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November 2015

A Monthly Archive (61 entries)

Krugman: Deregulate Housing

Regulation
David Henderson
Rising demand for urban living by the elite could be met largely by increasing supply. There's still room to build, even in New York, especially upward. Yet while there is something of a building boom in the city, it's far... MORE

Of iPads and socialism

Entrepreneurialism
Alberto Mingardi
Can we have "socialism, with an iPad"? This is the picture the Labour Shadow Chancellor recently used, with the aim of providing a somewhat modernized, albeit only symbolically, face for Jeremy Corbyn's economic proposals. Labour-leaning columnist Zoe Williams argues that... MORE

Dying of Humiliation

Books: Reviews and Suggested Readings
Bryan Caplan
Lieven's The End of Tsarist Russia subtly proposes a novel theory of Russia's disastrous entry into World War I: Millions died to spare Russia's elites from feelings of humiliation.  First, Lieven sets the stage:Revolution at home had undermined the Russian... MORE

The Federal Funds Target

Monetary Policy
David Henderson
When I posted last week about monetary economist Bill Poole's incorrect claim that the Fed Reserve sets the Federal Funds rate, a number of commenters objected that my claim was trivial. Most argued that Poole's usage was close enough to... MORE

The new left

Economics of Health Care
Scott Sumner
If you have been paying attention to the debate over public policy, you may have noticed that the GOP has moved even further to the right in recent decades, and the (formerly more moderate) Democrats have moved even more dramatically... MORE

False Externalities

Political Economy
David Henderson
However, increased consumption among youths leads to negative externalities. Raising the share of adults registered as medical marijuana patients by one percentage point increases the prevalence of recent marijuana use among adolescents and young adults by 5-6% and generates negative... MORE

Paul Krugman on jobs and GDP

Monetary Policy
Scott Sumner
In the past I've been critical of Paul Krugman's approach to austerity and business cycles. For instance, he argued that austerity in the UK led to slow growth in real GDP. I countered that RGDP is not the right variable... MORE

Externality

Economic Education
David Henderson
In my Executive MBA economics class a little over a week ago, I presented the following definition of a negative externality: A cost borne by someone who is not party to the decision that caused the cost. Then I asked... MORE

Ram on overconfidence

Economic Philosophy
Scott Sumner
A commenter named Ram left a brilliant comment over at TheMoneyIllusion. Here it is (emphasis added): I'd contend that the main problem in America is that the public, including its highly educated members, is social-scientifically ignorant. Most people I talk... MORE

Noah Smith's Unpersuasive Case

Economic Education
David Henderson
Economist Noah Smith has a recent article titled "Most of What You Learned in Econ 101 Is Wrong." He doesn't actually make the case that would support that title. But he also probably didn't choose the title. However, he did... MORE

Giving Thanks

Books: Reviews and Suggested Readings
David Henderson
Here's a Thanksgiving message from my 2001 book, The Joy of Freedom: An Economist's Odyssey, from a chapter titled "The Joy of Capitalism." I pointed out in Chapter 1 that British author Thomas Carlyle called economics "the dismal science" because... MORE

Benny Lava sent me an article discussing the German opposition to Mario Draghi's proposed monetary stimulus: But on Monday, Lautenschlaeger broke with normal etiquette to publicly criticize this stance, saying that ever looser monetary policy had its limits and that... MORE

The Fed does set the federal-funds rate--the overnight interest banks charge to lend to each other--and surely affects the timing of rate changes, but not the longer-run level. This is the second sentence of an op/ed in this morning's Wall... MORE

Douglass North, RIP

Obituaries
David Henderson
My Hoover colleague Doug North died yesterday at age 95. Here's his bio in The Concise Encyclopedia of Economics. And here's a statement issued by the Hoover Institution: STATEMENT BY TOM GILLIGAN DIRECTOR, HOOVER INSTITUTION, STANFORD UNIVERSITY FOR IMMEDIATE RELEASE... MORE

The Fed is above the law

Monetary Policy
Scott Sumner
This post may upset some people, but I am simply trying to describe the world as it is, not as I would wish it to be. I recently spoke with Ryan Hart, who is researching the legal status of Fed... MORE

More Data or Less?

