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Growth: Causal Factors
A Category Archive (335 entries)
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May 8, 2013
Austrian Economics
Art Carden
F.A. Hayek would have been 114 years old today. To celebrate, here's a set of videos in which Hayek is interviewed by, among others, Axel Leijonhufvud (!), Armen Alchian (!!), and James Buchanan (!!!). Or, if you prefer the written... MORE
May 2, 2013
Growth: Causal Factors
David Henderson
UPDATE BELOW Betsey Stevenson and Justin Wolfers write: In the end, all the corrections advocated by the critics shift the average GDP growth for very-high-debt nations to 2.2 percent, from a negative 0.1 percent in Reinhart and Rogoff's original work.... MORE
April 4, 2013
Growth: Consequences
Bryan Caplan
My favorite question from this year's Ph.D. Micro midterm:Suppose artificial intelligence researchers produce and patent a perfect substitute for human labor at zero MC. Use general equilibrium theory to predict the overall economic effects on human welfare before AND after... MORE
February 20, 2013
Behavioral Economics and Rationality
Bryan Caplan
Further evidence that social scientists underestimate the power of evolution, courtesy of Marlene Zuk:[A] new field called experimental evolution is showing us that sometimes evolution occurs before our eyes, with rapid adaptations happening in 100, 50, or even a dozen... MORE
January 15, 2013
Wages and Salaries
Garett Jones
Jon M at Sociological Speculation reports: ...new drugs such as Modafinil appear to vastly reduce the need for sleep without significant side effects (at least so far). Based on reports from users, it seems that people could realistically cut their sleep... MORE
December 23, 2012
Cost-benefit Analysis
David Henderson
When our microwave oven broke down a few weeks ago after almost 15 years of faithful service, it got me thinking about how valuable microwaves are to my family, which led to thinking about the consumer surplus we get from... MORE
December 18, 2012
Growth: Causal Factors
David Henderson
I wish I had been aware of Virginia Postrel's excellent piece on technological progress when I wrote my post yesterday on electricity. In it, she takes on the views of Jason Pontin, my former editor at the Red Herring, and... MORE
December 16, 2012
Cost-benefit Analysis
Bryan Caplan
Garett interestingly builds on Lucas' fact that "with the exception of Hong Kong, no massive economic modernization has ever happened in a colony." Still, I'm unimpressed on multiple levels.1. How about Macao? If you count so-called "settler societies," then you... MORE
December 15, 2012
Growth: Causal Factors
Garett Jones
A decade ago, Robert Lucas noticed a pattern:The economic progress that has come to Asia and Africa came after the colonial empires were dismantled. To put it another way, Lucas claims that with the exception of Hong Kong, no massive economic... MORE
October 31, 2012
Cross-country Comparisons
Bryan Caplan
Like Garett, I'm a huge admirer of Lant Pritchett's "Where Has All the Education Gone?" (World Bank Economic Review, 2001). My favorite part of the paper is when Pritchett presents three stories that might explain his results:I discuss three possibilities... MORE
October 29, 2012
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
October 19, 2012
Growth: Causal Factors
David Henderson
The Fund for American Studies put out this excellent 6-minute video. Posted with permission.... MORE
September 26, 2012
Tim seemed to view his job as protecting Citigroup from me, when he should have been worried about protecting the taxpayers from Citi....That's from her new book, profiled in the Financial Times. You already know that countries whose banking sectors... MORE
September 10, 2012
Cross-country Comparisons
Garett Jones
The academic literature is filled with research into the importance of trust. High-trust societies are richer, safer, just better. But I suspect that it's not trust that's valuable: it's trustworthiness. When people are trustworthy, when cultures and laws make honorable... MORE
September 5, 2012
Growth: Causal Factors
David Henderson
I've laid out Robert Gordon's pessimistic thoughts on U.S. growth here and some of my criticisms here. These are my parting thoughts. Some of them are similar to what some of the commenters have said. First, I'll emphasize the big-picture... MORE
September 4, 2012
Growth: Causal Factors
David Henderson
On Sunday I laid out Robert J. Gordon's reasons for thinking that growth of per capita income in the future for most Americans will be substantially lower than it has been for the last two centuries. I promised a critique... MORE
September 2, 2012
Growth: Causal Factors
David Henderson
