EconLog small logo

July 2015

A Monthly Archive (75 entries)

Another referendum for Mr Tsipras

Eurozone crisis
Alberto Mingardi
On July 5th, the Greek Prime Minister Alexis Tsipras polled his fellow citizen in a referendum on "austerity" and the then-available European deal. Since he has since subscribed to a more "austere" deal, Tsipras now has problems with his own... MORE

The government just announced revised real GDP figures for the past few years, showing even lower growth than previously estimated. I am traveling now so I'm going to estimate these growth rates w/o a calculator. Please correct me if I... MORE

Biography of Edmund Phelps

Growth: Causal Factors
David Henderson
In The Concise Encyclopedia of Economics, I have bios of all of the winners of the Nobel Prize in economics through 2004, technically the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. But there have been a... MORE

Nuclear Iran Bet Update

Behavioral Economics and Rationality
Bryan Caplan
John Podhoretz engaged my proposed nuclear Iran bet on Twitter.  Highlights of the exchange:@bryan_caplan I'll bet you but why such long odds?-- John Podhoretz (@jpodhoretz) July 28, 2015 .@jpodhoretz I propose long odds because you claim very high confidence ("effectively... MORE

Predicting failure

Monetary Policy
Scott Sumner
Lars Svensson has argued that the Fed should "target the forecast", which means they should adjust policy so that their predicted outcome is also their targeted outcome. Information accidentally leaked by the Fed indicates that they are not doing this,... MORE

Nuclear Iran Bet

Behavioral Economics and Rationality
Bryan Caplan
John Podhoretz:The United States and its allies have struck a deal with Iran that effectively ensures that it will be a nuclear state with ballistic missiles in 10 years, assuming Iran adheres to the deal's terms, which is a very... MORE

McArdle (and the Pope) on air conditioning

Books: Reviews and Suggested Readings
Alberto Mingardi
Megan McArdle has a most enjoyable piece on air conditioning. It is true that when we Europeans are traveling, sometimes it is more difficult to "adjust" to air conditioning than to the time zone. We have the impression that Americans... MORE

Party in the Street: A Tale of Three Movements

Politics and Economics
Bryan Caplan
Heaney and Rojas close Party in the Street by comparing the antiwar movement to the Tea Party and Occupy Wall Street.  This naturally required even more original data collection.  What they found:[T]he antiwar-Democratic relationship is an intermediate case among these... MORE

Race and progressivism

Politics and Economics
Scott Sumner
Pat Buchanan used to complain about imports from Asian and Hispanic economies, but was strangely silent about our large trade deficits with mostly white northern Europe. Donald Trump makes similar complaints. Now Kevin Williamson says that Bernie Sanders likes to... MORE

Finishing an Econ Ph.D.: The Basic Facts

Economic Education
Bryan Caplan
If aspiring econ Ph.D.s are going to read one article about their prospects for academic success, Stock, Siegfried, and Finegan's "Completion Rates and Time-to-Degree in Economics PhD Programs" (American Economic Review, 2011) is probably the single best piece to read. ... MORE

Krugman on Greece

Cross-country Comparisons
David Henderson
Athens, we have a problem. I missed seeing Paul Krugman on Fareed Zakaria's show on CNN on July 19. The transcript is worth looking at, not because it's that informative about Greece but because it's informative about how--and how carefully--Krugman... MORE

Good for Jared Bernstein

Taxation
David Henderson
Those who know me well know how much I like civility in debate. And, beyond civility, I like even more when people on one side of an issue will grant a point made by someone on another side of an... MORE

What You Mean "We", Scott Alexander?

