Bryan Caplan and David Henderson

Arnold Kling: October 2004

An Author Archive by Month (35 entries)

Nanotechnology and the Economy

Growth: Causal Factors
Arnold Kling
Ronald Bailey reports, Nanotechnology would make it possible for 100 billion people to live sustainably at a modern American standard of living, while indoor agriculture using high-efficiency inflatable ten-pound diamond greenhouses would help restore the world's ecology. The ultimate limit... MORE

Cost of Health Care Regulation

Economics of Health Care
Arnold Kling
Christopher J. Conover has attempted to estimate the total cost imposed by legal and regulatory distortions of health care, by synthesizing previous studies of individual issues. The analysis suggests that the total cost of health services regulation exceeds $339.2 billion.... MORE

Economists' Voice on Fiscal Policy

Fiscal Policy
Arnold Kling
The second issue of The Economist's Voice has appeared, and it looks more interesting than the first. Several articles discuss fiscal policy. William G. Gale and Peter R. Orszag write, Looking beyond the next decade, the budget outlook grows steadily... MORE

Social Security Myths

Social Security
Arnold Kling
My latest essay on Social Security says, The transition cost myth is one of four Social Security misconceptions that I want to address here. The others are the misconception that Social Security is a pension, the misconception that the Baby... MORE

Health Care

Economics of Health Care
Arnold Kling
Ron Bailey writes, we have a system skewed toward overuse by the haves and underuse by the have-nots, in which the healthiest people (highly paid employees) get the most generous health insurance. The Kaiser Commission reported that per capita spending... MORE

Cost of Digital Storage

Information Goods, Intellectual Property
Arnold Kling
Phil Bowermaster looks at the cost of storing all of the books in the Library of Congress catalog. The initial scanning work is the only part of the plan that's likely to present much of an expense factor. According to... MORE

Rank-order Multiple Choice

Economic Education
Arnold Kling
Teaching a class with 90 students gives me a newfound appreciation of multiple-choice tests. One of my objections to them has been that questions are not robust, in that students' answers may not reflect their knowledge. My concern is that... MORE

Prescott on Tax Cuts

Supply-side Economics
Arnold Kling
In this essay, I explain 2004 economics Nobel Laureate Edward Prescott's views that the Bush tax cuts were too small. Prescott re-casts the trade-off as between "market time" and "non-market time." In addition to TV and Bon-Bons, you spend some... MORE

Fama vs. Thaler

Efficient Markets Hypothesis
Arnold Kling
Stephen Bainbridge judges the contest. As for regulators, because the ECMH [Efficient Capital Markets Hypothesis] is often brought to bear as a justification for deregulation in politically charged policy disputes, such as mandatory corporate disclosure and insider trading, those who... MORE

Drug Prices

Economics of Health Care
Arnold Kling
Can we lower drug costs by importing from Canada? Perhaps not, according to this story. Canadians must stop Americans from using Internet pharmacies to raid its medicine chest or face a drug shortage, a coalition of Canadian groups representing seniors,... MORE

Inelastic Demand for Gasoline

Energy, Environment, Resources
Arnold Kling
A company called CNW marketing research offers a timely study, as reported on CNN Money. It would take gasoline prices hitting a sustained $2.75 a gallon to get 19 percent of those surveyed thinking about a more fuel-efficient vehicle; another... MORE

Social Security Arithmetic

Social Security
Arnold Kling
Tyler Cowen points to the Bruce Webb comment on Brad DeLong's post on Social Security. Webb says, in part If privatization will work, it won't be necessary. If privatization will be necessary it won't work. And exactly no one has... MORE

Dollar Bubble

International Macroeconomics: Exchange Rates, International Debt, etc.
Arnold Kling
Brad DeLong continues to predict a crash for the dollar. Japan, China, and other export-oriented East Asian economies are indeed eager to keep the value of the dollar relatively high, and their central banks have piled up close to $2... MORE

Vaccine Shortage

Regulation and Subsidies
Arnold Kling
Russ Roberts has been all over the vaccine shortage story. In one post among many, he asks, Normally when there's uncertainty about demand, price rises to compensate suppliers for the extra risk. And consumers are happy to pay that higher... MORE

Omniscient Voyeur

Arnold Kling
Peter Gordon looks at a happiness survey that purportedly shows that the United States is only 15th in the world. Those of us afflicted with revealed preference thinking might reflect on the fact that, in just the last few years,... MORE

Energy Price Outlook

Energy, Environment, Resources
Arnold Kling
Are high oil prices a temporary spike, caused by the evil oil cartel? Or are they a reflection of dwindling oil supplies? I'd like to hear from Lynne Kiesling on this. Meanwhile, here are my hunches. First of all, I... MORE

The Budget Debate

Social Security
Arnold Kling
Jagadeesh Gokhale and Kent Summers. point out that for entitlement programs, "pay as you go" is actually bad Budget policy. Pay-as-you-go in this context usually implies benefit increases -- for which retirees obviously don't pay -- and tax increases for... MORE

Free-Market Health Care?

