and Rationality
Arnold Kling
Jonathan Haidt writes Virtues are socially constructed and socially learned, but these processes are highly prepared and constrained by the evolved mind. We call these three additional foundations the binding foundations, because the virtues, practices, and institutions they generate function... MORE

From Autos to Health Care

Labor Mobility, Immigration, Outsourcing
Arnold Kling
The Wall Street Journal reports, Last year, Ford began offering a buyout package that covers schooling, following an internal 2005 study that showed many of its younger workers would leave if given a chance to attend college. Under this plan,... MORE

Thoughts on September 11

Politics and Economics
Arnold Kling
All of this is off topic as far as economics goes, but this day still reverberates with me. 1. I understand that if you look at history, the probability of being killed by a terrorist is low. But if you... MORE

My Bias About Bias

Economic Philosophy
Arnold Kling
Robin Hanson writes, let me outline an argument for the importance of overcoming bias: 1. Our beliefs have many errors, i.e., deviations from truth. 2. Reducing error is important goal, for which we are willing to pay substantial costs. 3.... MORE

Tyler Cowen Interview

Behavioral Economics and Rationality
Arnold Kling
The inner economist talks with Russ Roberts. He points out that you are unlikely to say "no" to your dentist in person. You have given up control--deep in a chair (he says "strapped"), mouth open, and so on. But after... MORE

Robin Hanson Unbound

Economics of Health Care
Arnold Kling
He writes, Cutting half of medical spending would seem to cost little in health, and yet would free up vast resources for other health and utility gains. To their shame, health experts have not said this loudly and clearly enough.... MORE

Bait-and-Switch: The Myth and the Reformulation

Books: Reviews and Suggested Readings
Bryan Caplan
Mark Smith's The Right Talk: How Conservatives Transformed the Great Society into the Economic Society is full of insight. He crushes the myth of Republican "bait-and-switch" - the idea that Republicans focus on the culture wars during elections to mask... MORE

Villains, Victims, and Economics

Economic Philosophy
Arnold Kling
Tyler Cowen writes, Wherever there are problems, people look for villains. The subprime mortgage crisis is a case in point. ...But financial markets rarely fit into simple moral narratives, and much as these stories may comfort many of us, they... MORE

A Difficult Book

Books: Reviews and Suggested Readings
Arnold Kling
In the foreword to Imperfect Knowledge Economics, by Roman Frydman and Michael D. Goldberg, 2007 Nobel laureate Edmund S. Phelps writes, The authors argue that if we aspire to build models that apply to modern economies--economies whose central functioning is... MORE

Another Reason To Doubt Infant Mortality Data

Economics of Health Care
Arnold Kling
Cheryl Miller writes Prematurity is now the leading cause of infant mortality in the United States, in part due to the “epidemic” of multiple births to IVF patients. Multiples are twenty times more likely to die in the first month... MORE

Should Steven White Brand Himself a "Right-Wing Ideologue"?

Behavioral Economics and Rationality
Bryan Caplan
One of the main reasons Steven White wrote me up as a "right-wing ideologue" is that my work highlights the irrationality of the electorate. But now he's doing it too - and singling out Democrats in the process. Here's White... MORE

Talk About Perverse Incentives

Microeconomics
Bryan Caplan
I hope I'm misunderstanding Ed Glaeser, but I don't think I am:Since the rich should not be subsidized, the transfer payments should be means tested and limited to families earning less than $75,000 per year. There should also be income... MORE

An Important Point Concerning Mortgage Bailouts

Finance: stocks, options, etc.
Arnold Kling
Ed Glaeser writes, A perpetual moratorium on foreclosures, for example, would be a foolish repudiation of the rights of lenders. Who would lend after that precedent? A lot of people want to punish the lenders. So if you follow Dean... MORE

Order, Disorder, and License Requirements

Regulation and Subsidies
Arnold Kling
A reader sent this question: Your post on Prof. Wagner's piece on market order, especially the institutional nature of the order (differences between taxed orders and illegal orders), made me think about the nature of organization within legally established licensed... MORE

Morality is No Smokescreen

Economic Philosophy
Bryan Caplan
Only a handful of people (and I'm not one of them) will be able to comprehend Steve Landsburg's "The Methodology of Normative Economics," but the conclusion is both profound and accessible. Highlight:What evidence is there that people care about the... MORE

Key Labor Market Indicator

Labor Market
Arnold Kling
While the media focus on job creation--a classic case of make-work bias, I remain focused on the five-year average gain in productivity. Based on the revised second quarter figures, this five-year gain was at an average annual rate of 2.4... MORE

Best Comment Thread Ever

Books: Reviews and Suggested Readings
Arnold Kling
I think that Tyler Cowen's first book club experiment has to be counted a success. Check out the comments on the latest post. For example, Gregory Clark, the author of the book under discussion, writes, As I thought about it... MORE

