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December 2015

A Monthly Archive (59 entries)

Thoughts on "Almost Wholly Negative"

Economic Philosophy
David Henderson
This morning, I was perusing the American Economic Association's program for its annual meetings, trying to decide whether to do the 2+ hour drive up to San Francisco for a day on Sunday. I worked my way through the program,... MORE

Tina Rosenberg on Kidneys in Iran

Cost-benefit Analysis
David Henderson
The main reason I have not posted much on Russ Roberts's excellent Econtalks is that my commute is so short (about 11 minutes) that the hassle of connecting my iPhone with my old car's system made the cost too high.... MORE

There's no taste for accounting

Economic Methods
Scott Sumner
Modern economics tends to use sophisticated statistical techniques to try to infer causal relationships. Boring old accounting is out of style. I think this is unfortunate. The most important book on macroeconomic history was Friedman and Schwartz's Monetary History of... MORE

Recession Bet

Economic Methods
Bryan Caplan
At the Cato Holiday Party, I hammered out the following bet with outgoing Cato intern Jackson Taylor:$200 on whether or not America will have a recession, defined as two consecutive quarters of negative real GDP growth, in the next two... MORE

Coercive Priors

Behavioral Economics and Rationality
Bryan Caplan
I enjoyed scoffing at the 30% of Americans who want to bomb the fictional kingdom of Agrabah.  But for balance, note that multiple surveys - and a Penn and Teller episode - have found plenty of Americans who want to... MORE

The art of the possible

Tax Reform
Scott Sumner
This is from an excellent John Cochrane essay on tax reform: Second, the government should tax consumption, not wages, income or wealth. When the government taxes savings, investment income, wealth or inheritance, it reduces the incentive to save, invest and... MORE

Two Public Choice Questions

Economic Education
Bryan Caplan
My undergraduate Public Choice students struggled with these questions on the final exam.  Can you do better?  Show off in the comments! 800x600 3. Local governments provide free public education to residents' children, regardless of the taxes they pay or... MORE

Climate Schlock

Books: Reviews and Suggested Readings
David Henderson
How likely is it that the world will warm not just by 2 degrees Fahrenheit by the end of this century, but by 11 degrees? What would happen to the planet? And, to avoid a much hotter world, what should... MORE

Economists who lack an imagination

Economic Methods
Scott Sumner
One thing that bugs me is economists who seem to think that their way of looking at life is the right way. Indeed the only sensible way. 1. Economists who complain that Christmas presents are inefficient. Do they ever consider... MORE

Boudreaux on Hayek

Books: Reviews and Suggested Readings
David Henderson
One of the distinctions that Boudreaux and Hayek both stress is the one between law and legislation. Boudreaux illustrates this with three nice examples, two of law and one of legislation. On the law side, he tells a story that... MORE

Merry Christmas and Peace on Earth

International Trade
David Henderson

The Fed doesn't have a magic wand

Monetary Policy
Scott Sumner
Suppose I put a digital sign outside my house, with "Sumner's fed funds rate target" and a number. And suppose I adjusted the target rate from 0.25% to 0.5% last week, right at 2pm on Wednesday. Would I have caused... MORE

No More Stiglers

Economic Methods
David Henderson
I've been pondering a post that development economist Chris Blattman wrote earlier this month. It's disturbing, partly on its own and partly because it meshes with other things that are clearly observable in the economics profession. Here's part of his... MORE

Anthony de Jasay awarded the ECAEF Prize

Liberty
Alberto Mingardi
Anthony de Jasay has been awarded the first "ECAEF Prize for Thinkers for the 3rd Millennium". This is a much deserved recognition, for de Jasay has set a standard for clarity of thought that is seldom matched by others. Regarding... MORE

Labor Econ Versus the World: Ecumenical Edition

Behavioral Economics and Rationality
Bryan Caplan
Most courses in labor economic don't strive to undermine our society's secular religion.  Mine does.  I suspect that most labor econ professors would object to my efforts.  Shouldn't a college class provide a balanced discussion of the issues, instead of... MORE