I'm a big fan of much of the work of Northwestern University economist Robert J. Gordon. His latest piece, "Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds," is no exception. I have some criticisms. Indeed, my main... MORE
August 20, 2012
Growth: Causal Factors
Arnold Kling
The New York Times reports, Even as Foxconn, Apple's iPhone manufacturer, continues to build new plants and hire thousands of additional workers to make smartphones, it plans to install more than a million robots within a few years to supplement... MORE
August 8, 2012
Central Planning vs. Local Knowledge
David Henderson
The spontaneous reforms in agriculture meant that new supplies of food products needed markets and that markets needed infrastructure. Rural dwellers created a private trade network, and, within one year, most state food stores were out of business. Rural entrepreneurs... MORE
August 6, 2012
Sometimes, when the person beside me on an airplane finds out that I'm an economist, he/she will ask, "What's going to happen to the economy?" I answer, "I don't know." If the person is somewhat more sophisticated, he will ask... MORE
July 28, 2012
Growth: Causal Factors
Arnold Kling
Interviewed by Nick Schulz, he says, In total, almost half of college graduates move out of their birth states by age 30. Only 27 percent of high school graduates and 17 percent of high school dropouts do so. It is... MORE
July 26, 2012
Books: Reviews and Suggested Readings
Arnold Kling
It is called Human Capitalism. It might be called The Age of Abundance* (*for some people). Brink is trying to thread the needle between those who view the poor as victims and those who apparently don't. (Bryan read an earlier... MORE
July 20, 2012
Growth: Causal Factors
Arnold Kling
Bryan has one angle. I have another. In this video, Thiel confronts Google CEO Eric Schmidt over the issue of Google's cash hoard. If you have $50 billion in low-yielding investments, are you not more of a bank than a... MORE
July 19, 2012
Growth: Causal Factors
Bryan Caplan
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
July 4, 2012
International Trade
David Henderson
Here is what Adam Smith wrote in 1776 (in The Wealth of Nations) about the odds that the British government would voluntarily give up control over the 13 colonies. Notice his clear distinction between what he thought the British government... MORE
June 25, 2012
Growth: Causal Factors
David Henderson
In the United States, the image of Mexico is abysmal and largely wrong. The average American seems to believe that Mexico is a destitute, quasi-socialist nation with rampant drug violence that is sending waves of illegal immigrants to the United... MORE
June 22, 2012
Cross-country Comparisons
Bryan Caplan
Matt Ridley once again graciously responds in the comments. Our differences appear to have largely evaporated. Ridley's in blockquotes, I'm not.But your challenge mistakes my argument. I have not argued that there is no positive correlation of innovation with population,... MORE
June 21, 2012
Economic History
Bryan Caplan
Matt Ridley graciously replies to my critique of his Julian Simon Award Lecture in the comments. Ridley's in blockquotes, I'm not:First, I know of a lot of people who are not conventionally clever but who contribute to innovation by making... MORE
Cross-country Comparisons
Bryan Caplan
Matt Ridley ends his excellent Julian Simon Award Lecture with a criticism: Having paid homage to Julian Simon's ideas, let me end by disagreeing with him on one thing. At least I think I am disagreeing with him, but I may be... MORE
May 25, 2012
Books: Reviews and Suggested Readings
Arnold Kling
I am reading Edward Conard's Unintended Consequences, because Tyler Cowen wrote, I find parts of this book brilliant and other parts dead wrong. In any case it is full of substance, it is one of the must-read books of the... MORE
April 27, 2012
Books: Reviews and Suggested Readings
Bryan Caplan
"Does Technology Drive the Growth of Government?" is one of my favorite Tyler Cowen papers. It's on my graduate Public Choice syllabus. Unfortunately, it has strangely disappeared from the Internet - and Tyler himself can't easily locate the paper. If... MORE
April 4, 2012
Books: Reviews and Suggested Readings
Arnold Kling
The Coming Prosperity, by Philip E. Auerswald. Never before have more people had a greater opportunity to create value for society, and for themselves, than we do today. New technologies of communication and collaboration are enabling not just lone innovators,... MORE
April 3, 2012
Books: Reviews and Suggested Readings
Arnold Kling
It is a book about the great discoveries made at Bell Labs. The author is Jon Gertner, and I read it on Tyler Cowen's recommendation. It is definitely worth reading, although not in the elite class of new books. It... MORE
