Bryan Caplan and David Henderson

Arnold Kling: August 2003

An Author Archive by Month (28 entries)

High-Beta Houses

Finance: stocks, options, etc.
Arnold Kling
Kenneth Harney reports that prices for condominiums rising have shot up. whereas the nationwide median price of single family resale homes was up by 7.4 percent during the past year (to $169,900 at the end of the second quarter), the... MORE

Budget Analysis

Fiscal Policy
Arnold Kling
The Washington Post lead editorial for August 29 adjusts the baseline budget forecast for several factors. The largest is discretionary spending, which they argue will grow at the rate of the economy rather than at the rate of inflation. The... MORE

Academia vs. Reality

Economics of Education
Arnold Kling
I probably need to wear an asbestos suit after posting this essay. A few years spent working in a corporate or government setting would benefit professors by giving them first-hand knowledge of organizational behavior and politics in practice. I think... MORE

Demand Too Elastic?

Microeconomics
Arnold Kling
London's congestion charge, which seemed like such a good idea from an economic perspective, may have run afoul of elastic demand, according to an article by Iain Murray. economists...estimated that a reduction in traffic of 15 percent would require that... MORE

Canadian Health Care

Economics of Health Care
Arnold Kling
Pierre Lemieux discusses the distortions in measured costs under a socialized system. Criticizing an article in the New England Journal of Medicine that reports on lower administrative costs in Canada than in the United States, he writes, Canada's long waiting... MORE

Comment of the Week, 2003-08-27

Macroeconomics
Arnold Kling
On the topic of the economic impact of the New Deal, Patrick Sullivan pointed to an interesting article by Cole and Ohanian. They make two points. One is that the recovery from the downturn of 1929-1933 was unusually weak. The... MORE

Did the Bush Tax Cut Fail?

Macroeconomics
Arnold Kling
This group of economists with strong Democratic Party ties says that we needed fiscal policy that provided more stimulus in the short run and a lower deficit in the long run. Robert Solow says, There are three characteristics you want... MORE

Did the New Deal Fail?

Macroeconomics
Arnold Kling
Cato's Jim Powell makes the case against the New Deal. Among the material Powell cites: Richard K. Vedder and Lowell E. Gallaway, in their 1997 study Out of Work, estimated that by 1940 unemployment was eight points higher than it... MORE

Auction Toxic Waste?

Energy, Environment, Resources
Arnold Kling
How should the location of undesirable land uses, such as toxic waste dumps or prisons, be determined. Citing Julian Simon, Herbert Inhaber suggests using a reverse auction, in which the Federal government offers to compensate local residents for living near... MORE

Australia's Economic Miracle

Growth: Causal Factors
Arnold Kling
Peter Gallagher links to a speech by Gary Banks, Chairman of Australia's Productivity Commission, on that country's high productivity growth of the past several years. He credits improvements in policy. As you know, the reforms really began with the lowering... MORE

Libertarian Manifesto

Growth: Consequences
Arnold Kling
Irving Kristol recently wrote a neoconservative manifesto. It is hopeful, not lugubrious; forward-looking, not nostalgic; and its general tone is cheerful, not grim or dyspeptic. Its 20th-century heroes tend to be TR, FDR, and Ronald Reagan. Such Republican and conservative... MORE

Comment of the Week, 2003-08-20

Economics of Health Care
Arnold Kling
This week I got some well-deserved pushback on a couple of posts. Peter Gallagher was not impressed with the story of robots and comparative advantage. (Update: Gallagher posted a new comment with a more favorable interpretation of the robot example.)... MORE

Economics of Outsourcing

International Trade
Arnold Kling
Brad DeLong makes another attempt to explain the economics of outsourcing. Remember: few would be worried about "outsourcing" if the U.S. unemployment rate were still close to four percent, rather than at the above six percent level that it is.... MORE

Electricity Economics

Energy, Environment, Resources
Arnold Kling
In the wake of the electricity blackout, I have been disappointed that economists have contributed more noise than signal in their comments. For example, Paul Krugman wrote, Under the old regulatory system, power companies had strong incentives to ensure the... MORE

Robots and Comparative Advantage

International Trade
Arnold Kling
Using the theory of comparative advantage, James Miller explains why robots cannot replace humans completely. Now, assume that in our simple wine/cake world robots begin large-scale manufacturing. They could easily change the relative prices of wine and cake. Perhaps if... MORE

Consensus Macroeconomics?

Monetary Policy
Arnold Kling
Milton Friedman describes the consensus in macroeconomics as having moved in his direction. That Keynesian vision was thoroughly discredited by experience in the '70s and '80s. It has since been replaced by what has become known as New Keynesian Economics,... MORE

Benefits of Health Care Spending

Economics of Health Care
Arnold Kling
Does America spend too much on health care? Has health care been immune to productivity increases and contracted Baumol's cost disease? David Warsh has some answers. "cost disease" is mostly bunk — because it relies on measures of input prices... MORE

Labor Supply and Demand

Microeconomics
Arnold Kling
About a year ago, the big story in our local suburban newspaper was the adoption of a "living wage" bill in our county. This summer, the big story was the shortage of teenage jobs here. I was tempted to write... MORE

Co-operation Hormone?

Behavioral Economics and Rationality
Arnold Kling
Paul Zak reports on measuring the level of the hormone oxytocin in experimental subjects after they have played a game involving trust and co-operation. People were recruited and paid $10 for showing up. Then they took seats in a large... MORE

Trade Deficit a Concern?

International Trade
Arnold Kling
To what extent is the large trade deficit reported for the U.S. a cause for concern? In my Bubbleheads essay a couple months back, I discussed some of the fears about the deficit and the apparently-overvalued dollar. Brad DeLong wonders... MORE

Productivity and Labor Utilization

Macroeconomics
Arnold Kling
Brad DeLong has influenced my thinking on the current state of the economy. In a recent post where he looks at data on output relative to hours worked, he writes, CEA Chair Greg Mankiw said last week that the 3.5%... MORE

I'll be back on August 17. Meanwhile, the comment threads remain open.... MORE

Is the Recession Over?

Macroeconomics
Arnold Kling
I say that the recession continues, according to an indicator of capacity utilization in the labor market. From March of 2001 through November of 2001 -- the respective dates for the beginning and the end of the recession, according to... MORE

Information Goods and Income Distribution

Information Goods, Intellectual Property
Arnold Kling
James Miller has an interesting thesis concerning information goods. Since most of the cost is up-front research and development, he argues that these goods will be priced attractively for mass consumption. As easily copied informational goods become more important to... MORE

Comment of the Week, 2003-08-06

Economics of Education
Arnold Kling
On the continuing lively discussion of school vouchers, Boonton writes, The graduates of those 'horrible' [American public] schools went on to build not only an economic boom but one with heavy concentration in knowledge industries. This is the exact opposite... MORE

Health Care Reform

Economics of Health Care
Arnold Kling
The pundits seem to be more radical than the politicians these days. The Washington Post's Steven Pearlstein writes, First, in a rich country with an employer-based system, firms should have to provide a basic health insurance plan to all employees... MORE

Steven Levitt

Microeconomics
Arnold Kling
The New York Times profiles Steven Levitt, the recent Clark Medal winner. Using data from more than 50,000 home sales in Cook County, Ill., he compared the figures for homes owned by real-estate agents with those for homes for which... MORE

China Menace?

International Trade
Arnold Kling
The Washington Post's Steven Pearlstein warns about China, now on the fast track to becoming a dominant player in the global economy and causing major disruptions along the way. Here in the United States, entire industries are being quickly wiped... MORE

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