Bryan Caplan and David Henderson

Arnold Kling: June 2006

An Author Archive by Month (41 entries)

Divisions on Immigration

Labor Mobility, Immigration, Outsourcing
Arnold Kling
Jerry Bowyer writes, If 200 years from now America will be filled with people who know and love the ideas of Jefferson and Madison -- but these people are overwhelmingly dark skinned -- will this be good or bad? That's... MORE

Medical Technology

Economics of Health Care
Arnold Kling
Glenn Reynolds asks for my comments on a book by Andy Kessler. I'll pass on that, but speak to the general thesis that medical technology will advance rapidly in the coming years. I am generally optimistic about medical technology, but... MORE

CofA Watch

Books: Reviews and Suggested Readings
Arnold Kling
Crisis of Abundance made a list of ten "books that drive the debate" recommended by the National Chamber Foundation, a group of business leaders. The full list: 1. Illicit: How Smugglers, Traffickers and Copycats are Hijacking the Global Economy, by... MORE

Bartlett's Theory of Political Dynamics

Political Economy
Arnold Kling
Bruce Bartlett writes, The fact is that a lot of people who get into politics don't really have any ideology... Rather, their only concern is which party will give them the best chance of winning. Secondarily, they are concerned about... MORE

Trust Cues

Economic Methods
Arnold Kling
My latest essay summarizes some ideas I've been blogging about lately. An empirical argument attempts to convince you using logic and observation. A trust cue threatens you with loss of membership in a valuable group unless you take a given... MORE

Stock Indexing Empire Strikes Back

Finance: stocks, options, etc.
Arnold Kling
John C. Bogle and Burton G. Malkiel write, We concede that there is some evidence, based on numbers compiled by Ibbotson Associates, that long-run excess returns have been earned from dividend-paying, "value" and small-cap stocks -- albeit returns that are... MORE

Milton Friedman Video

Economic Education
Arnold Kling
From the 1970's, a great half-hour interview. Thanks to Robert Lawson for the pointer.... MORE

Religion as a Basis for Trust

Behavioral Economics and Rationality
Arnold Kling
I have been lucky that my last two book purchases both proved interesting--I think I saw both mentioned on Arts and Letters Daily, so it's not all luck. I have mentioned Frederick Crews' Follies of the Wise. I just finished... MORE

Privatization in India

Institutional Economics
Arnold Kling
Gurchuran Das writes, the old centralized bureaucratic Indian state is in steady decline. Where it is desperately needed -- in providing basic education, health care, and drinking water -- it has performed appallingly. Where it is not needed, it has... MORE

Popular Opinion

Economic Methods
Arnold Kling
Bryan writes, If virtually everyone just argues for whatever position he was born into, a truth-seeker should hold the gladiators for popular views to higher standards. I have a slightly different way to arrive at this position. Consider the following... MORE

If Medicare were a Country...

Economics of Health Care
Arnold Kling
Laurence J. Kotlikoff and Christian Hagist write, European critics of the U.S. health care system often focus on the private provision of health care and health insurance. Yet the more important difference between the United States and other developed countries... MORE

Challenge to Cowen and Gilbert

Behavioral Economics and Rationality
Arnold Kling
I hereby challenge Tyler Cowen and Daniel Gilbert to debate whether happiness research constitutes an empirical science. Tyler pointed to this essay by Gilbert. if the Red Sox and the Yankees were scoreless until Manny Ramirez hit a grand slam... MORE

I Hate Monetary Theory

Macroeconomics
Arnold Kling
Bryan writes, People adjust their borrowing to interest rates all the time. But cash balances? That's hard to believe. Who cares? In practice, the Fed has its famous three tools--the discount rate, the reserve requirement(s), and open market operations. In... MORE

Bryan's Right

Macroeconomics
Arnold Kling
He's right that with zero interest elasticity, the Fed could still expand the money supply. Just think of the old helicopter drop. However, I do not think that Bryan's personal money demand function is the ultimate determinant of interest elasticity.... MORE

Macroeconomists Behaving Badly

Macroeconomics
Arnold Kling
I can't believe what I've been seeing in the thread that Bryan started here and updated most recently here. So far, if this were a question on an intermediate macro test, nobody gets full credit.... MORE

Empiricism and Global Warming

Energy, Environment, Resources
Arnold Kling
I am reading Frederick Crews' The Follies of the Wise, which collects essays he has written over the years attacking creationists, UFO believers, Freudians, and others. The common thread is his unrelenting empiricism. Greg Mankiw exposed my skepticism on Global... MORE

Jason Furman x 2

Economics of Health Care
Arnold Kling
I had never heard of Jason Furman until today, when I encountered him twice. First, he shows up on Greg Mankiw's blog, where Greg touts this paper. In fact, if we turned our irrational health tax subsidies right-side up–by curbing... MORE

Carbon Tax Club?

Energy, Environment, Resources
Arnold Kling
Greg Mankiw asks everyone to join what he calls The Pigou Club, by which he means economists who favor carbon taxes or gasoline taxes. The idea is that instead of taxing stuff that we want more of--work, saving, risk-bearing--we should... MORE

The Future of Mass Media

Information Goods, Intellectual Property
Arnold Kling
Jim Pinkerton writes, Every country with ambitions on the international stage will soon have its own state-supported media. ...In addition, around the world, states will want to "help" their media. Not satisfied with what the free market is bringing about,... MORE

Errors in Charitable Giving

Behavioral Economics and Rationality
Arnold Kling
Tyler Cowen reports on some disturbing research. For example, Donors to charities, it seems, do not behave rationally. Increasing evidence shows that donors often tolerate high administrative costs, fail to monitor charities and do not insist on measurable results Tyler... MORE