Labor Market
David Henderson
My co-blogger Bryan Caplan, as well as many other bloggers and friends, have recommended Scott Alexander's (that's not his real name) blog, slatestarcodex. I have had it on my feed for a number of months now and, like them, find... MORE

Re-regulation in the UK

Energy, Environment, Resources
Alberto Mingardi
For quite a while, the British electricity market (in itself, an interesting case of successful liberalisation) has been the object of a campaign aiming at its re-regulation. Now it is the turn of the British Competition & Markets Authority (the... MORE

I highly recommend this. Warning: some language.... MORE

Abigail Hall's Case Against Supporting Politicians

Public Choice Theory
David Henderson
In a blog post yesterday, "Standing with Rand? Maybe Take a Seat," Independent Institute Research Fellow and recent George Mason University Ph.D. Abigail Hall makes a case against supporting Rand Paul, but then generalizes and makes it a case against... MORE

Law School: No News Is Bad News

Behavioral Economics and Rationality
Bryan Caplan
Common sense from Campos' Don't Go to Law School (Unless):You can find a version of each school's employment statistics on the ABA's website. In addition, a school should have even more detailed employment and salary numbers for its most recent... MORE

Some Practical Advice

Behavioral Economics and Rationality
David Henderson
Play the Hand You're Dealt One of the things I do around the margins with my students--it's not part of the curriculum--is give them my "words of wisdom" about dealing in the world. A lot of it has to do... MORE

Sadie Hawkins Rant

Behavioral Economics and Rationality
Bryan Caplan
Wikipedia:[T]he practical basis of Sadie Hawkins Day is one of simple gender role-reversal. Women and girls take the bold initiative by inviting the man or boy of their choice out on a date--almost unheard of before 1937--typically to a dance... MORE

Paul Krugman on the minimum wage

Labor Market
Scott Sumner
Paul Krugman recently had this to say on the minimum wage: Until the Card-Krueger study, most economists, myself included, assumed that raising the minimum wage would have a clear negative effect on employment. But they found, if anything, a positive... MORE

Econlib in Top Three!

Economic Education
David Henderson
We have just learned that businesseconomics.com has listed Econlib as one of the top three sites for Economic Education in 2015. I agree. :-) The announcement is here. An excerpt: We are delighted to publish the award winners for 2015.... MORE

My Enthusiastic Support for Open Borders

Economic Philosophy
Bryan Caplan
Delighted to see Noah Smith introduce Bloomberg readers to the case for open borders.  Two reactions:1. When Noah describes the economic benefits of immigration, he makes it sound redistributive: Our GDP goes up because we gained people, which presumably means... MORE

What's Wrong With Law Professors

Economics of Education
Bryan Caplan
From Paul Campos' Don't Go to Law School (Unless):It's not merely that it's common for a law professor to have never tried a case, or negotiated a deal, or drafted a real-life version of the sorts of documents he's discussing... MORE

Quick answer: No. Jared Bernstein, of the Center on Budget and Policy Priorities, writes: By significantly increasing the salary threshold below which salaried workers get overtime pay, President Obama just took a big step toward updating a critical labor standard... MORE

Is an Unused J.D. a Negative Signal?

Economics of Education
Bryan Caplan
Paul Campos' Don't Go to Law School (Unless) is one of the most powerful polemics I've ever read.  It uses no statistics more advanced than conditional averages, and provides few scholarly references of any kind.  But the author, a law... MORE

The Merits of Cochrane's Case

Growth: Causal Factors
David Henderson
I posted this last weekend about an important history of thought mistake in a recent John Cochrane post. Although I said that his post was "otherwise excellent," I didn't elaborate. Now I do. John made the case, contra Noah Smith,... MORE

Testing Unflattering Claims About Human Motivation

Behavioral Economics and Rationality
Bryan Caplan
"Democrats resent the rich."  "Republicans disdain the poor."  When accusations like this fly, the accused tend to be coldly condescending.  "If you knew a single Democrat/Republican/whatever well, you'd know how ignorant your claim is."Personally, I believe that 80% of everyone's... MORE

Resentment, Information, and Unemployment

Behavioral Economics and Rationality
Bryan Caplan
There's one main problem with Tyler's post on the unemployment of the poor.  He writes:Perhaps low-skilled workers cannot be employed at lower wages because their resentment at the low wage would be so high that they would impose unacceptable morale... MORE

My Private-Sector Complaint

Business Economics
David Henderson
I agree with virtually everything in co-blogger Scott Sumner's complaint about, and analysis of, the government sector. I did a Krugman about the DMV a year ago and the evidence people presented in the comments caused me to cry uncle... MORE