I have a couple posts over at MoneyIllusion, arguing that lower interest rates are contractionary. The basic argument is that lower interest rates reduce velocity, which reduces NGDP (for any given money supply). Now Nick Rowe has a post which... MORE

Economics Strikes Again: Stereotypes Give Way to Information

Behavioral Economics and Rationality
David Henderson
Another classic study by Darley & Gross published in 1983, found that people applied a stereotype about social class when they saw a young girl taking a math test, but did not when they saw a young girl not taking... MORE

Labor Econ Versus the World: Further Thoughts

Behavioral Economics and Rationality
Bryan Caplan
Further thoughts on Labor Econ versus the World:1. In my youth, I saw Industrial Organization as the heart of our secular religion.  My history textbooks loudly and repeatedly decried "monopoly"; teachers, peers, and parents echoed their complaints.  Since the late-90s,... MORE

My Comments on George Shultz's 95th Birthday

Economic Philosophy
David Henderson
On December 11, I chaired a panel at the Hoover Institution as part of a day-long celebration of George Shultz's 95th birthday. On the panel I chaired were, in order of speaking, David Davenport of Hoover, Heather MacDonald of the... MORE

Labor Econ Versus the World

Behavioral Economics and Rationality
Bryan Caplan
My 13-year-old homeschooled sons just finished my labor economics class.  I hope they take many more economics classes, but I'll be perfectly satisfied with their grasp of economics as long as they internalize what they learned this semester.  Why?  Because... MORE

In Praise of Costco Competition

Business Economics
David Henderson
I had a wonderful experience at Costco in Sand City, California on Friday. I spent about $50 and saved about $350 and a lot of time. First, some background. Whenever I travel, I take my pair of glasses that... MORE

Not all depressions are due to NGDP shortfalls

Cross-country Comparisons
Scott Sumner
Here's the Financial Times on Brazil: Brazil's economy has suffered a dramatic decline this year. Economists surveyed by the central bank expect economic growth to contract 3.6 per cent this year and 2.7 per cent in 2016 while inflation is... MORE

Freakonomics on Immigration

Labor Mobility, Immigration, Outsourcing
David Henderson
Freakonomics has a nicely balanced treatment of the immigration controversy, highlighting the thinking of "open borders" advocate Alex Tabarrok, an economics professor at George Mason University and one of the two bloggers at marginalrevolution.com; Michael Clemens, a senior fellow at... MORE

Libertarians have nowhere to turn

Politics and Economics
Scott Sumner
In my view neither major political party has libertarian inclinations. That's not to say that there aren't a few individual party members who lean slightly libertarian. Senator Rand Paul is obviously more libertarian that Donald Trump, and Senator Ron Wyden... MORE

Citizen statesmen no more

Politics and Economics
Alberto Mingardi
I watched the Republican debate and followed it on Twitter, as I'm sure many of you did. As somebody who cannot possibly vote in this race, I found it in many ways surprising. Particularly given the fact the debate was... MORE

Pinker on Intelligence, Liberalism, and Economic Literacy

Books: Reviews and Suggested Readings
David Henderson
In the second-last chapter of his excellent book The Better Angels of Our Nature: Why Violence Has Declined, Harvard University psychology professor writes, in a short section subtitled "Intelligence and Liberalism": Now we get to a finding that sounds more... MORE

All Politicians Lie: The Empirics

Behavioral Economics and Rationality
Bryan Caplan
My view that politicians are evil does not imply that politicians are liars.  It's logically possible to be candid about one's evil.  Nevertheless, as you'd expect, I combine my grim view of politicians' overall character with an equally grim assessment... MORE

High Compliments from Alvin Rabushka

Competition
David Henderson
One of my favorite Hoover colleagues, Alvin Rabuskha, in a post titled "Kudos to Econlog," writes: EconLog is among the top economics blogs and among my favorites. I open it daily and sometimes several times a day. Its bloggers are... MORE

Everything is back to being the same again

Monetary Policy
Scott Sumner
The long dark age of vulgar Keynesianism is finally over. For 7 long years we've heard economists tell us that the laws of economics don't apply at the zero bound. We are told that "everything is different" at the zero... MORE

Assimilation and Immigration Restriction

Behavioral Economics and Rationality
Bryan Caplan
Opponents of immigration normally argue rapid assimilation is wishful thinking.  If we admit culturally alien immigrants, they won't "go native."  They'll hew to their dysfunctional ways and pass them on to their children generation after generation.I was struck, then, to... MORE

If Politicians are Evil, What Do We Do?