Morning Reading and Reactions

Political Economy
Arnold Kling
We'll start with good news, and move down. Greg Mankiw (among others) links to a profile of Robert Barro. The main result of Barro's other hit paper on economic growth—a 1992 article in the Journal of Political Economy, coauthored with... MORE

What I'm Reading

Books: Reviews and Suggested Readings
Arnold Kling
I just finished Aubrey de Grey's Ending Aging. I think that anyone who likes reading science books for pleasure would enjoy it. I'll have more to say later. I'm about halfway through Supercrunchers by Ian Ayres. It's about the rise... MORE

Guilty as Charged

Behavioral Economics and Rationality
Bryan Caplan
I've long enjoyed negative-but-fair reviews of my work, but this negative-but-fair review of me personally is even better:This George Mason economist favors free market biases over legitimate democracy, and has more ears in Washington than you might think.Given the number... MORE

Judge This Magazine By Its Cover

Behavioral Economics and Rationality
Bryan Caplan
I wrote the cover story for the latest issue of Reason. And once again, I've been blessed with a fantastic cover artist. Here it is: Pay close attention to the t-shirts. Left-to-right: anti-market bias, anti-foreign bias, make-work bias, and pessimistic... MORE

My Mortgage Plan, Continued

Finance: stocks, options, etc.
Arnold Kling
My latest essay elaborates on my debt-equity swap idea. The swap is in some ways a compromise between two other mortgage relief plans. Dean Baker would have homeowners give up all of their equity and become renters. Steven Pearlstein would... MORE

Two Stories of House Prices

Finance: stocks, options, etc.
Arnold Kling
Robert Shiller tells a bubble story. Real rent has been extremely stable when compared with price. Real rent increased only 4 % from the 1996-IV to 2006-I. The rent figures indicate that there has been virtually no change in the... MORE

Order and Disorder

Price Controls
Arnold Kling
Richard E. Wagner writes, There is an equivalence between a tariff and a quota as these are drawn on the blackboard...They are not, however, equivalent in practice. A tariff and a quota generally involve different institutional frameworks...With the quota, the... MORE

Learn Social Science at the Grocery Checkout

Economics and Culture
Bryan Caplan
Another Baumeister gem:One test of what’s meaningfully real is the marketplace. It’s hard to find anybody making money out of gender differences in abilities. But in motivation, there are plenty. Look at the magazine industry: men’s magazines cover different stuff... MORE

Understanding Gender

Economics and Culture
Bryan Caplan
If you read nothing else about gender this year, read "Is There Anything Good About Men?" by Roy Baumeister. It's wonderful from beginning to end. Highlights:When I say I am researching how culture exploits men, the first reaction is usually... MORE

Public Opinion About the Future of Science: A Glimmer of Hope

Behavioral Economics and Rationality
Bryan Caplan
A fun survey, with funny results:[R]espondents were asked in a 1998 Newsweek poll: “In the next century, which one of the following current scientific beliefs do you think is most likely to be proved wrong, the theory of evolution, that... MORE

Last week, I posed the question "Why don't Hispanics beg in America?" - and inspired this poignant essay by Venezuelan writer Ibsen Martinez:The emigrant is not only fleeing poverty. By deciding to leave his country he is fending off faulty... MORE

How Much Cash Is In Your Wallet? Why?

Microeconomics
Bryan Caplan
At a recent GMU lunch, two economists sparred over the optimal quantity of cash to keep in one's wallet. Economist A holds very little cash, on the grounds that you can pay for virtually everything with credit cards. Economist B... MORE

Morning Reading

Behavioral Economics and Rationality
Arnold Kling
The Washington Post reports, The conventional response to myths and urban legends is to counter bad information with accurate information. But the new psychological studies show that denials and clarifications, for all their intuitive appeal, can paradoxically contribute to the... MORE

An Answer For Arnold

Economic Education
Bryan Caplan
Arnold asks:OK, so Bryan's latest book is on stupid voters. One solution is to educate them. But his next to-be-written book, on education, says that education is merely a signal of ability. The data on GRE scores arguably validates that.... MORE

James Hamilton at a Fed Conference

Macroeconomics
Arnold Kling
At Econbrowser, James Hamilton has many interesting posts from the annual Fed conference at Jackson Hole, where the housing kerfluffle drew a lot of attention. In one post, he writes, But if it were the case that all these institutional... MORE

A Question for Bryan

Economic Education
Arnold Kling
Reader Randall Parker called my attention to Steve Sailer's post on GRE scores by intended field of study. The scores are on verbal reasoning and math. Generally speaking, if an intended field of study draws people with higher verbal reasoning... MORE

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