Bryan Caplan and David Henderson

Arnold Kling: March 2003

An Author Archive by Month (32 entries)

Economics of Hydrogen

Energy, Environment, Resources
Arnold Kling
Lynne Kiesling has written a five-part article on hydrogen fuel cells. She looks at technical issues as well as economic issues, and each part in the series offers insightful analysis. The last installment questions the wisdom of the Bush Administration's... MORE

Economics and its Enemies

Alternative Economics
Arnold Kling
William Coleman, author of Economics and its Enemies, gave a lecture on the history of anti-economics. He sees two main sources of hostility to economics. First, The paradoxical truth is that nothing is more unpopular than the pursuit of the... MORE

Can you Beat the Market?

Efficient Markets Hypothesis
Arnold Kling
Financial columnist James Glassman touts a study by Joshua D. Coval, David A. Hirshleifer, and Tyler G. Shumway that shows that some investors were able to beat the market consistently. This conflicts with the efficient markets hypothesis. The authors write,... MORE

War Economics

Fiscal Policy
Arnold Kling
We are starting to see articles on the economics of the Iraq war. Some are described in this article by Virginia Postrel and others are described in this post by 'Jane Galt.' Postrel correctly points out that old-fashioned Keynesian theory... MORE

Comments of the Week, 2003-03-26

Economics of Education
Arnold Kling
The teacher pay issue drew the most interesting comments. Someone who left only a first name wrote a voucher system would make the educationally well-off better off, would make the poorly-off worse off, would Balkanize society, and would create an... MORE

Organ Transplant Market?

Behavioral Economics and Rationality
Arnold Kling
Irwin M. Stelzer argues that the shortage of organ donors is due to price controls--in particular, the fact that organ donors do not get paid. if we can begin to think about this issue in a clear-headed way, we might... MORE

Teacher Pay

Economics of Education
Arnold Kling
Peter Temin argues that teacher pay is too low. He says that in the past, limitied opportunities for women meant that schools were supplied with a pool of high-quality teachers willing to work for low pay. Today, however, talented women... MORE

About EconLog / Econlib

Econlog Administrative Issues
Arnold Kling
EconLog, edited by Arnold Kling and Bryan Caplan, is an economics-oriented weblog or "blog" associated with the Library of Economics and Liberty (Econlib). EconLog provides up-to-date commentary and links on recent topical matters in economics, with new articles posted three... MORE

The Budget Debate, VII

Social Security
Arnold Kling
I want to follow up on the attempt by the Center for Budget and Policy Priorities to compare the future bulge in entitlement spending to the Bush tax cut--see this thread. The CBPP was able to shrink the gap between... MORE

The Budget Debate, VI

Social Security
Arnold Kling
[Update: Bernard Yomtov convinced me that the CBPP did not make the error I suggested below. Instead, the way that they accomplished the swindle is explained in this post.] As a share of GDP, increases in future Medicare and Social... MORE

Peak Load Pricing and Mental Transaction Costs

Behavioral Economics and Rationality
Arnold Kling
Clay Shirky used (coined?) the term mental transaction costs to describe the problem with using micropayments (small payments to download articles or music). I believe that economists tend to over-rate the value of peak-load pricing systems, because they fail to... MORE

Comments of the Week, 2003-03-19

Public Choice Theory
Arnold Kling
There were several interesting comments under the thread of Public Transit and Public Choice. Bernard Yomtov wrote, Liberals do believe the market fails sometimes. This is hardly a radical position. It is almost universally accepted except among market-worshippers who seem... MORE

Surveys Vs. Revealed Preference

Revealed Preference
Arnold Kling
Richard Layard uses survey research and some fancy philosophical footwork to argue against conventional wisdom in economics and in favor of a nanny state. Some quotes from the series of three lectures: People in the West have got no happier... MORE

Protesting Economic Education

Economic Education
Arnold Kling
In this essay, I cited Steven Pinker on the value of teaching economics, but I concluded with doubts as to whether "economic idiotarianism" could be eradicated entirely with education. Consider this story about the movement for alternative economics, including a... MORE

Impact of Dividend Tax Reform

Tax Reform
Arnold Kling
The users of housing rehabilitation tax credits believe that the Bush Administration proposal to eliminate double taxation of dividends will hurt their industry. Richard Moe writes, By allowing shareholders to receive tax-free dividends only on corporate profits that are fully... MORE

Employees as Owners

Microeconomics
Arnold Kling
Charles Duhigg, a student at Harvard's Business School, reviews some disadvantages of employee stock ownership. A 2000 study by economists at the University of South Alabama found that when the amount of stock held in an ESOP increases, ''management will... MORE

