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Bryan Caplan: January 2012

An Author Archive by Month (35 entries)

Arnold and Education: Getting to Bet

Economics of Education
Bryan Caplan
Arnold counter-offers to my proposed education bet.  Arnold's in blockquotes.I'd prefer to stretch out the time frame at least a few years. Maybe let's pick 5 indicators, and winning means at least 3 out of 5.Fair enough, though it does... MORE

Name Michael Huemer's New Book

Books: Reviews and Suggested Readings
Bryan Caplan
Philosopher Michael Huemer has almost finished a book-length defense of radical libertarianism.  I've read virtually every book ever written on this topic.  Huemer's is the best.  It's so good, in fact, that I've promoted him from my "favorite living philosopher"... MORE

Bet for Arnold: Education Is Stably Wasteful

Economics of Education
Bryan Caplan
I've already bet David Henderson that the percent of 18-24 year-olds in traditional 4-year colleges will decline no more than 10% by 2019.  Now Arnold tempts me to double down:I see the potential for a dramatic reduction in the labor... MORE

Social Capital, Property Values, and Salam

Economic Philosophy
Bryan Caplan
Reihan Salam replies to my case for free immigration, emphasizing the importance of "social capital":It is possible that cash transfers are the most appropriate vehicle for addressing problems that stem from cultural and economic isolation and family breakdown, but my... MORE

Why Should We Restrict Immigration?

Economic Philosophy
Bryan Caplan
The Cato Journal's special immigration issue is now out.  I have the lead article, entitled "Why Should We Restrict Immigration?"  My piece sums up everything I've been saying about immigration since I joined the blog: (a) Common-sense morality implies a... MORE

Discontinuity and the Real World

Labor Market
Bryan Caplan
Arnold writes:So, if the demand for mortgages collapses, all it takes to get back to 2006 levels is for mortgage underwriters to take a 20 percent pay cut? In a world with no discontinuities, we would not get crazy subprime... MORE

Wing-Walking Revisited

Labor Market
Bryan Caplan
Arnold writes:Suppose that a bunch of mortgage underwriters get laid off. There are two possible full employment equilibria. (a) They can be instantly employed as dishwashers at 20 cents an hour. (b)They can be employed as health insurance claims processors... MORE

Next week, I'm going to debate Modeled Behavior's Karl Smith on "How Deserving Are the Poor?"  Logistics:Date: Wednesday, February 1Time: 6:00-9:00 PMLocation: Johnson Center Meeting Room A, George Mason University (Fairfax Campus)My strategy, as usual, is to use an uncontroversial... MORE

Nominal GDP and PSST

Macroeconomics
Bryan Caplan
Arnold tells us:The PSST story is equally consistent with a correlation between employment and nominal GDP. It just interprets the causality as running the other way. If a bunch of workers are laid off, for whatever reason, nominal GDP will... MORE

Murray's Blind Spots

Books: Reviews and Suggested Readings
Bryan Caplan
I'm an admirer of Charles Murray's Coming Apart.  But two big blind spots stand out:1. Drugs.  Murray chronicles the massive increase in the U.S. prison population without mentioning, much less condemning, the War on Drugs.  [S]urveys on drug use wouldn't... MORE

Antitrust Kills

Cost-benefit Analysis
Bryan Caplan
Since 2007, Bill Gates has given away $28B, 48% of his net worth.  Frugal Dad estimates that he's saved almost 6 million lives.  I haven't double-checked his sources, but it's a plausible estimate.Back in the nineties, Bill Gates was experiencing... MORE

For males, the college premium and the marriage premium are roughly equal.  In the NLSY, for example, you earn 34% more if you're a college grad, and 44% more if you're a married male*: When people - economists and non-economists... MORE

Quiggin on the Caplan-Quiggin Bet

Economic Methods
Bryan Caplan
In 2009, I bet John Quiggin that Europe's unemployment would average at least 1.5 percentage-points higher than the United States over the following decade.  Quiggin's update:Until now, I've been consistently ahead. EU-15 and US unemployment rates were very close during... MORE

The Present Value of a Sheepskin

Economics of Education
Bryan Caplan
When economists measure the return to education, they usually assume that all years of schooling increase earnings by the same percent.  A standard regression would be:log (Earnings in dollars)= a + b*(Education in years)where b is the measured return to... MORE

The aptly-named Institute for Justice is challenging another democratic achievement: Regulations requiring useless expenditures.May the government force entrepreneurs to do useless things, like build extra rooms in their stores that they do not need and will never use, just to... MORE

Tell Me the Difference Between My Lai and Hiroshima

Economic Philosophy
Bryan Caplan
In the My Lai Massacre, a company of American ground troops killed between 347 and 504 unarmed Vietnamese civilians in a village suspected of harboring Communist guerrillas (the VC).  After the massacre became public knowledge, Captain Ernest Medina denied giving... MORE

Tyler's Embarrassing Question and Major Concession

Economics of Education
Bryan Caplan
Tyler's has renewed our debate about signaling (see here for earlier rounds):It is an embarrassing question for signaling models to ask: with what lag do employers get a good estimate of a worker's marginal product?  If you say "it takes... MORE

Great Stagnation or Great Vacation?

