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April 2015

A Monthly Archive (63 entries)

Christina Hoff Sommers at Georgetown

Labor Market
David Henderson
There's even a term for what caused me, someone who is notoriously impatient while watching long videos, to watch an hour-plus video of a speech by feminist Christina Hoff Sommers at Georgetown. It's called the "Streisand effect." Most of the... MORE

Robots, committees, or markets?

Monetary Policy
Scott Sumner
Ben Bernanke has a good post on the Taylor Rule. Let's start at the end, where he argues in favor of decision-making by the FOMC, rather than a rigid mechanical policy rule: Monetary policy should be systematic, not automatic. The... MORE

Kahneman and Renshon on Hawkish Biases

Behavioral Economics and Rationality
Bryan Caplan
Kahneman and Renshon's chapter on "Hawkish Biases" (Thrall and Cramer, eds., American Foreign Policy and The Politics of Fear: Threat Inflation Since 9/11, 2009) is a big improvement over their Foreign Affairs piece on "Why Hawks Win."  Highlights include...The role... MORE

Dean Baker on Something "All Economists Agree On"

International Trade
David Henderson
Dean Baker has a post in which he expresses skepticism about fast-track authority for the Trans-Pacific Partnership (TPP) and the Trans-Atlantic Trade and Investment Pact (TTIP). He argues that the deals are not mainly about free trade. Paul Krugman argued... MORE

Meritocracy Bleg

Labor Mobility, Immigration, Outsourcing
Bryan Caplan
If every worker were paid exactly proportional to their actual productivity - if neither statistical discrimination nor fairness played any role in the job market - how much would the standard deviation of labor earnings increase?HT: Garett Jones... MORE

The problem with "shocks"

Macroeconomics
Scott Sumner
I recently presented a paper discussing how economists think about the "stance" of monetary policy. That is, what do economists mean by terms like "easy money" and "tight money"? It turns out that the entire subject is just a big... MORE

In an op-ed for the Financial Times, former EU Competition Commissioner Mario Monti took the opportunity of the antitrust probe into Google to characterize antitrust as "a policy made in Brussels that works." Putting aside any consideration of the Google... MORE

School Networking Bleg

Economics and Culture
Bryan Caplan
Questions for everyone:1. How many people you met in K-12 are you still friends with?2. How many people you met in K-12 do you professionally interact with?Questions for college attendees:3. How many people you met in college are you still... MORE

Boudreaux on Theorizing about Facts

Economic Methods
David Henderson
"[M]uch of today's empirical work on the effects of minimum-wage legislation is in fact highly theoretical." --Don Boudreaux "The data never speak for themselves." --W. Allen Wallis, the statistician and economist who was pals and colleagues with Milton Friedman, George... MORE

Return to Dorms Bleg

Economics of Education
Bryan Caplan
Does anyone claim that living on-campus increases the return to education?  Nothing turned up on a quick look at Google Scholar.... MORE

Educational Signaling: A Fad Whose Time Has Come

Behavioral Economics and Rationality
Bryan Caplan
Noah Smith, writing for Bloomberg view, isn't happy with the educational signaling "fad."  Here's my point-by-point reply.  Noah's in blockquotes, I'm not.Talk to economists, and you'll find a large number who believe that college -- that defining institution of America's... MORE

The Friedmans and Joseph Schumpeter on Economic Progress

Growth: Consequences
David Henderson
My review of Alex Epstein's The Moral Case for Fossil Fuels has been accepted by Regulation magazine and will be published in the Summer issue. In my review I quote Epstein quoting a passage from Milton and Rose Friedman's Free... MORE

EconTalk Extra

Finance
Scott Sumner
I'd like to make readers aware of a site called EconTalk Extra. There is a very good recent post by Amy Willis discussing my EconTalk conversation with Russ Roberts. Unfortunately I didn't respond to comments until this morning, as I... MORE

At 13, he [Roland Fryer] forged his birth certificate to get a job at McDonald's. When he could, he told me, he stole from the cash register. He sold counterfeit Dooney & Burke purses out of the trunk of his... MORE

Mankiw on Free Trade in the NYT

Behavioral Economics and Rationality
Bryan Caplan
Don't miss the noble Mankiw's latest New York Times op-ed, which would be great even if it wasn't great publicity for me...... MORE