March 29, 2012
Growth: Causal Factors
Arnold Kling
1. Timothy Taylor on the question of why different production techniques are used in different countries. 2. Don Boudreaux on how capital cannot just be reduced to its physical characteristics. I think that (2) provides insights that would help with... MORE
March 26, 2012
Growth: Causal Factors
Bryan Caplan
GDP is an agnostic statistic. If someone spends money on something, it counts as GDP. This agnosticism helps statisticians avoid controversy. But it's hard to see any other epistemic benefit. If we really want to measure output, we have to... MORE
March 16, 2012
Growth: Causal Factors
David Henderson
Scott Sumner writes: In other words, most economists now see the US trend rate of RGDP [real GDP] growth as being something like 1.5%. After 150 years of 3% trend, that's a startling downshift. Tyler Cowen is no longer a... MORE
March 2, 2012
Growth: Causal Factors
Arnold Kling
He is the economist who co-wrote Information Rules and now works for Google. Nick Schulz and I had a video conference with him. He has a very interesting perspective on where things are headed with robotics, for example. Here is... MORE
Growth: Causal Factors
Arnold Kling
These are from recent video conferences. Alex Tabarrok (just Alex and me) on policies to encourage innovation; and David Weinberger on how the Internet is affecting our views of knowledge (with Nick Schulz and me; unfortunately, the sound quality on... MORE
February 29, 2012
Books: Reviews and Suggested Readings
Arnold Kling
The book is Abundance: The Future is Better than You Think. I think it is a must-read. 1. I am skeptical of Peter Thiel's view that regulation is holding back progress. I recall Ray Kurzweil's remark that regulations are like... MORE
February 24, 2012
Growth: Causal Factors
Arnold Kling
About 18 minutes into the conversation, we get into the topic of innovation in higher education. He thinks we might see a winner-take-all market for professors, and we might see it happen sooner than you think. A podcast version... MORE
February 13, 2012
Growth: Causal Factors
Arnold Kling
David Autor and Daron Acemoglu have a long review article. Much of it is focused on shifting from a model in which there are only two skill levels (high and low) to a more nuanced model, with at least three... MORE
January 29, 2012
Energy, Environment, Resources
Arnold Kling
At The Atlantic. The U.S. Department of Energy, for example, estimates that small and environmentally friendly hydro-electric projects could generate at least 30,000 MWs of power annually. That's equivalent to the generating capacity of about 30 nuclear power plants. Moreover,... MORE
January 14, 2012
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
January 7, 2012
Growth: Causal Factors
Arnold Kling
He writes, It is also a good paper for Arnold Kling to comment on I take this as a suggestion that I read the paper, by Richard Baldwin. Actually, I am not sure that I have many comments. Here is... MORE
January 1, 2012
Growth: Causal Factors
Arnold Kling
Michael Mandel writes, Let me repeat that: Government net investment as a share of net domestic product is at a 40-year low. I had to check this last one a couple of times to make sure it was really true.... MORE
December 30, 2011
Growth: Causal Factors
Arnold Kling
Following up on last year's post on long-term trends (which in turn followed up on a post from 2005: 1. Productivity growth has tailed off in recent quarters. It varies so much on a year-to-year basis that it takes quite... MORE
December 27, 2011
Growth: Causal Factors
Arnold Kling
Russ Roberts and Alex Tabarrok converse for an hour. Recommended. It brings out/reinforces points from Alex's ebook.... MORE
December 25, 2011
Growth: Causal Factors
Arnold Kling
From Jason Collins: There are some massive externalities to the behaviour of other people. Chrystia Freeland, quoting a Taiwanese-born American executive on the effect of globalization on American workers: "So if you're going to demand 10 times the paycheck, you... MORE
December 1, 2011
Books: Reviews and Suggested Readings
Bryan Caplan
Alex Tabarrok's gem of an e-book, Launching the Innovation Renaissance, releases today. It's a TED book, but don't mistake it for a mere transcription of a TED talk. It's an original and powerful work of popular scholarship that aims to... MORE
November 17, 2011
Growth: Consequences
Arnold Kling
In my opinion, it is this debate between Tyler Cowen and Erik Brynjolffson. The speakers, the moderator, and the audience questions were all top form. Remind me never to get into a live debate with Tyler. I thought he was... MORE
November 3, 2011
Growth: Causal Factors
David Henderson