Income Distribution
David Henderson
My friend and Hoover colleague John Cochrane has signed a letter to four members of Congress that calls on Congress to spend more money on getting better economic data. John argues at his blog: Few public goods are as cheap... MORE

The Center Will Hold: My 10:1 Bet Stands

Economic Methods
Bryan Caplan
Despite much gruesome Schadenfreude on Twitter, I stand by the terms of my 10:1 bet that no European country that was not Communist in 1988 will have a civil war resulting in 10,000 or more fatalities by December 31, 2045. ... MORE

Thinking on the Margin About Work

Behavioral Economics and Rationality
David Henderson
I was talking on the phone Saturday with a friend who called to wish me happy birthday on my 65th birthday. (See what I did there? :-)) This friend is a doctor, not an economist, but I think he would... MORE

Using Economics to Make Judgement Calls

Behavioral Economics and Rationality
David Henderson
There are few student species more nakedly ambitious, focused, and future-oriented than the average Harvard law student. Having likely spent his undergraduate years planning admissions maximization strategies, he now has the Holy Grail almost within his grasp. Let him but... MORE

Iraq: Disaster By Popular Demand

Behavioral Economics and Rationality
Bryan Caplan
Here's my April, 2007 op-ed on voter irrationality that never found a home. 800x600 "Power to the people" - war protestors have been saying it for decades.   The more you study public opinion, though, the more peculiar this slogan seems. ... MORE

Megan McArdle on How to Win Friends and Influence Policy

Behavioral Economics and Rationality
David Henderson
Megan McArdle has written an excellent, pithy post titled "How to Win Friends and Influence Refugee Policy." I won't summarize it here because it's so good and, as I said, pithy, that it repays your small effort in reading it.... MORE

It seems as though the major central banks are beginning to rethink their assumptions. Here's an ECB official: Monetary policy risks becoming ineffective in a world where growth is sluggish, economies are deeply interconnected and interest rates are already near... MORE

Highlights from the Asness Interview

Finance: stocks, options, etc.
David Henderson
Tyler Cowen has posted the video and transcript of his interview with famous investor Cliff Asness. Here are some highlights from the transcript, with my occasional comments. On future returns: Asness: So you invest half your money in stocks, half... MORE

Wage stickiness as a macro problem

Labor Market
Scott Sumner
A commenter recently made these observations: Working in an office, I still don't see the libertarian position on laying people off versus sticky wages. What I have seen is firms tend to lay people off versus larger wage cuts because:... MORE

Open Borders Meets the Writers Workshop

Economic Philosophy
Bryan Caplan
The staunchly anti-immigration US Inc. invited me to present my case for open borders.  Here's what I told them.... MORE

Brad DeLong on Cornucopia

Growth: Consequences
David Henderson
I'm sitting in a United Red Carpet Club at LAX, having just used my last coupon that expires next year. That, in itself, is evidence of Cornucopia. I'm able to get on line, get "free" booze (although I opted for... MORE

Is the Fed beginning to see the light?

Monetary Policy
Scott Sumner
For years I've been arguing that trend real GDP growth is lower than the Fed believes, that the new normal of interest rates will be lower than the Fed believes, that rates will again fall to zero in future recessions,... MORE

Meta-Crisis

Political Economy
Bryan Caplan
Whenever new shocking news breaks, I remember what Robert Higgs wrote back in 1987:[W]e do know something - at least abstractly - about the future.  We know that other great crises will come.  Whether they will be occasioned by foreign... MORE

Heyne, Boettke, and Prychitko on Congestion Pricing

Books: Reviews and Suggested Readings
David Henderson
I'm using my favorite textbook for my Executive MBA economics course: The Economic Way of Thinking by the late Paul Heyne, Peter Boettke, and David Prychitko. I'm using the 11th edition, which I prefer to the 12th edition. I haven't... MORE

A Swarm of Thoughts on Hive Mind

Books: Reviews and Suggested Readings
Bryan Caplan
Some of what's swirling in my mind after reading Hive Mind:1. At the individual level, IQ is much more highly correlated with job performance than income.  So while national IQ has a bigger effect on national income than personal IQ... MORE

A commenter named Cameron sent me this interesting exchange from the recent GOP debate: CRUZ "Yes. Now, let's be clear, there is a role for the Federal Reserve -- what the Fed is doing now is it is a series... MORE