Optimal mutual funds in a world of bubbles

Efficient Markets Hypothesis
Scott Sumner
One argument in favor of the Efficient Markets Hypothesis is that if bubbles existed, it should be possible to make large excess returns by betting on an eventual collapse of the bubble. And the famous counterargument often made is that:... MORE

My Review of Barbara Bergmann, Part 3

Labor Market
David Henderson
This is the last installment of my 1987 review of Barbara Bergmann's book The Economic Emergence of Women. For the previous two installments, see here and here. Bergman favors some policies that restrict opportunities for women. For example, she seems... MORE

My Review of Barbara Bergmann, Part 2

Labor Market
David Henderson
Yesterday, I posted the first part of my 1987 review of the late Barbara Bergmann's book The Economic Emergence of Women. Here's the next part: To combat discrimination against women, Bergmann would have the government step up its enforcement of... MORE

The Mellow Heuristic

Behavioral Economics and Rationality
Bryan Caplan
No one protested me when I spoke at Oberlin College last week.  (Topic: The Myth of the Rational Voter).  A few days later, however, Oberlin showed factual feminist Christina Hoff Sommers a rather different face:The entrance to the classroom where... MORE

It's not a beauty pageant

Efficient Markets Hypothesis
Scott Sumner
Over at TheMoneyIllusion I received the following comment: Macro trading is not about getting it right, it is about getting what others think is right. And that can be almost anything ... That reminded me of Keynes's famous claim that... MORE

Thank You for Correcting Me, Matthew Baker

Economic Methods
Bryan Caplan
EconLog reader Matthew Baker has detected an error in my spreadsheets on the social return to education.  Fortunately, the mistake - a miscalculation of crime risk for the elderly - is so small that none of the main results change... MORE

My Review of Barbara Bergmann

Labor Market
David Henderson
While I was heading to the APEE conference in Cancun, I learned that economist Barbara Bergmann had died. I reviewed her book The Economic Emergence of Women in Fortune on March 2, 1987. Here are some excerpts from my review:... MORE

Education and Apostasy

Economics and Culture
Bryan Caplan
Intriguing and eloquent words from Uecker, Regnerus, and Vaaler ("Losing My Religion," Social Forces 2007):Sociologists of religion have long linked educational attainment to religious decline (Caplovitz and Sherrow 1977; Hadaway and Roof 1988; Hunter 1983; Sherkat 1998). But the assumption... MORE

Bernanke and Poole on Secular Stagnation

Growth: Causal Factors
David Henderson
Note: The reason for my dearth of blog posts lately is the troubles I've had with my 6-year-old Mac. I now have a new one and all is well. Fingers crossed. Does the U.S. economy face secular stagnation? I am... MORE

Where Are the Pro-Life Utilitarians?

Economic Philosophy
Bryan Caplan
Pro-life utilitarians are very scarce.  A philosophy professor recently told me that he knows of zero pro-life utilitarians in the entire philosophy profession.  This is deeply puzzling.  While I'm not a utilitarian, the utilitarian case against abortion seems very strong. ... MORE

I recently received this request in a comment section: Slightly off-topic, but Scott you would *love* an idea which is becoming more widespread here in the UK, that the housing shortage here is being caused by "artificially low interest rates".... MORE

Google and the EU foreign policy

Eurozone crisis
Alberto Mingardi
The European Commission is opening an investigation on Google, for alleged anti-competitive practices. The EC is concerned that "the company has given an unfair advantage to its own comparison shopping service, in breach of EU antitrust rules". Wayne Crews has... MORE

Are Centers a Mistake?

Economics and Culture
Bryan Caplan
Suppose you want to convert the world to belief X.  You decide that professors are the best spokesmen for X.  There are ten universities, and you have enough money to fund ten professors.  There are two possible ways to spend... MORE

Substitute goods and reasoning from a price change

Economic Education
Scott Sumner
David Henderson has a good post on the way that textbooks teach the substitution effect. I have one other bone to pick with principles textbooks---they don't clearly explain to students how to avoid "reasoning from a price change." Start with... MORE

Mankiw's Textbook on Determinants of Demand Elasticity

Economic Education
David Henderson
In the Energy Economics course I'm teaching this quarter, I have a number of students who have never had economics before. So I'm using selected chapters from the Microeconomics portion of Greg Mankiw's Principles of Economics, and I add a... MORE

Did the Fed cause the sub-prime boom?