Paul Krugman doesn't understand why people think government is bad: Why, exactly, are these public functions unquestioned bywords for "something bad"? Maybe I'm living a sheltered life here in central New Jersey, but I don't find the Post Office a... MORE

The Origins of the Dismal Science

Economic History
David Henderson
How the Dismal Science Got Its Name In an otherwise excellent post responding to Noah Smith about economic growth, my Hoover colleague and friend John Cochrane makes a mistake in the history of economic thought. John writes: They do not... MORE

Obama on the Symmetry of Rape

Economics of Education
David Henderson
At his press conference two days ago, President Obama said: If you give a woman, or a man, for that matter, without his or her knowledge, a drug and then have sex with that person without consent, that's rape, and... MORE

People tend to be overconfident in their views. They are overconfident about their political views, their religious views, their views on global warming, even their views on sports. That's just human nature. And people are especially overconfident about their understanding... MORE

You Grew Up in Poverty? Okay, Here's Some Money

Economic Philosophy
Bryan Caplan
A modest proposal for fans of social justice: Have the government give money to adults who grew up in poverty.The goal of the program, of course, is to (a) help people who are statistically likely to be poor, and (b)... MORE

My Response to Donald Trump

International Trade
David Henderson
Many of my libertarian and conservative allies have attacked Donald Trump viciously. Some comment on his hair style, others comment on the self-promotion aspect of his speaking style. One young libertarian friend, whom I think quite highly of, I might... MORE

Weak currencies don't cause trade surpluses

International Macroeconomics: Exchange Rates, International Debt, etc.
Scott Sumner
I'm seeing a lot of people claiming that Germany benefits from the euro's impact on its trade balance. The argument seems to be that the euro is weaker than the Deutschmark would be, and that this explains Germany's big trade... MORE

What's Wrong With the U.S. Peace Movement

Behavioral Economics and Rationality
Bryan Caplan
I'm a pacifist, but I've never been intellectually impressed with the U.S. peace movement.  The sound argument against war, in my view, combines (a) the common-sense moral view that, "You shouldn't kill innocent people unless you know with high certainty... MORE

Party in the Street and the Party in Their Heads

Economic History
Bryan Caplan
Michael Heaney and Fabio Rojas' new Party in the Street: The Antiwar Movement and the Democratic Party After 9/11 (Cambridge University Press, 2015) is packed with wide-ranging insight.  The data collection alone inspires awe: The authors surveyed practically every major... MORE

Rashomon at the Financial Times

Eurozone crisis
Scott Sumner
A crime has been committed in Brussels. But who is the victim? Gideon Rachman of the Financial Times says Germany is the victim: Europe woke up on Monday to a lot of headlines about the humiliation of Greece, the triumph... MORE

Anthropology Versus Commodification

Behavioral Economics and Rationality
Bryan Caplan
A gripping excerpt from Brennan and Jaworski's new book on the philosophy of commodification:...we present a range of sociological and anthropological evidence that there is no essential meaning to money or market exchange. Instead, the meaning of money is a... MORE

Change My View: A Data Opportunity?

Economic Methods
Bryan Caplan
EconLog reader Peter Hurley sent me some interesting information on testing the efficacy of debate strategies.  Reprinted with Peter's permission: Hey Prof. Caplan, I have been reading your recent posts on econlog about the lack of research on debating tactics,... MORE

Warsh on Friedman versus Samuelson

Economic History
David Henderson
Biography is no substitute for history, much less for theory and history of thought, and journalism is, at best, only a provisional substitute for biography. But one way of understanding what happened in economics in the twentieth century is to... MORE

Paul Krugman on Greece and Germany

Eurozone crisis
Scott Sumner
The Syriza Party took power in January of this year, and immediately began to issue one inflammatory statement after another, demanding an end to the troika's austerity program. American bloggers were divided on the effectiveness of the Syriza strategy, with... MORE

David on Debate

Behavioral Economics and Rationality
Bryan Caplan
Thank you, David, for your thoughts on debate.  My reply:1. David adds a principle to my list:Admit when you're wrong. Or, even if the person on the other side hasn't convinced you that you're wrong, but has made you have... MORE

Return to the Caplan-Somin Foreign Policy Debate

Cost-benefit Analysis
Bryan Caplan
While preparing for the Cato intern debate training, I realized that the sound file of the 2011 Caplan-Somin foreign policy debate wasn't working.  Thanks to Ilya Somin and Nathaniel Bechhofer, the file is once again available in .mp3 format.  Enjoy!P.S.... MORE

Thoughts on Debate

Competition
David Henderson
I strongly agree with almost everything that co-blogger Bryan Caplan wrote about debate. I do want to add a couple of things he didn't say. One of them slightly contradicts one of Bryan's pieces of advice. Here's the one that... MORE

Why is Greece such an economic success?