Public Choice Theory
David Henderson
I've been pondering co-blogger Bryan Caplan's post "How Evil are Politicians?" for the last week. As always, Bryan states his case well. And I found little in it to disagree with. But for some reason, I didn't find it compelling.... MORE

Intellectual regress

Economic Methods
Scott Sumner
Intellectual progress is much more common than regress, but I do believe that the latter problem occurs more often than we might assume. Mid-century Keynesianism may have represented progress in some dimensions, but it also reflected regress on our understanding... MORE

Demography and Decency

Behavioral Economics and Rationality
Bryan Caplan
The staunchest critics of immigration focus on demographic complaints.  We're currently a white/Christian/English-speaking/high-IQ country.  To maintain these favorable demographics, we have to heavily restrict or exclude contrary immigration.  Keep out non-whites.  Keep out non-Christians.  Keep out non-Anglophones.  Keep out people... MORE

Schengen, adieu

Eurozone crisis
Alberto Mingardi
A few weeks ago I flew in and out of France - and I had to show my identity card at passport control. This was not that much of a nuisance, to be fair, and security officers were most kind,... MORE

No Plan for What Comes After

Behavioral Economics and Rationality
Bryan Caplan
My elder sons got the first four seasons of Game of Thrones for their thirteenth birthday, so I get to watch the whole series again.  Season 2, Episode 4 is even more pacifistic than I remember.  Crucial scene: Talisa, the... MORE

In two words, "It's complicated." In October, I challenged co-blogger Scott Sumner's claim that the Liberal Party's electoral win in Canada would lead to an increase in freedom. Recall that Scott had written: Yesterday's win for the Canadian Liberals was... MORE

Mood affiliation and the success of BOJ policy

Monetary Policy
Scott Sumner
Bryan Caplan recently applied Tyler Cowen's mood affiliation hypothesis to global warming. Here's Tyler: It seems to me that people are first choosing a mood or attitude, and then finding the disparate views which match to that mood and, to... MORE

Question for Bill Bradley

Regulation and Subsidies
David Henderson
Update below: I attended George Shultz's 95th birthday party at the Hoover Institution last night. George is nothing if not ecumenical, which is one of his best qualities. So George was the one who invited former U.S. Senator Bill... MORE

NGDP targeting is not "easy money"

Monetary Policy
Scott Sumner
One of the many frustrations that I face in advocating NGDP targeting is the misconception that this policy regime is more "expansionary" than inflation targeting. In fact, the two are identical in the long run, and in the short run... MORE

The Meaning of Mood

Behavioral Economics and Rationality
Bryan Caplan
Tyler Cowen often inveighs against the Fallacy of Mood Affiliation:It seems to me that people are first choosing a mood or attitude, and then finding the disparate views which match to that mood and, to themselves, justifying those views by... MORE

That is the longest title I've ever used. But I couldn't figure out a way to shorten it. Why am I asking? Because in a post this morning, that's what Tyler Cowen advocates. In a piece on gun control and... MORE

From the Horse's Mouth

Politics and Economics
David Henderson
Later, at the site where world leaders are meeting to negotiate a climate pact outside of Paris, [California governor Jerry] Brown urged a small crowd to "never underestimate the coercive power of the central state in the service of good."... MORE

The Most Educated Poor in History

Economics of Education
Bryan Caplan
Check out Matt Bruenig's very good piece on education, poverty, credential inflation, and signaling.  Key facts:1. "As the adults migrated up the educational bins, they took the poverty into the higher educational bins with them:" 2. "Over this period, the... MORE