That's the title of my review, in the latest issue of Policy Review, of Alexander J. Field's A Great Leap Forward: 1930s Depression and U.S. Economic Growth. Here's an excerpt of my review: The decade that took the biggest strides... MORE
Growth: Causal Factors
Arnold Kling
From a McKinsey report, A detailed analysis of the French economy, for example, showed that while the Internet is reported to have destroyed 500,000 jobs over the past 15 years, it created 1.2 million new ones. From a PSST perspective,... MORE
October 27, 2011
Growth: Causal Factors
Arnold Kling
That was the title of a self-published book of essays. The title has a double meaning. One meaning is that one can learn (some) economics from reading the book. The other is that an economy is a learning mechanism. Anyway,... MORE
October 23, 2011
Growth: Causal Factors
Arnold Kling
Bryan asked, Suppose half of the sectors of the economy grow forever at 4%, while the rest completely stagnate. I'm strongly tempted to say that this economy's growth rate equals 2% forever. Anyone tempted to disagree? If so, why? He... MORE
October 19, 2011
Growth: Causal Factors
Bryan Caplan
Two days ago I posed the following hypothetical:Suppose half of the sectors of the economy grow forever at 4%, while the rest completely stagnate. I'm strongly tempted to say that this economy's growth rate equals 2% forever. Anyone tempted to... MORE
October 18, 2011
Growth: Causal Factors
Bryan Caplan
Suppose half of the sectors of the economy grow forever at 4%, while the rest completely stagnate. I'm strongly tempted to say that this economy's growth rate equals 2% forever. Anyone tempted to disagree? If so, why?Before you answer: Would... MORE
October 11, 2011
Growth: Causal Factors
Arnold Kling
David Brooks summarizes some recent articles complaining about stagnation in scientific innovation. The time traveler would be vibrating with excitement. She'd want to know what other technological marvels had been invented in the past 41 years. She'd ask about space... MORE
September 29, 2011
Growth: Consequences
Arnold Kling
Phillip Longman writes, Because of the phenomenon of hyper-aging in the developing world, another great variable is already changing as well: migration. In Mexico, for example, the population of children age 4 and under was 434,000 less in 2010 than... MORE
September 23, 2011
Economics and Culture
Bryan Caplan
More things I'm pessimistic about:1. I think First World happiness is basically maxed out. In rich countries, your happiness depends on your personality, not your situation. And personality is really hard to change. Tyler says he's a "revenue pessimist but... MORE
September 21, 2011
Economics and Culture
Bryan Caplan
Here's Tyler's list. Here's mine:1. I am a pessimist about the likelihood of making democracy work better than it does. We can push the world in a better direction (as Bob Tollison says, "We're all part of the equilibrium"), but... MORE
August 26, 2011
Growth: Causal Factors
Arnold Kling
Tyler Cowen writes, the Japanese economy was more dependent on productivity gains in the first place. As those gains start to slow down or dry up, it bites harder and more quickly. I want to talk about three big stories... MORE
August 22, 2011
Economics of Education
Arnold Kling
Marc Andreessen gives his view of the world. It includes, Health care and education, in my view, are next up for fundamental software-based transformation. My venture capital firm is backing aggressive start-ups in both of these gigantic and critical industries.... MORE
August 12, 2011
Growth: Causal Factors
Bryan Caplan
I first crossed paths with my future debate partner, the noble David Balan, when the AER asked me to referee his paper on ability, morality, and economic performance. The AER ignored me of of course, but years later, a much-revised... MORE
July 29, 2011
Growth: Causal Factors
Bryan Caplan
Today I strolled through my childhood neighborhood. Northridge, California. When I passed by the corner house that a barber owned long ago, I imagined the following dialog: Stagnationist: So the world just keeps getting better and better, eh? Well let... MORE
July 21, 2011
Economics of Education
Arnold Kling
He says, Look, the most rapidly growing sector of jobs over the last decade, and in the forecasts for the next decade, is health care, and education is in the top five. So we need to embrace that. We need... MORE
July 19, 2011
Growth: Causal Factors
David Henderson
The Problem with the JCs Although I always read a whole book before I write a review of it [Exception: I reviewed the New Palgrave for Fortune after having read "only" about 300 of its 1,196 entries] and I usually... MORE
July 17, 2011
Growth: Causal Factors
Bryan Caplan