The Deficit Argument, V

Social Security
Arnold Kling
David Warsh gives one of the more sober overviews of the debate over tax cuts, the deficit, and Social Security. There are two basic issues in US tax policy — the question of the size of government and the health... MORE

Public Transit and Public Choice

Public Choice Theory
Arnold Kling
Here is Public Choice theory boiled down to three sentences, by'Jane Galt'. The liberal mantra is that the market fails. The free market mantra is that government fails worse. And I think the weight of empirical evidence is on our... MORE

Comment of the Week, 2003-03-13

Trade Barriers
Arnold Kling
The topic of the World Population Outlook leads to the issue of immigration. David Thomson made this point. We need to educate these people so that they can become productive citizens. Will this encourage more Mexicans and others to break... MORE

Anti-anti-economics

Information Goods, Intellectual Property
Arnold Kling
In Suits and Geeks, I discuss some information-age economic issues. As Carl Shapiro and Hal Varian wrote, "Technology changes. Economic laws do not." My essay concludes, My goal is to see ignorance reduced on both sides of the Suit-Geek divide.... MORE

Economic vs. Non-economic Savings Incentives

Microeconomics
Arnold Kling
Hal Varian compares the potency of two types of incentives to save. One incentive is a tax break for savings. The other is a non-economic incentive, in which it becomes easier for an employee to sign up (or harder not... MORE

Growth and Anti-Americanism

Growth: Consequences
Arnold Kling
Marian L. Tupy writes, If I am correct, then at least some of the roots of contemporary anti-Americanism rest on a deep misunderstanding concerning the functioning of international economics. Contrary to common misconception, the reasons for global economic inequality rest... MORE

Israel's Public Sector

Macroeconomics
Arnold Kling
Israel is an example of a country where there is a need to confront government spending. The cooperation of the public sector is essential to the success of an economic plan to cut spending, said Treasury wage director Yuval Rachlevsky... MORE

World Population Outlook

Growth: Causal Factors
Arnold Kling
Ben Wattenberg analyzes the world population outlook. In the United Nations' most recent population report, the fertility rate is assumed to be 1.85, not 2.1. This will lead, later in this century, to global population decline. He points to a... MORE

Supply-side Dissatisfaction, II

Supply-side Economics
Arnold Kling
N. Gregory Mankiw, incoming chairman of the President's Council of Economic Advisers, continues to take flak from supply-siders. In this essay, I discuss the latest attack, from The Wall Street Journal's Susan Lee (subscription required). Her objection to Mankiw is... MORE

Trade War?

Trade Barriers
Arnold Kling
The WindsofChange blog asks, will the foreign-policy rift over Iraq spark a trade war between the U.S. and other countries? Indeed, a long term French campaign to introduce retaliatory and anti-USA tarrifs in the EU strikes me as not only... MORE

Central Bank Timidity

Macroeconomics
Arnold Kling
Morgan Stanley's Steve Roach writes about the timidity of the European Central Bank. Incrementalism doesn’t work in combating deflation. That was one of the key lessons that the research staff of the Federal Reserve drew in a widely noted paper... MORE

Comment of the Week, 2003-03-06

Macroeconomics
Arnold Kling
Jim Glass cited an essay by Eugene Steuerle called Do We Really Need More Stimulus? The total decline in fiscal posture for 2003 alone comes to around $500 billion. Compare this to the size of the economic decline...the total decline... MORE

Feldstein for Fiscal Stimulus

Macroeconomics
Arnold Kling
Martin Feldstein, writing in the Wall Street Journal (subscription required), makes the case for fiscal stimulus. The shift of the cyclically adjusted federal budget from a $108 billion surplus in 2001 to a $117 billion deficit in 2002 added $225... MORE

The Language Barrier, II

Growth: Causal Factors
Arnold Kling
The Economist notices that the English language is gaining in importance. This trend was spotted earlier by yours truly, and before that by Paul Krugman. Brad DeLong echoes my view that the use of English by India's educated elite is... MORE

Economics of Obesity

Microeconomics
Arnold Kling
Economists Shin-Yi Chou, Michael Grossman, and Henry Saffer attempt to weigh in on the issue of why obesity is spreading. These data show that more household time is going to market work. There is correspondingly less time and energy available... MORE

Inefficient Market?

Efficient Markets Hypothesis
Arnold Kling
If you believe in efficient markets, then you should be very skeptical of the rest of this post. Ohio State's J. Huston McCulloch, a leading authority on bond pricing, said on 2003-01-31, Frankly, stocks are so reasonably priced relative to... MORE

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