Cross-country Comparisons
Scott Sumner
Greece is widely viewed as an economic basket case. This recent article in the Financial Times discusses some fanciful proposals to fix the Greek economy. I don't doubt that Greece has performed poorly in recent years, but in one little... MORE

Hayek made simple

Book Club
Alberto Mingardi
Don Boudreaux has an excellent new little book, "The Essential Hayek". It is a remarkable work in a number of ways. Boudreaux and the publisher--the Vancouver-based Fraser Institute--are leveraging the Internet to make Hayek's work accessible to a wider audience.... MORE

Friday Evening Audio: Detective Radio

Income Distribution
David Henderson
A Ph.D. economics student named Garrett M. Petersen interviewed me last week about inequality. He has done a series of interviews with economists on various topics and Garrett comes prepared. His questions and the thoughtfulness behind them are head and... MORE

Debate Training: Deserve to Win

Economics and Culture
Bryan Caplan
[UPDATE: Broken link to my presentation fixed.]The annual Cato-Heritage intern debate on Libertarianism versus Conservatism is scheduled for July 23, 2015.  Today I visited Cato to provide debate training, so yesterday I had to figure out what I actually know... MORE

We're Number 44! We're Number 44!

Fiscal Policy
David Henderson
I've been looking at the pictures on the Mercatus web site for a study titled "Ranking the States by Fiscal Condition." It's by Mercatus Center senior research fellow Eileen Norcross and was released two days ago. Just aesthetically, the pictures... MORE

In talking to other economists I often hear concerns that NGDP targeting could occasionally lead to excessive inflation. Oddly, I don't hear the opposite complaint, although there would be just as many periods of below average inflation as above average... MORE

MSNBC Host Admits We Didn't Have Laissez-Faire

Economic History
David Henderson
Do you remember during the financial crisis when various commentators on the left were saying that Ronald Reagan had brought in an era of almost laissez-faire? In an April 13, 2008 article in the New York Times, for example, Peter... MORE

Posner Contra Polygamy

Family Economics
Bryan Caplan
Like the creators of Big Love, I've long seen strong parallels between gay marriage and polygamy.  After last weeks' decision, some prominent pundits said the same.  But legendary Law and Economics scholar Richard Posner rejects the analogy:[L]ater in his opinion... MORE

Krugman on Canada's Austerity

Fiscal Policy
David Henderson
Two days ago, I complimented Paul Krugman for a short blog post he did. Today he came about as close as he ever does to returning the compliment, which is to say, not close at all. But at least he... MORE

Debate Bleg

Economics and Culture
Bryan Caplan
I'm looking for quantitative research on the effectiveness of various debating strategies and styles.  Nothing good readily googles.  Tips?... MORE

A Question for Juris Doctors

Economics of Education
Bryan Caplan
About half of J.D.s don't work as lawyers.  But this doesn't mean their legal educations were bad financial investments.  Law degrees might open doors to desirable careers outside the law, most obviously via signaling.  Soon after my wife finished law... MORE

This report in the Financial Times caught my attention: George Osborne has delivered Britain's first radical Tory Budget for nearly 20 years, announcing huge welfare cuts offset by a higher minimum wage in a bid to create a "high wage,... MORE

Two concepts of "austerity"

Economics and Culture
Alberto Mingardi
On "Spiked" (a must-read on line magazine), Brendan O'Neill has written a powerful and most courageous article on the word "austerity" and how it creates confusion (for an egregious example, see Mark Blyth's book on the subject). O'Neill points out... MORE

