Bryan Caplan and David Henderson

Garett Jones: October 2012

An Author Archive by Month (22 entries)

Did Nations that Boosted Education Grow Faster?

Economics of Education
Garett Jones
No. Each dot in the graph below represents a nation: Change in education on the x-axis and change in per capita GDP growth on the y-axis.  Between the 60's and the 90's every country in this sample boosted its average... MORE

Bain Capital and the Decline of Galbraithianism

Economic History
Garett Jones
Today most serious economic observers take it for granted that creative destruction is the norm.  The rise of internet firms, the overnight demise of Enron and Arthur Andersen a decade ago, and especially the rapid turnover of the Fortune 500... MORE

In Praise of Calibration

Macroeconomics
Garett Jones
Nobelist Thomas Sargent said this, about early tests of rational expectations macro models back in the 70's: I recall [future Nobelists] Bob Lucas and Ed Prescott both telling me that those tests were rejecting too many good models. That phrase, "[T]hose tests were... MORE

Is Fiat Money a Bubble?

Money
Garett Jones
I thought the mainstream view was that fiat money was--in most mainstream theories and possibly in practice--a bubble.Jean Tirole (Econometrica, 1985) defines a bubble (it's a conventional definition among economists), and notes that Samuelson's excellent model of money fits that... MORE

The pattern of individual, decentralized human evil I've discussed in recent posts is an underappreciated argument against the welfare state.  If a substantial fraction of the people around us are money-burners and perverse punishers, how much sympathy will voters have... MORE

Why I Love the Electoral College

Public Choice Theory
Garett Jones
There's some evidence that democracy itself makes people happier, but largely I see democracy as a means to an end.  One among those ends is "reducing social conflict."  The electoral college, set forth in the U.S. Constitution, is a great... MORE

On Human Evil (Economic Experiment Edition)

Behavioral Economics and Rationality
Garett Jones
Bryan says: I'd be much more impressed by an experiment showing that subjects spontaneously try to hurt others.Actually, there are plenty of those in the experimental public goods literature.  The questions raised by these public goods experiments might be what started... MORE

You work in the market economy to buy stuff in the market economy, either now or later.  So if sales taxes are permanently high that weakens your desire to work in the market economy.  That means leisure--which government is still... MORE

"Some Men Just Want to Watch the World Burn"

Behavioral Economics and Rationality
Garett Jones
A claim confirmed repeatedly in experiments:In the destructor game, players are randomly paired and assigned the roles of destructor versus passive player. The destructor player chooses to destroy or not to destroy a share of his passive partner's earnings....15% of... MORE

"Why do Americans work so much more than Europeans?" That's the title of one of Nobelist Ed Prescott's papers.  His story has something to do with high taxes causing low employment, so you might be tempted to begin your yawning... MORE

As always, I enjoyed the hour.  Hope you do as well.I suspect it was this post that led to the invitation.  I really do believe Fisher's 1933 Econometrica article offers a more complete model of the entire business cycle process... MORE

Josh Barro, Progressive Taxation, and Public Choice

Public Choice Theory
Garett Jones
Josh Barro today claimed that the Romney tax plan can't work. The Romney plan is simple to summarize: Cut income tax rates across the board, then end enough deductions and exclusions (informally, "loopholes") to make it revenue neutral.  Plus, the Romney... MORE

At least at some Red Lobsters:The owner of Olive Garden and Red Lobster restaurants is putting more workers on part-time status in a test aimed at limiting the impact of looming health coverage requirements.Mickey Kaus's Monday prediction becomes Tuesday's news.  No surprise here,... MORE

Bailouts are for Bondholders

Public Choice Theory
Garett Jones
During the worst days of 2008, something strange happened.  During the Eight Days of Terror, the S&P 500 fell by 23% but there were no loud calls for the government to guarantee the value of stocks (Aside: TARP was signed... MORE

How to Pronounce Tiebout and More

Public Choice Theory
Garett Jones
From William Fischel's brief biography of the Connecticut-born economist. Fischel spoke with Charles Tiebout's family and friends, so this statement deserves weight: If I could offer but one contribution to his memory, let it be to induce economists to pronounce his... MORE

Bloomberg: Prime Minister Antonis Samaras compared Greeks' struggle with economic hardship and political turmoil with the conditions that led to the collapse of the Weimar Republic in post-World War I Germany and ushered in the Nazi era.Remember what Keynes thought about... MORE

From the FT: France's Socialist government has been forced into retreat by an online revolt by entrepreneurs and investors against its plans to raise capital gains taxes.It said it would review the details of its budget proposal to bring taxes on... MORE

Supermajority Rule: Buchanan, Tullock, Bernanke

Public Choice Theory
Garett Jones
Most supporters of democracy embrace the ideal of majority rule.  The great Swedish economist Knut Wicksell started from a different ideal: Unanimity.  If your idea is so great, shouldn't we all agree to it? And even if it's only a... MORE

Why the GOP is the Bigger Default Risk

Public Choice Theory
Garett Jones
Because Democrats really, really believe in death panels.  Steve Rattner, a former Obama Administration official, used the term (presumably as a form of gallows humor) in the Times a few weeks ago.  Rattner's piece hits some of the same themes... MORE

Welcome to Luigi Zingales

Econlog Administrative Issues
Garett Jones
I remember the first time I saw Luigi Zingales speak.  It was early 2009, at what Arnold called an "Anti-Stimulus Conference."  Arnold himself gave an excellent talk, my colleague Don Boudreaux did as well. Time exceptionally well spent.  But the... MORE

Treasury Bondholders: Winning in the Senate?

Public Choice Theory
Garett Jones
Many are convinced that the U.S. government will likely either default or hyperinflate its way out of debt.  I disagree: I think Treasury bondholders will win. As I wrote in Econ Journal Watch:A U.S. default is unlikely: As a demographically... MORE

Group IQ: One Source of Trustworthiness

IQ in Economics
Garett Jones
In Arnold's new essay entitled "Libertarians and Group Norms," he writes:[W]e live in a world that demands enormous levels of trust among strangers...I doubt that anyone fully comprehends what holds this fabric of trust together. I agree.  But we're building comprehension,... MORE

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