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Bryan Caplan: May 2013

An Author Archive by Month (25 entries)

The Subprime Crisis: Why Asymmetric Information Didn't Save Us

Behavioral Economics and Rationality
Bryan Caplan
Foote, Gerardi, and Willen's subprime manifesto is theoretically enlightening as well as empirically edifying.  Unlike many economists, they understand asymmetric information on an unusually deep level.  Standard adverse selection models suggest that the market for iffy mortgage-backed securities would never... MORE

Monetizing Job Security

Cost-benefit Analysis
Bryan Caplan
Federal workers' total compensation far exceeds that of private sector workers.  The CBO says so, and so does a large academic literature.  One glaring omission, though, is federal job security.  High job security is nice to have during normal times,... MORE

Like most people, Tyler Cowen thinks that rising high school graduation rates are good news:The nation's high school graduation rate has risen -- to 78 percent in 2010, the Education Department says in its most recent estimate. That's obviously still... MORE

Intelligence, Common Sense, and Subprime

Behavioral Economics and Rationality
Bryan Caplan
Conjecture: Financial experts' strange combination of astute calculation and elementary error on subprime lending is one of history's most important examples of the contrast between intelligence and common sense.Discuss.... MORE

Conditional Insight, Unconditional Disaster

Behavioral Economics and Rationality
Bryan Caplan
I just read Foote, Gerardi, and Willen's subprime facts manifesto.  Twice.  In the process, I learned more about the subprime crisis than I learned in the last five years put together.  If you're going to read one piece on this... MORE

Vipul Naik drew my attention to Brian's comment on my last immigration post:If you are a good libertarian, you will care only about your own freedom and well being. The freedom of others is only of concern to the extent... MORE

The Dirty Laundry of Instrumental Variables

Economic Methods
Bryan Caplan
Are instrumental variables (IV) estimates really superior to ordinary least squares (OLS)?  Most high-status empirical economists seem to think so.  Meta-analyses often treat IV as presumptively superior to OLS.  Yet when you ponder IV output, it's often simply bizarre.Rose and... MORE

"Craziness" and Immigration Policy: A Dialog with Brad Trun

Behavioral Economics and Rationality
Bryan Caplan
A while back on Twitter, I asked:Question for people who think my views on immigration are "crazy": Would the same views remain "crazy" if I were Haitian?Brad Trun, blogger at Libertarian Realist, wrote a direct and forthright reply.  Some will... MORE

How to Spend a Billion Dollars: Best Answers

Cost-benefit Analysis
Bryan Caplan
Thanks for all 115 answers to my "how to spend a billion dollars" challenge.  Two general observations:1. When you claim that X is most efficient way for the federal government to spend an extra billion dollars, you should point to... MORE

Population Externality Bleg

Cost-benefit Analysis
Bryan Caplan
Suppose a city's population exogenously rises.  You might think that price theory clearly implies that demand for real estate will rise.  But that's not so.  In theory, higher population could generate a congestion externality so awful that demand for real... MORE

Age and Common Sense

IQ in Economics
Bryan Caplan
Jim Flynn's latest book has fascinating info on age and intelligence.  But Sternberg, Wagner, Williams, and Horvath, "Testing Common Sense" (American Psychologist, 1995) suggest that Flynn misses an important part of the story.  There's a widespread perception that "common sense"... MORE

Another Inflation Bet

Economic Methods
Bryan Caplan
Arthur Breitman and I have hammered out the following inflation bet: If the 12 month change of the CPI-U as reported by the BLS is greater than 5% for any sliding window between today and December 2015 in monthly increments,... MORE

How to Spend A Billion Dollars

Cost-benefit Analysis
Bryan Caplan
My Ph.D. students' responses to the following question on their final exam disappointed me:In the modern U.S., what is the most efficient way for the federal government to spend an extra billion dollars?  What is the maximally utilitarian way for... MORE

Contrarian Virtue

Economic Philosophy
Bryan Caplan
In case it's unclear, nothing in my analysis of conformity and virtue implies that I personally am especially virtuous.  The fact that I hold many unpopular views does however mean that my virtue is unusually easy to assess.  If you... MORE

You Will Know Them By Their Unpopular Views

Behavioral Economics and Rationality
Bryan Caplan
Consider a world where 80% of people are Conformists, 10% of people are Righteous, and 10% are Reprobates.  The Conformists are epistemically and morally neutral, so they believe and support whatever is popular.   The Righteous are epistemically and morally... MORE

I was pleased to see my old friend Ben Haller challenging me in the comments on my global warming econometrics bleg.  He's in blockquotes, I'm not:The more crap you throw into the regression, the more it will be overfit and... MORE

Global Warming Econometrics Bleg

Energy, Environment, Resources
Bryan Caplan
What happens if you regress annual global temperature 1880-2011 on CO2, linear trend, and other stuff trending positively or negative over this era?  The list of regressors should ideally include not just other climatological variables, but placebo variables like church... MORE

In a Just World...

Economics and Culture
Bryan Caplan
In a just world, no researcher would be fired for truthfully stating that some kinds of immigrants have low IQs.In a just world, however, researchers would be fired for arguing that people with below-average IQs should be denied their basic... MORE

Rector, Poverty, and Immigration

Cost-benefit Analysis
Bryan Caplan
Robert Rector and Jason Richwine's new Heritage report on the fiscal effects of immigration has been widely criticized (see here, here, and here for starters).  I'm honestly surprised that the report is not worse.  Rector and Richwine may get a... MORE

Owen, Sawhill, and "the" Return to Education

Cost-benefit Analysis
Bryan Caplan
Yesterday I attended a roundtable discussion on the new Brookings brief, "Should Everyone Go to College?"  The authors, Stephanie Owen and Isabel Sawhill, succinctly document a point that labor economists routinely neglect: there ain't no such thing as "the" return... MORE

Keynesian Bets: What's Out There

Behavioral Economics and Rationality
Bryan Caplan
As far as I can tell, none of the comments on my Keynesian bet bleg point out or propose a Keynesian bet.  On Twitter, however, Noah Smith alerted me to the existence of the following Smith-DeLong bet:If, at any time... MORE

Keynesian Bets Bleg

Economic Methods
Bryan Caplan
The strongest evidence for Keynesianism, in my view, is introspection.  During the last five years, however, I've often heard Keynesians claim that their views have been vindicated by events.  To which I'm sorely tempted to respond:It's easy to claim "vindication... MORE

The Pyramid of Macroeconomic Insight and Virtue

Economic Methods
Bryan Caplan
Many of my friends laughed at Paul Krugman when he wrote: Maybe I actually am right, and maybe the other side actually does contain a remarkable number of knaves and fools.Krugman continued:The key to understanding this is that the anti-Keynesian... MORE

A Natalist Provision

Family Economics
Bryan Caplan
In Selfish Reasons to Have More Kids, I advise people to "privatize natalism."You don't have to be Bill Gates to strategically design wills, trusts, and one-shot gifts. A middle-class income is more than enough. Compared to the out-of-pocket cost of... MORE

I Was a Teenage Misanthrope

Economic Philosophy
Bryan Caplan
When I was a teenager, I viewed all of the following with antipathy: students not in honors classes, heavy metal fans, people who disliked classical music, stoners, athletes, cheerleaders, all but two of my teachers, car collectors, sports fans, smokers,... MORE

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