Henderson on the 1990s Budget Cuts

Fiscal Policy
David Henderson
My latest Mercatus study, "U.S. Federal Budget Restraint in the 1990s: A Success Story," was published last week. In it, I detail how, in a bipartisan way, Congress and the President cut government spending substantially as a percent of GDP... MORE

Escobar's Dilemma

Behavioral Economics and Rationality
Bryan Caplan
Suppose you want to murder a lot of innocent people, but you also want to be widely loved.  What's the best way to achieve both goals simultaneously?Pablo Escobar's approach is probably the most effective: Kill freely, but also give freely. ... MORE

How the Welfare State Melts Your Conscience

Behavioral Economics and Rationality
Bryan Caplan
While vacationing in LA, I saw Escobar: Paradise Lost.  Not great, not bad, but I did learn something: drug lord Pablo Escobar was beloved as well as infamous.  His massive charitable giving won him a mass following: About 25,000 people... MORE

Bob Murphy has a post criticizing me for being inconsistent on the subject of interest rates and the stance of monetary policy. Sometimes I say that changes in interest rates don't tell us anything about the stance of monetary policy.... MORE

A Good Krugman Post

Economic Philosophy
David Henderson
Every once in a while, Paul Krugman writes a post that I find moving and, dare I say, endearing. He had one today titled "The Scale of Things (Personal and Trivial)." It is personal. I don't think it's trivial. I... MORE

The Socialist Economics of Italian Fascism

Cross-country Comparisons
David Henderson
On numerous occasions, Benito Mussolini identified his economic policies with "state capitalism"--the exact phrase that Vladimir Lenin used to usher in his New Economic Policy (NEP). Lenin wrote: "State capitalism would be a step forward as compared with the present... MORE

Employee Theft

Labor Market
David Henderson
I was reminiscing today with a friend about jobs we had when we were in high school and college. We had both worked in a kitchen for a big restaurant--he in Philadelphia and I at a resort in Minaki, Ontario... MORE

Greece: What are the markets telling us?

Monetary Policy
Scott Sumner
The Greeks have voted no in today's referendum, which makes it more likely (though not certain) that Greece will leave the euro. Some economists believe that this action would help the Greek economy. Devaluation would be an expansionary monetary shock,... MORE

Fracking: The Upside of Concentrated Beneficiaries

Public Choice Theory
David Henderson
UPDATE BELOW It's actually an upside of property rights. When explaining why various subsidy programs, tariffs, import quotas, and domestic restrictions on entry into various industries and occupations exist, public choice economists lean heavily on the concentrated benefits/dispersed costs paradigm.... MORE

The answer is probably yes (and the scare quotes head off complaints that big impersonal governments don't actually have human feelings.) The administration has clearly been upset that the Eurozone isn't doing more to help Greece. They complain that a... MORE

About two weeks ago, I challenged the following brief statement by Arnold Kling: We can also find this normative analysis among libertarians. Blaming terrorism on blowback for foreign intervention. Arnold was claiming that many libertarians are finding government intervention in... MORE

HINT: The textbook is The Economic Way of Thinking by Heyne, Boettke, and Prychitko. UPDATE BELOW In an excellent post today, Greg Mankiw writes about an unnamed competitor's textbook: I happened to be flipping through another introductory economics textbook. (Yes,... MORE

I often see Fed officials claiming that the fall in unemployment means that they need to raise interest rates. Sometimes this is based on "Phillips Curve" thinking---the (false) idea that inflation is caused by a booming economy. In fact, the... MORE

On Tuesday, Lisa Farbstein, an employee of the Transportation Security Administration, tweeted a photo of a bag containing $75,000 in cash and said: If you had $75,000, is this how you'd transport it? Just asking. TSA @ #RIC spotted this... MORE

My Failed Gotcha

Economic Philosophy
David Henderson
And remembering another failed gotcha in the past--and what I learned from it. This morning I read an article about the Greek crisis by UC Berkeley economist Barry Eichengreen, who has been following the crisis. In it, he writes: The... MORE

I first got into blogging in 2009 out of frustration over Fed policy. The US obviously had a huge demand shortfall, and the Fed wasn't doing enough to address the problem. Indeed I believe the Fed caused the huge demand... MORE

Return to top