Take This Ideological Turing Test

Behavioral Economics and Rationality
Bryan Caplan
Here.... MORE

The Architecture of Hive Mind

Books: Reviews and Suggested Readings
Bryan Caplan
My debate partner and former co-blogger Garett Jones' Hive Mind: How Your Nation's IQ Matters So Much More Than Your Own is finally out.  It's a wonderful book in both substance and style - peak Garett.  He instinctively hews to... MORE

Krugman, Mueller, and McCain on Terrorism

Behavioral Economics and Rationality
David Henderson
I don't say this much, but Paul Krugman has a very good column in today's New York Times. It's on the horrible events in France and is titled "Fearing Fear Itself." The title is, of course, a takeoff on the... MORE

My view of macro

Cross-country Comparisons
Scott Sumner
Several other bloggers have recently described how they visualize macro, so I'll play copycat. I see three types of macro, each radically different from the other two: Long run nominal is the easiest to explain, then business cycles, and long... MORE

The ADA seems to have failed

Labor Market
Scott Sumner
I noticed this in a paper by David H. Autor and Mark Duggan: The Americans with Disabilities Act of 1990 (ADA) forcefully articulates this contemporary view of disability: "Physical or mental disabilities in no way diminish a person's right to... MORE

Thoughts on the Caplan/Jones Debate

Labor Mobility, Immigration, Outsourcing
David Henderson
I've long believed that the most interesting conflicts are not between good and evil, but between good and good. For that reason, I found the Caplan/Jones debate on immigration quite interesting. I know Bryan Caplan pretty well, though mainly at... MORE

Bernanke on fiscal policy

Fiscal Policy
Scott Sumner
Fiscal policy is the one area where I disagree most strongly with Ben Bernanke. In his new memoir (p. 387), he indicated that he supported Bush's fiscal stimulus of early 2008. But why? Bernanke gives no explanation at all. He... MORE

The Brexit debate

Eurozone crisis
Alberto Mingardi
The debate over "Brexit" is becoming more and more relevant in the media. British prime minister David Cameron, in a letter to the European Council, spelled out his demands to Brussels. Cameron is seeking "change" in European institutions in order... MORE

Reflections on the Caplan-Jones Immigration Debate

Cost-benefit Analysis
Bryan Caplan
If you missed the Caplan-Jones debate, you can watch a slick version here.  The best part: We each had five minutes to "grill" each other.  I learned a lot during those minutes.  Main thoughts:1. Garett neatly boils down research on... MORE

(The following post is based on a series of very helpful comments left by Patrick Sullivan. Any mistakes are my own. When I ask progressives how "deregulation" caused the 2008 banking crisis, many point to Gramm, Leach, Bliley (1999), which... MORE

Live Tweeting the Republican Debate

Political Economy
David Henderson
Well, gulp, here goes. I've decided to live tweet the Republican debate tonight. I don't promise not to be snarky. I do promise not to be mainly snarky. I also promise not to fill space. So if someone says something... MORE

Presidential Resignation: Good Move, Wrong President

Economics of Health Care
David Henderson
University of Missouri president Tim Wolfe announced today that he is resigning effective immediately. The incident that got much national coverage was a strike by many of the football players on the college team. But one of the earlier incidents,... MORE

Overconfidence: Category Missing?

Central Planning vs. Local Knowledge
David Henderson
Timothy Taylor, over at Conversable Economist, has a post today titled "Overconfidence: Ancient Evil." It's about a 3-article symposium in the latest issue of the Journal of Economic Perspectives. In their introduction to the section, he and his co-author, Ulrike... MORE

Perhaps the most surprising thing about Ben Bernanke's recent memoir is the lack of surprises, at least about what was going on inside the Fed in terms of the monetary policy debate. That's probably a result of the high quality... MORE

At a conference I was at on Friday, we discussed the late Pierre Goodrich's Liberty Fund Basic Memorandum. Goodrich is the person who started Liberty Fund and devoted his sizable fortune to it. I feel grateful to him whenever I... MORE

Caplan-Jones Immigration Debate

Books: Reviews and Suggested Readings
Bryan Caplan
I'm pleased to announce that I'll be debating former EconLog blogger Garett Jones at Northwood University in Midland, Michigan on "Should We Have Open Borders?"  The event will be livestreamed on Tuesday, November 10 starting 7 PM EST at this... MORE