Economics of Health Care
Arnold Kling
Could we have free-market health care? I suggest that it requires two reforms. On the demand side, I propose event reimbursement in health insurance instead of procedure reimbursement. On the supply side, I propose reputation systems instead of credential-based regulation.... MORE

Oil: Marginal vs. Average Cost

Energy, Environment, Resources
Arnold Kling
The Washington Post's Steven Pearlstein needs to learn the difference between marginal cost and average cost. Without some miracle breakthrough like controlled fusion, energy independence is unattainable, probably undesirable and discussion of it avoids the real question of why the... MORE

Outsourcing

International Trade
Arnold Kling
Bruce Bartlett surveys recent cost-benefit analysis. In July, economist Martin N. Baily, chairman of the Council of Economic Advisers under President Clinton, looked at who benefits from outsourcing. He found that... on balance, the U.S. economy gains $1.12 to $1.14... MORE

Kydland and Prescott win Nobel

Macroeconomics
Arnold Kling
This year's Nobel Prize in economics was awarded to Finn E. Kydland and Edward C. Prescott for their work on time inconsistency of economic policy and real business cycles. The press release describes these discoveries as If economic policymakers lack... MORE

Tournament Ranking of Colleges

Economics of Education
Arnold Kling
Christopher Avery, Mark Glickman, Caroline Hoxby, and Andrew Metrick use a chess-rating methodology to rank colleges. If a student admitted to both Harvard and Yale selects Harvard, then that is a "win" for Harvard. The schools that rank at the... MORE

Campaign Season Economics

Politics and Economics
Arnold Kling
My latest essay says that it's not pretty. Democratic candidate Senator John Kerry managed to appeal to all four of the economically ignorant biases identified in Caplan's paper. You could say that Kerry hit the economic illiteracy quadrifecta! ...it is... MORE

Exuberance

Growth: Causal Factors
Arnold Kling
People with what Bryan Caplan calls "pessimistic bias" see the world in zero-sum terms, or worse. Kevin Brancato points out a pattern in Bill Gates' thinking that is just the opposite: "China and India are the big change agents for... MORE

Nonlinear Thinking

Growth: Consequences
Arnold Kling
Mark Bahner writes, So we have "the economic literature" with a per-capita GDP mean value in 2100 of $22,900, versus Arnold Kling saying over--way over, in fact!--$20,000,000. What in the world is going on?! Is Arnold Kling a lunatic or... MORE

Entrepreneurs and "giving back"

Growth: Causal Factors
Arnold Kling
Tim Worstall comments on a paper by William Nordhaus on the private vs. social returns of innovation. As a factor of production, the entrepreneur class (and yes, we have been considered for decades to be a factor of production to... MORE

All Holes, No Cheese?

Tax Reform
Arnold Kling
Steven Pearlstein reports on your elected representatives at work this election year. Congress was unveiling the final details of a corporate tax bill so laden with subsidies, and so infused with government industrial policy, that any Eurocrat would be proud... MORE

Publication Tournament?

Economic Education
Arnold Kling
If I think that economics students should be given ratings like tournament chess players, then naturally I would like this suggestion from David Tufte for evaluating academic research, maintaining quality, and speeding up the process. Send 2 papers to an... MORE

Trade Conference

International Trade
Arnold Kling
I attended most of this Cato Institute Conference on trade, outsourcing, and the labor market. A few notes: Federal Reserve Board Vice-Chairman Roger Ferguson's opening speech was outstanding. I commend it to anyone who teaches undergraduate economics as a useful... MORE

Revolution in Academic Affairs?

Economic Education
Arnold Kling
Last week, I got together with Russ Roberts of Cafe Hayek. Yesterday, I had lunch with Alex Tabarrok of Marginal Revolution and two not-yet-blogging economists, Robin Hanson and Bryan Caplan. Several topics came up that are worth some comment. Economics... MORE

The Need for Savings

Social Security
Arnold Kling
In this essay, I argue that because people live longer and consume more health care, we should be saving more. Suppose that 50 years ago the expectation for a 45-year-old man was that he would live to age 70, and... MORE

Two Thoughts on Economic Education

Economic Education
Arnold Kling
First, just a technical note. A fellow named Chris Cardinale sent me a tip that software called "Total Recorder" from a web site highcriteria.com creates really small sound files from .wav files. I downloaded and registered the software, for twelve... MORE

Nobel Prize Speculation

Economic Philosophy
Arnold Kling
Various economics blogs, such as Division of Labour, are speculating on candidates for this year's Nobel Prize in economics. One thing I've noticed is that the winners tend to be people with concepts named after them. Coase theorem. Nash equilibrium.... MORE

Forced Savings vs. Social Security

Social Security
Arnold Kling
Brad DeLong endorses privatized Social Security, if what you mean by that is forced savings. Too many households are myopic: they do not save enough. Households resist increases in Social Security taxes--they see no link between the taxes and their... MORE

Oil Bubble?

Efficient Markets Hypothesis
Arnold Kling
Any time a price increases rapidly, somebody argues that there is a bubble (although I have not heard anyone proclaim a health care bubble). Here is Frank P. Leuffer on oil. IEA figures for the first half of the year... MORE

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