Labor Market
Bryan Caplan
Keynesians have long mocked their critics as people who believe that the Great Depression was really a "Great Vacation."  Charles Murray's new book makes a decent case that working class men have indeed taken a Great Vacation over the last... MORE

An Optimist's Take on Charles Murray's Coming Apart

Income Distribution
Bryan Caplan
On Friday, I read Charles Murray's new book, Coming Apart: The State of White American, 1960-2010, cover to cover.  Murray's given the world another social science page turner, written with earnest eloquence and full of fascinating information.  His main claim:... MORE

Real Real GDP

Growth: Causal Factors
Bryan Caplan
Gross Domestic Product is staunchly atheoretical.  If someone spends money on X, X is GDP - even if "someone" is Congress, and X="a bridge to nowhere."  There are exceptions; most notably, the stats supposedly exclude "intermediate goods" to avoid double... MORE

Planets, Life, and the Fermi Paradox

Economic Methods
Bryan Caplan
Since junior high, I've believed that the galaxy is full of planets and intelligent life.  But it wasn't until I was in my thirties that I heard of the Fermi Paradox.  You can boil the paradox down to a sentence:... MORE

Give Me A Dozen Examples

Behavioral Economics and Rationality
Bryan Caplan
People often estimate probabilities based on how easy it is to think of examples.  Tons of examples pop into your head: High probability.  Zero examples come to mind despite brow-furrowing: Low probability.  This is known as the "availability heuristic."  I've... MORE

The Demented Pacifism of Irving Fisher

Economic Philosophy
Bryan Caplan
On July 15, 1915, the New York Times ran an interview with legendary economist Irving Fisher.  His response to the Great War was staunchly pacifist:After this war is over, of course, Europe will find herself prostrated economically, by the destruction... MORE

Return to "What Could President Paul Actually Do?"

Politics and Economics
Bryan Caplan
I was going to write a post called "What Could President Paul Actually Do?" until I realized I already wrote it four years ago.  Since it still seems current, I'm reposting it instead: What would happen if Ron Paul actually... MORE

Eureka! Economic Illiteracy as Mental Substitution

Behavioral Economics and Rationality
Bryan Caplan
Here's another revelation from Kahneman's Thinking, Fast and Slow, from his chapter on "Answering an Easier Question."  The lead-in:A remarkable aspect of your mental life is that you are rarely stumped.  True, you occasionally face a question such as 17... MORE

Kahneman, Mental Effort, and the Scary Parole Study

Behavioral Economics and Rationality
Bryan Caplan
Critics of The Myth of the Rational Voter often attack it as psychologically implausible.  (See especially Bennett and Friedman's critique in Critical Review).   If, as I maintain, rationality responds to incentives, doesn't this mean that people make conscious decisions... MORE

"Economic growth seems like an extremely good thing.  But growth could have undesirable side effects so severe that growth is actually bad."  This position is totally reasonable - and totally uninteresting.  Could?  Could?!  If something seems extremely good, you need... MORE

How Egalitarianism Increases Inequality

Income Distribution
Bryan Caplan
All else equal, people in respected professions make less money.  The mechanism is simple:1. People like to be respected.2. People know that if they enter a respected profession they will personally enjoy more respect.3. This increases the supply of people... MORE

Democracy: Worse Than I Thought

Political Economy
Bryan Caplan
The main problem with democracy, I keep arguing, is that harmful policies reliably win by popular demand.  But there are exceptions.  Take Obamacare.  It appears to be genuinely unpopular.  But not only did Obama pass it; it's now very likely... MORE

Macaulay on Signaling

Economics of Education
Bryan Caplan
Probably the most eloquent passage on the signaling model of education I've ever encountered, from Thomas Macaulay's Government of India:It is proposed that for every vacancy in the civil service four candidates shall be named, and the best candidate selected... MORE

Correction on the Swedish Consequentialism Study

Economic Philosophy
Bryan Caplan
In the comments, Olof Johansson-Stenman points out an error in my post on his consequentialism study:The third choice alternative is actually not "The extent to which the action infringes upon someone else's NATURAL rights" but simply "The extent to which... MORE

Back in 2009, before Obamacare became the law of the land, I pointed out its disemployment effects, and criticized Krugman for failing to consider them during a serious recession.  Me:The Krugman we've got is sold on the House health bill. ... MORE

Sins of Omission: What's Wrong With Gruber's Health Care Reform

Books: Reviews and Suggested Readings
Bryan Caplan
Given my interest in health economics and graphic novels, I was initially hopeful about Jonathan Gruber's graphic novel, entitled Health Care Reform: What It Is, Why It's Necessary, How It Works.  But in all honesty, the book is awful.  Gruber... MORE

Kahneman, Greed and Success

Income Distribution
Bryan Caplan
I just finished Daniel Kahneman's Thinking, Fast and Slow.  The book is a masterpiece.  Most popular science books are 10% substance, 90% fluff.  Kahneman reverses those percentages - yet remains a breezy joy to read.  Thinking taught me much about... MORE

Correcting For Ability Bias By Measuring Ability

Economics of Education
Bryan Caplan
There are two conceptually distinct problems with standard estimates of the return to education (see here, here, and here for more).Problem #1: Ability bias.  People with traits the labor market values (intelligence, work ethic, conformity, etc.) tend to get more... MORE

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