Monetary Policy
Scott Sumner
George Selgin has a new post discussing a paper he wrote with David Beckworth and Berrak Bahadir. In the paper they argue that the Fed set its policy rate too low during the early 2000s, and that this decision contributed... MORE

Substitution in Nicotine Consumption

Competition
David Henderson
Yesterday's electronic New York Times and today's print edition carries the news story "Use of E-Cigarettes Rises Sharply Among Teenagers, Report Says" by Sabrina Tavernise. It's actually very good. Indeed, it reminds me of some of the best of the... MORE

Over at TheMoneyIllusion I have a long post discussing Ben Bernanke's recent comments on monetary reform. There is one issue that seems especially important, and I wanted to devote an entire post to the subject. Here's Bernanke: I want to... MORE

Is Ciudadanos a hope for Spain?

Eurozone crisis
Alberto Mingardi
With the UK and Spain going to the ballot box in the next few months, European politics is certainly more than Greece, at the moment. We know that the polls are rather foggy about England, but Spanish politics risks becoming... MORE

Is the Fed allowed to create GDP prediction markets?

Central Planning vs. Local Knowledge
Scott Sumner
In the comment section of a recent blog post, David Andolfatto asked the following question: Scott, Does it fall within the Fed's present Congressional mandate to create markets in the instruments you want? (I honestly don't know. If we do,... MORE

The earliest 20th-century reference I have been able to find to a Laffer curve effect is in a 1901 article by London School of Economics professor Edwin Cannan. While conceding that a 100 percent tax rate on amounts earned that... MORE

The wrong way to fix Social Security

Taxation
Scott Sumner
Governor Chris Christie wants to reduce Social Security benefits for the rich: As part of the plan, he'll propose phasing out Social Security payments for those making more than $80,000 in other income and eliminating them for those making $200,000... MORE

The Libertarian Target

Behavioral Economics and Rationality
Bryan Caplan
Libertarianism has a wealth of prominent, persistent opponents, starting with Paul Krugman and Salon.  Who precisely are they criticizing?  Probably not the 9-14% of Americans who are economically conservative but socially liberal.  No, the critics target self-conscious libertarians - people... MORE

There is no sticky wage puzzle

Labor Market
Scott Sumner
Most people find the NGDP shock/sticky wage theory of the business cycle to be at least slightly plausible. However I'm often asked why wages have not adjusted yet. Surely it doesn't take 7 years for full adjustment to a negative... MORE

Don't blame the workers

Labor Market
Scott Sumner
A popular Keynesian theory of recessions is that nominal wages are sticky, and hence reductions in aggregate demand lead to high unemployment. They often go on to advocate more government spending to put people back to work. Free market economists... MORE

Everything's Amazing and I'm Happy!

Business Economics
David Henderson
Did I ever optimize in using one of my last "free" passes to the United Red Carpet Club in LAX! I flew down from Monterey to LAX early this morning, with a 3-hour gap between flights. That made it reasonable... MORE

The Public Choice Behind Carbon Taxes

Public Choice Theory
David Henderson
Jerry Taylor of the Niskanen Center, who co-authored an excellent piece, "Energy," in The Concise Encyclopedia of Economics, has a post titled "Oil and Gas Industry Opinions about Climate Change." He writes: My colleague Sarah Hunt pointed out yesterday that... MORE

Krugman versus the Audit Heuristic

Economic Philosophy
Bryan Caplan
My two favorite liberals have repeatedly told me, "Paul Krugman is right about virtually everything."  When my favorite liberals praise Krugman's position about a topic I don't thoroughly understand, I hold my tongue.  Recently, though, Krugman staked out strong positions... MORE

I was too busy on April 1 to post an April Fool's Day entry. This isn't one. But my use of the word "insightful" in the title is meant to be ironic. A few days ago, Paul Krugman posted that... MORE

Will the EU help Uber?