Alvin Rabushka on the New Bias in Polling

Public Choice Theory
David Henderson
The "Shy Tory Voter" phenomenon has come to America. So writes my Hoover colleague Alvin Rabushka. Alvin goes on to explain as follows: The universality of political correctness, which means that you cannot speak the truth on any controversial topic,... MORE

A review of DeLong's review of Bernanke

Monetary Policy
Scott Sumner
In my view, old Keynesianism was based on the cognitive illusion that money doesn't matter, at least when interest rates were near zero. By the 1980s that spell was broken, and we had almost all pretty much rejected old Keynesianism,... MORE

Lord Acton's Humor

Books: Reviews and Suggested Readings
David Henderson
Yesterday I posted about what a treat it was to read two essays by Lord Acton. Here are some of his more-humorous lines. On Heraclitus: Heraclitus is, unfortunately, so obscure that Socrates could not understand him, and I won't pretend... MORE

100% money?

Monetary Policy
Scott Sumner
Alex Tabarrok points out that Switzerland will have a referendum on a 100% reserve banking system. The details are kind of vague, as is the motivation. It's also odd that this is occurring in Switzerland, which supposedly has a "problem"... MORE

In Praise of Lord Acton

Liberty
David Henderson
In preparing for a conference I'm attending in Indianapolis, I read two chapters from Lord Acton's book of essays titled Essays in the History of Liberty. What a treat! Like most people who have heard of Lord Acton, I knew... MORE

Humane Canada

Behavioral Economics and Rationality
Bryan Caplan
How does Canada's immigration "points system" work?  While I have no plans to move to the Great White North, curiosity led me to the this online calculator.  Sadly, my Princeton Ph.D. isn't good enough for Canada.  The most revealing part... MORE

Hummel on Recessions and Banking Crises

Monetary Policy
David Henderson
Monetary economist and economic historian Jeffrey R. Hummel has done a real service by putting together a table, with surrounding discussion, that gives the dates of major recessions. He also gives, for each recession, whether it was accompanied by a... MORE

Gonzalez on the Multicultural Threat

Behavioral Economics and Rationality
Bryan Caplan
Mike Gonzalez replies to my doubts about the practical import of multiculturalism:In my talk, I underlined the point that another friend, Niger Innis, always makes: Even if we were to shut the immigration doors completely, the next president will have... MORE

Arnold Kling on "Sumnernomics"

Monetary Policy
Scott Sumner
Here is Arnold Kling: What I wish to point out is that the relationship as depicted is an anomaly with respect to textbook AS-AD, including both Keynesian economics and Sumnernomics. Timothy Taylor refers to the relationship as a Phillips Curve.... MORE

Cochrane's Questions About Inequality

Books: Reviews and Suggested Readings
Bryan Caplan
Just finished the forthcoming Inequality and Economic Policy: Essays in Honor of Gary Becker, edited by Tom Church, Chris Miller, and John Taylor.  For me, the highlight was John Cochrane on inequality.  Highlights from the highlight:More puzzling, why are critics... MORE

The Punchline of Labor Market Regulation

Behavioral Economics and Rationality
Bryan Caplan
Last night, while rewatching the classic Simpsons "Saddlesore Galatica," I came across a great pedagogical moment that even Homer Economicus: The Simpsons and Economics misses.  In the episode, an abusive horse trainer flees from the state fair, leaving his mistreated... MORE

Did Gabriel Kolko Make His Case Well?

Business Economics
David Henderson
Our authors say no. Murray Rothbard's estimate of Kolko's business-government historiography was too hasty, perhaps because its anti-Big Business conclusions were simple and congenial for a libertarian worldview. Subsequent classical-liberal praise of Gabriel Kolko as "a socialist but nonetheless an... MORE

Lynch and Freiman on Open Borders

Labor Mobility, Immigration, Outsourcing
David Henderson
Over at the our sister site, the Library of Law and Liberty, my friend Patrick Lynch wrote a post titled "Libertarians Can Believe in Borders." While I can conceive of good arguments against completely unrestricted immigration, and while some of... MORE

It's not clear what a term like 'natural' actually means. What are "natural foods" for instance? Are they foods free of natural pesticides? Free of artificial pesticides? Are they free of both natural and artificial pesticides? And what if the... MORE

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