Garett Jones and Charles Tiebout

Game Theory
David Henderson
I haven't read Garett Jones's book Hive Mind yet and so what I'm about to write is based on my trusting Scott Alexander to accurately characterize Garett's argument. In his review of Garett's book, Alexander summarizes part of Garett's argument... MORE

Open Borders Meetup: The Speech

Economic Philosophy
Bryan Caplan
The 2015 Open Borders Meetup went splendidly.  Seventy people attended, including Open Borders bloggers Nathan Smith, John Lee, and David Bennion.  My one regret: I had a prime opportunity to deliver a galvanizing speech, but failed to do so.  Here's... MORE

Some Keynesians define the stance of monetary policy in terms of interest rates. This is of course a really bad idea, as it implies monetary policy is highly contractionary during periods of hyperinflation. Give Paul Krugman credit for avoiding that... MORE

Transport for London, the licensing authority for London's taxi and private hire industries, has run a consultation over some proposals for regulating minicabs in London. Alex Chisholm, chief executive of the Competition and Markets Authority, has published an op-ed in... MORE

Rousu on The Hunger Games

Central Planning vs. Local Knowledge
David Henderson
The Hunger Games also does a good job of showing the poverty that results from this form of government control. An economy is not well-served when government violates people's right to sort themselves into the work they can best accomplish.... MORE

How Evil Are Politicians?

Economic Philosophy
Bryan Caplan
I think politicians are, by and large, evil people.  When I shared my verdict with a journalist friend, he strongly objected.  He rightly pointed out that he's had ample personal interaction with politicians.  In his experience, politicians of both parties... MORE

Numeracy and the Paris Attacks

Economic Education
David Henderson
One of my pleasures in teaching is learning that students have taken things they've learned and passing them on to their colleagues, friends, and families. That happened recently in my distance learning class. A few weeks ago, in a 40-minute... MORE

Tim Fernholz has an excellent article in Quartz on the evolution of Ted Cruz's views on monetary policy: But the Washington Examiner's Joseph Lawler has found Cruz is shifting directions in an intriguing fashion. He has begun echoing critiques made... MORE

A little bit of each. 1. My analysis of the Great Depression is monetarist in the sense that I believe inflation and demand-side business cycles are fundamentally monetary phenomena, to be explained by analyzing changes in the supply and demand... MORE

I hope readers will forgive me for a little conflict-of-interest post. A few weeks ago, my Institute celebrated its annual dinner in Milan. In this occasion, we award the annual "Bruno Leoni Prize". Conceived to honor the memory of Bruno... MORE

Paging Frederic Mishkin

Monetary Policy
Scott Sumner
Consider the following recent exchange in a Senate hearing: Senator Cruz: In the summer of 2008, responding to rising consumer prices, the Federal Reserve told markets that it was shifting to a tighter monetary policy. This in turn set off... MORE

Paul Krugman on inequality

Income Distribution
Scott Sumner
Paul Krugman reviews Robert Reich's new book in the New York Review of Books: Something else began happening after 2000: labor in general began losing ground relative to capital. After decades of stability, the share of national income going to... MORE

Straw Men Rule

Behavioral Economics and Rationality
Bryan Caplan
Yesterday I was on a panel on drug policy with a Virginia state senator.  As you'd expect, I made the case for full drug legalization.  And as you'd expect, he objected.  What's striking, though, is how he objected.  His top... MORE

Wars of Negligence

Behavioral Economics and Rationality
Bryan Caplan
I'm a pacifist because I think that you shouldn't kill innocent people unless you're reasonably sure that such killing will have very good consequences.  Occasionally I meet a thoughtful hawk who ably disputes my skepticism.  For the most part, though,... MORE

The Midas Paradox

Economic History
Scott Sumner
My book on the Great Depression is officially published today. Looking back on the long project, I see 6 themes that have been there throughout my research career (which began in 1986, with this project.) Never reason from a... MORE

What Was Balkanization?

Behavioral Economics and Rationality
Bryan Caplan
Here's how Dominic Lieven's The End of Tsarist Russia dissects Balkan politics in the years right before World War I:Here Macedonia remained the key focus of instability.  The commitment of the new regime in Constantinople to centralization and Turkish nationalism... MORE

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