Competition
Alberto Mingardi
The Financial Times reports that the European Commission is planning an in-depth study into the European taxi market, most likely to find a way out to the Uber dead end in which quite a few member-states are finding themselves. Opposition... MORE

Finished Kevin Carey's The End of College.  My verdict: Wrong but beautiful.  Wrong, because brick-and-mortar college isn't "ending" in our lifetimes.  Beautiful, because Carey makes us stop taking online education for granted, and feel the awe this historic achievement deserves.I've... MORE

Ed Dolan on ShadowStats

Macroeconomics
David Henderson
It is hard to think of a website so loved by its followers and so scorned by economists as John Williams' ShadowStats, a widely cited source of alternative economic data on inflation and other economic indicators. So begins economist Ed... MORE

A few weeks ago I criticized a Robert Shiller claim that economic theory tells us that low interest rates should lead to more investment. That's an EC101 level error, reasoning from a price change. Unfortunately, I see this all the... MORE

How Econ Melts Your Brain

Behavioral Economics and Rationality
Bryan Caplan
Learning economics changes your life and improves your mind.  As Dilbert creator Scott Adams insightfully observes, "When you have a working knowledge of economics, it's like having a mild super power."  Yet when grading economics exams, I often notice a... MORE

Ben Bernanke has a very good post on the topic of using monetary policy to stabilize asset markets, with the ultimate goal being greater financial stability. I have a post over at MoneyIllusion that comments on his post, but here... MORE

I Am NOT Charlie Hebdo

Economic Philosophy
David Henderson
After the horrible murders of workers at the French newspaper Charlie Hebdo in January, it became chic for a few weeks to wear buttons saying "I am Charlie Hebdo." I thought that was a mistake then and I almost wrote... MORE

The Outsider Advantage

Behavioral Economics and Rationality
Bryan Caplan
"Judean People's Front?!  We're the People's Front of Judea!"                      -The Life of Brian"Ned, have you considered any of the other major religions? They're all pretty much the same."                      -Reverend Lovejoy, The SimpsonsIntellectually speaking, how far apart are each of the... MORE

Basketball Team Composition and Relative Prices

Microeconomics
David Henderson
I've been too busy to watch much of the NCAA March/April madness, but I started watching the final game tonight. When I realized that it's a private school (Duke) vs. a government school (U. of Wisconsin), I made a prediction.... MORE

The Real Teaching Moment in Brian Williams's "False Memory"

Behavioral Economics and Rationality
David Henderson
Memory experts have argued that NBC News anchor Brian Williams' dramatic fall from grace provides a wonderful "teaching moment" to alert the public about research findings on how flawed human memories are. These experts also intimate that their research suggests... MORE

For Freedom of Association

Business Economics
David Henderson
There has been a lot of controversy lately about Indiana's religious freedom law. There's a simple solution to the problems that the law deals with: freedom of association. I don't claim here to understand all the ins and outs of... MORE

Germany is "balanced", it's the rest of Europe (and the ECB) that are unbalanced

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
In economic theory, there is no particular reason why countries should have "balanced" current accounts. No one cares that California's current account with the rest of the US is usually unbalanced, and often by a sizable amount. Nor should they... MORE

Google's Gamble

Competition
David Henderson
Before getting to today's post, two things: 1. Thanks to all the commenters whom I didn't thank individually for their congratulations on my becoming a Full Professor. As one of my former students said on Facebook, he's glad that I'm... MORE

The Great Recession has exposed the fact that many economists believe things that just aren't so. They believe that low interest rates suggest that money is easy. They believe that monetary stimulus is ineffective at the zero bound. And recently... MORE

Why is House of Cards more popular than Yes Minister?

Economics and Culture
Alberto Mingardi
The short answer to the question is: because it is a Netflix production with Kevin Spacey and the absolutely wonderful Robin Wright. But yet, let's assume there's more to that. "House of Cards" and "Yes Minister" are two interesting contributions... MORE

In the United States, the well-educated are more socially liberal and economically conservative.  In absolute terms, they're statist, but they're nevertheless relatively libertarian.  (See my notes for an intro, and Althaus for broader discussion).  Question: How does this pattern hold... MORE

Are We Stuck With the Great Society?

Economic Philosophy
Bryan Caplan
A few months ago, Northwood University invited me to speak on, "Are we stuck with the Great Society?"  This would probably sound like a strange topic to most Americans.  To ask, "Are we stuck with Disneyland?," presupposes that Disneyland is... MORE

Michael Darda pointed me to the following statement from Larry Summers (in reply to Ben Bernanke): Successful policy approaches to a global tendency towards excess saving and stagnation will involve not only stimulating public and private investment but will also... MORE

The socialism of the Incas

Book Club
Alberto Mingardi
Before the Mont Pelerin Society's meeting in Lima, Peru, beautifully organized by Enrique Ghersi, I took three days off and visited Cuzco and Machu Picchu. As a matter of fact, I highly recommend the trip--though I'd suggest you take more... MORE

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