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Bryan Caplan: July 2012

An Author Archive by Month (35 entries)

Nominal Rigidity of What?

Behavioral Economics and Rationality
Bryan Caplan
During recessions, hourly pay for realtors and salesmen falls rapidly.  Even if they're largely paid on commission, their unemployment still spikes.  Doesn't this show that blaming unemployment on nominal wage rigidity is misguided?I think not.  Labor markets for realtors and... MORE

An Ode to Milton Friedman

Economic Education
Bryan Caplan
Today would have been Milton Friedman's 100th birthday.  I only met the man long enough for him to sign my copy of Capitalism and Freedom, but he's been a tremendous influence on me.  All of my other adolescent intellectual heroes... MORE

Bill Dickens on Me on Poverty: A Rejoinder

Behavioral Economics and Rationality
Bryan Caplan
One of my great privileges is to have a mentor and critic as good as Bill Dickens.  And truth be told, the best criticism of a project is early criticism.  Here's my reaction to his initial critique of Poverty: Who... MORE

Bill Dickens on Me on Poverty

Behavioral Economics and Rationality
Bryan Caplan
The noble Bill Dickens responded on Facebook to my recent posts on poverty.  Reprinted with his permission.  My rejoinder is coming shortly.@Bryan Before you get too heavily into this new book, what happens in countries with more generous social welfare... MORE

IGM, Economic Consensus, and Partisan Bias

Behavioral Economics and Rationality
Bryan Caplan
Justin Wolfers staunchly defends a view I've long been pushing: economists agree to a shocking extent.  If you follow the economic policy debate in the popular press, you would be excused for missing one of our best-kept secrets: There's remarkable... MORE

The Fallacy of Dulling the Pain of Poverty

Behavioral Economics and Rationality
Bryan Caplan
Why are the poor more likely to abuse drugs and alcohol?  As a matter of dollars and cents, substance abuse should rise, not fall, with income.  These habits are expensive, both directly and indirectly.  Directly: Drugs and alcohol cost money. ... MORE

What Did You Learn in Business School?

Economics of Education
Bryan Caplan
Question for readers with business degrees (A.A., B.A., M.B.A.): How much of what you learned in your business coursework do you actually apply in your business career?  Please give details.... MORE

Poverty and Behavior: Generalizing Yglesias

Behavioral Economics and Rationality
Bryan Caplan
Last week, Matt Yglesias had an extremely insightful critique of the view that unemployment remains high because "we are not as wealthy as we thought we were": It is both true that we are not as wealthy as we... MORE

Arnold's Hypotheticals

Behavioral Economics and Rationality
Bryan Caplan
I agree with Arnold's analysis of all three of his hypotheticals.  But I doubt Capital One's sales pitch was analogous to:I tell you that a tree is about to fall on you, but if you give me all the money... MORE

Popular Resistance to Cost-Effectiveness Research: Two Stories and a Challenge

Behavioral Economics and Rationality
Bryan Caplan
Measuring the cost-effectiveness of medical treatment seems unpopular - especially among conservatives.  Why would this be?  I have two stories - one fairly charitable, the other not so charitable.The charitable story.  Many people - even people who strongly favor heavy... MORE

The Relevance of the Religious Hypothetical

Behavioral Economics and Rationality
Bryan Caplan
Consider two contrasting arguments against a policy rationale:1. Your rationale could conceivably be abused for bad ends.2. Your rationale supports many policies you yourself oppose.Arnold seems to think that my religious objection to his consumer protection views (here, here, and... MORE

The Upper Hand Heuristic

Cross-country Comparisons
Bryan Caplan
As Adam Smith explains, treating other people well is often in our narrow self-interest: It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own... MORE

Would Arnold Support an RFPB?

Behavioral Economics and Rationality
Bryan Caplan
The world's competing faiths subscribe to mutually incompatible doctrines - including doctrines about how to avoid eternal suffering in the afterlife.  One of these faiths could conceivably be true.  But no more than one.  If there are X incompatible views,... MORE

In a fascinating debate, Peter Thiel challenges Google's Eric Schmidt:Google is a great company.  It has 30,000 people, or 20,000, whatever the number is.  They have pretty safe jobs.  On the other hand, Google also has 30, 40, 50 billion... MORE

Social Darwinism vs. the Economic Way of Thinking

Cost-benefit Analysis
Bryan Caplan
David Gordon has a fascinating piece on Social Darwinist defenses of capitalism:[I]t is difficult to find writers who called themselves "social Darwinists." But some of Obama's critics have gone too far. Jonah Goldberg, e.g., treats social Darwinism as largely a... MORE

How I Love Education

Economic Philosophy
Bryan Caplan
When I write about education, I suspect I come off as a philistine.  You might even boil my position down to: "Students are bored, and aren't acquiring job skills, so their education is a waste of time and money."  But... MORE