Take the Test

Political Economy
Arnold Kling
I have a test to see whether you are a conservative. It has six questions. For example, Do you believe that the flaws and imperfections of human beings are reflected in government? See how you do.... MORE

A Simple but Revolutionary Investment Idea

Finance: stocks, options, etc.
Arnold Kling
Jeremy Siegel writes, Fundamental indexation means that each stock in a portfolio is weighted not by its market capitalization, but by some fundamental metric, such as aggregate sales or aggregate dividends. Like capitalization-weighted indexes, fundamental indexes involve no security analysis... MORE

I am not an IQ-ist

Income Distribution
Arnold Kling
I think of Bryan as an IQ-ist. To me, IQ-ism is the doctrine that IQ determines many things in life, including income and health. I take the view that cultural and emotional factors matter. On cultural matters, see Judith Harris'... MORE

I am not a Populist

Political Economy
Arnold Kling
Bryan asks, Arnold, do you really think that Miron's proposals would appeal to a majority of Americans? Raising the retirement age to seventy? It depends on how the issue is framed. When Al Gore framed it during his acceptance speech... MORE

Global Warming and Model Dependence

Energy, Environment, Resources
Arnold Kling
J.S. at Environmental Economics writes, We all are aware of the well-funded campaigns to discredit the science of global warming, and I’m the last one who wants to add more uncertainty to the mix. He points to this set of... MORE

Net Neutrality, Again

Regulation and Subsidies
Arnold Kling
Tim Swanson has a set of links, including one to wise essay by Martin Geddes. Network neutrality makes competition and consumer welfare dependent on law and lobbying, not natural competition. So you’ve chosen the area in which the telcos are... MORE

Outside-the-Beltway Mentality

Fiscal Policy
Arnold Kling
Jeff Miron proposes spending cuts, The grand total from this list is $300 billion annually, roughly the deficit projected for 2006. Normal economic growth would therefore mean surpluses in the near future, should these cuts occur. To deal fully with... MORE

Wisdom of Crowds?

Behavioral Economics and Rationality
Arnold Kling
I really like this Jaron Lanier essay. The collective is more likely to be smart when it isn't defining its own questions, when the goodness of an answer can be evaluated by a simple result (such as a single numeric... MORE

Interviewed on Health Care

Economics of Health Care
Arnold Kling
I spoke here. one of the recommendations in the book -- and this is probably unusual from a libertarian perspective -- is that the government charter some kind of commissions analogous to what the UK has called their "National Institute... MORE

Economists Overconfident?

Behavioral Economics and Rationality
Arnold Kling
Randall Parker points to this article. [Erik] Angner, an assistant professor of philosophy at the University of Alabama at Birmingham (UAB), published a paper, “Economists as Experts: Overconfidence in Theory and Practice,” in a recent edition of the Journal of... MORE

Net Neutrality?

Regulation and Subsidies
Arnold Kling
Greg Mankiw writes, After reading these two pieces [on proposals to force Internet carriers to be "neutral"], I am inclined to give the edge to Litan, in part because his piece is more infused with economic reasoning and in part... MORE

Economic Dynamism

Cross-country Comparisons
Arnold Kling
Edmund Phelps writes, An informal cross-country analysis of those economies that I have conducted with Gylfi Zoega examined three measures of economic performance: the employment rate (relative to the working-age population), the unemployment rate (relative to labor force), and labor... MORE

Feldstein vs. Nordhaus

Energy, Environment, Resources
Arnold Kling
If you want to reduce gasoline consumption or carbon emissions, should you use a tax or tradable rights? Martin Feldstein argues for tradable gasoline rights (TGR's). The government would decide how many gallons of gasoline should be consumed per year... MORE

Class and Poverty

Income Distribution
Arnold Kling
I put my views in an essay. When people care about their own children, there is bound to be some inequality. A friend of ours has worked in his parents' store since his early teens, and he probably has averaged... MORE

Global Warming, con't

Energy, Environment, Resources
Arnold Kling
A new study says Three top climate researchers claim that the greenhouse gases already in the atmosphere should have warmed the world more than they have. The reason they have not, they say, is that the warming is being masked... MORE

My Case for Single-Payer Health Care

Economics of Health Care
Arnold Kling
In an op-ed picked up by the Providence Journal, I write, I am not among the many who believe that single-payer health care is the best solution. However, I think that an experiment with single-payer coverage [by a single state]... MORE

Global Warming Question, Con't

Energy, Environment, Resources
Arnold Kling
Here are a couple of more references on decarbonization: John Whitehead shows a trend decline of about 2 percent per year in the U.S.(we are decarbonizing faster than most of the world). Jesse Ausubel (last chart) shows a graph which,... MORE

Global Warming Question

Energy, Environment, Resources
Arnold Kling
What accounts for the relationship between total world GDP and world average temperature? For background, here is some data on GDP, from chapter 5 of Brad DeLong's Macroeconomics textbook (I did the multiplication to get the last column). yearworld population... MORE

My Rejoinder to Michael Tanner

Economics of Health Care
Arnold Kling
Cato's Michael Tanner writes, There is no doubt that Americans spend more on health care than any other country. But why is that necessarily a bad thing? There is no “right” amount to spend on health care or anything else.... MORE

A Fundamental Health Care Issue

Economics of Health Care
Arnold Kling
I call it the health gap. I wanted to believe (A), that American health care actually is more effective than international comparisons of longevity would suggest. ...Many people would like to believe (B), that Americans could receive the same health... MORE

Nation-building Debated

Institutional Economics
Arnold Kling
Max Borders makes a case that nation-building can work. What's more, while institutions can and usually do develop or evolve over time -- much in the same way that DNA evolved from auto-catalytic processes and from simpler amino acids, and... MORE

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