The Contributions of William T. Dickens

Behavioral Economics and Rationality
Bryan Caplan
Tyler and Arnold have written engaging retrospectives on their Ph.D. cohorts at Harvard and MIT.  But I'd rather discuss the contributions of Arnold's classmate - and my undergraduate Econ 1 professor - William T. Dickens.  Arnold's right to say:Bill Dickens... MORE

Sumner's Common Sense

Behavioral Economics and Rationality
Bryan Caplan
In a post that officially attacks "common sense," Scott Sumner shows that he possesses a great deal of it.  Don't believe that nominal wage rigidity can explain continuing high unemployment?[W]age stickiness is a much bigger problem when inflation is low,... MORE

Arnold on the Current State of Computers in Education

Economics of Education
Bryan Caplan
Arnold writes:Here is how I size up the current state of computers in education: My reactions, point by point:1. Note that in the music industry, the Internet has put record stores out of business. It has not put composers and... MORE

I'm Telling

Labor Market
Bryan Caplan
Alex Tabarrok suggests that sexual harassment is analogous to employee theft.  If this were so, however, victims of harassment would have an ridiculously easy remedy for their woes: Tell the boss.  When an employee tattles on a co-worker for stealing,... MORE

What Would Efficient Sexual Harassment Law Look Like?

Economics and Culture
Bryan Caplan
In a post I otherwise applaud, Alex Tabarrok presents an efficiency defense of sexual harassment law: What the theory and the empirical results are saying is that people exposed to a higher risk of sexual harassment are paid more, just as people... MORE

My recent post on online education specifies:When I talk about "online education," I don't just mean students at existing brick-and-mortar colleges taking some classes from their dorm rooms.  I mean students enrolling in virtual colleges instead of physical colleges.Tyler objects:I... MORE

A Controversial Issue Resolved With Econometrics

Economic Methods
Bryan Caplan
In answer to David's challenge to name "one controversial issue that had been resolved with econometrics," I nominate the self-interested voter hypothesis - the idea that voters maximize their narrow self-interest.  While many people - scholars included - take this... MORE

A One-Penny Proof

Microeconomics
Bryan Caplan
I recently tweeted:In social science, the best arguments prove more than the best studies. Hands down.Here's one homely example of what I have in mind.When economists explain marginalism, students often object, "But surely no one ever changes his behavior over... MORE

From the latest draft of The Case Against Education:The permanent residents of the Ivory Tower often congratulate themselves for broadening students' horizons.  For the most part, however, "broaden" means "expose students to yet another subject they'll never use in real... MORE

Tipping, Status, and Signaling

Microeconomics
Bryan Caplan
Everything Arnold says about status goods and tipping points holds for signaling as well.  It's theoretically possible for bizarre new equilibria to emerge:Something that is a status good in one era can be the opposite in another. Think of smoking,... MORE

Kahneman on the Crash

Behavioral Economics and Rationality
Bryan Caplan
Daniel Kahneman's view of the 2008 crash is eerily similar to my own:Many people now say they knew a financial crisis was coming, but they didn't really. After a crisis we tell ourselves we understand why it happened and maintain... MORE

Amazon put Borders out of business.  Is online education going to do to the same to brick-and-mortar colleges?*  Reflecting on earlier conversations with Arnold, I've realized that there are three competing perspectives with three competing predictions.Perspective #1: Human capital model. ... MORE

A People's History of American Empire mentions that former South Vietnamese prime minister Nguyen Cao Ky was an open admirer of Hitler.  Intrigued, I decided to investigate.  The charge checks out.  Exact quote:"People ask me who my heroes are. I... MORE

Savings, Genes, and Fade-Out

Family Economics
Bryan Caplan
Parenting often has large effects on the young.  Parents do stuff, their kids respond, and observers conclude that parenting is very important.  You need twin and adoption methods to uncover the crucial caveat: these parenting effects usually fade-out.  Kids aren't... MORE

Jersey Shore, Emily Whitehurst, and Merit

Economics and Culture
Bryan Caplan
I've repeatedly argued that economic success and merit are moderately positively correlated.  In plain English: Talented people who work hard usually enjoy considerably higher income and status.  I hasten to add that in a free market, this correlation would be... MORE

Yesterday I stumbled across a obscure experiment in open borders.  Under the 1954 Geneva Accords, the Vietnamese were explicitly given 300 days to freely migrate between the Communist north and the non-Communist south.  As Wikipedia explains:The agreements allowed a 300-day... MORE

Optimal Openness

Economic Methods
Bryan Caplan
There's something very appealing about Arnold's praise of thinkers who try to open readers' minds instead of closing them:Suppose we look at writing on issues where people tend to hold strong opinions that fit with their ideology. Such writing can... MORE

Tyler writes:Their "simps" think they should have done better.  In their own, unconstrained models of the world, they each wish they could be doing better.  They each have refused to "do better" out of an understanding of limited institutional and... MORE

The Party Line Continuum

Economic Methods
Bryan Caplan
Two veterans of the Council of Economic Advisors object to my claim that political appointees have to toe a party line.Jeff Frankel:Bryan, When I was a Member of President Clinton's Council of Economic Advisers, I never said anything I didn't... MORE

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