Journalists usually love a good debate. If there's one protectionist economist for every hundred free-traders, they'll still make an effort to "ask both sides." A glaring exception: Today's piece in The Guardian on the Beckham's fertility. The headline:Beckhams a "bad... MORE
July 6, 2011
Growth: Causal Factors
David Henderson
Summed up in a nutshell I'm giving a presentation at the Mont Pelerin Society meetings in Istanbul in October and I'm staying over a few days to see the country and visit former students. The Turkish students I've taught have... MORE
July 4, 2011
Growth: Causal Factors
Arnold Kling
By writing this column. Unfortunately, with some exceptions, multilateral and bilateral agencies had incentives to continue lending even when recipient government actions destroyed any hope of economic growth. Sometimes donors and multilaterals gave aid and loans only because the function... MORE
June 27, 2011
Growth: Causal Factors
Arnold Kling
In his book review, Henderson writes, whatever explanation Cowen comes up with for the slower growth of median family income since 1973 should be one that is consistent with the relatively healthy growth of per capita GDP since 1973. Do... MORE
Growth: Causal Factors
David Henderson
My review of Tyler Cowen's e-book, "The Great Stagnation," is now out in Regulation. It's titled "Tyler Cowen's Unpersuasive Case." In it, I challenge each of Tyler's 3 factors that he claims are behind the great stagnation and show that... MORE
June 13, 2011
Growth: Causal Factors
Bryan Caplan
When more people use a product, firms have a stronger incentive to improve it. For some products, however, having more users is an improvement. We call them "network products." Phones are the classic example; they're useless unless other people have... MORE
June 8, 2011
Growth: Causal Factors
Bryan Caplan
Economists traditionally partition output into agriculture, manufacturing, and services. In this framework, the appeal of "stagnationist" claims is relatively easy to see. None of these three sectors seems amazingly innovative anymore; the visible progress is "just in computers."But is it... MORE
June 2, 2011
Energy, Environment, Resources
Arnold Kling
Michael Lind on the abundance of fossil fuels. Jason Collins on Oded Galor's theory of population, genetics, and economic growth. More on Galor from Tyler Cowen. Megan McArdle on the failure of Obamacare to enlist the uninsured with pre-existing conditions.... MORE
May 25, 2011
Economic Methods
Arnold Kling
He wrote, Name the most credible measure of idea production that isn't at least moderately positively correlated with population. I think this is a somewhat imprecise formulation. First of all, "moderately positive" is vague. It could be a very low... MORE
May 24, 2011
Growth: Causal Factors
Bryan Caplan
Over at Cato Unbound, I gave Greg Clark a challenge:Name the most credible measure of idea production that isn't at least moderately positively correlated with population.In his reply, he pointed to Iceland:The 300,000 people of Iceland produced 70 films (features,... MORE
May 18, 2011
Economic Philosophy
Bryan Caplan
Highlights from my reply to Greg Clark:I am pleased to in principle accept Greg's proposed bet: So if Bryan wants to bet even odds that farmland prices will be higher relative to average wages in 30 years time, I am... MORE
May 9, 2011
Growth: Causal Factors
Arnold Kling
James C. Cooper writes, Between 1999 and 2009, these large global corporations pared 2.9 million workers from their U.S. payrolls while adding 2.4 million jobs at their foreign affiliates. That's a reversal from the previous decade, when they boosted payrolls... MORE
April 28, 2011
Growth: Consequences
Arnold Kling
MIT Technology Review reports, In 2010 consumers bought more than 300 million smart phones--devices that include complete operating systems, and for which advanced software can be written--plus nearly 18 million tablet computers. (Meanwhile, more than 1.1 billion simpler phone handsets... MORE
April 18, 2011
Growth: Causal Factors
Arnold Kling
A podcast with Russ Roberts, recommended. I am still trying to unpack the model Munger alludes to at the end, in which it does not pay women to become educated in countries where there is little physical capital. I am... MORE
April 14, 2011
Growth: Causal Factors
Arnold Kling
The Kauffman Foundation describes a new paper. According to the paper, when countries are poor and less advanced, the economic future is relatively predictable. The example of rich countries allows policymakers in less developed countries to peek into the future... MORE
April 12, 2011
Growth: Causal Factors
David Henderson
I'm at the same APEE meetings in Nassau that Arnold's at and I saw another paper presented by Garett Jones. It was titled "A Political Coase Theorem for the Intelligent." It was on how high-IQ pairs in experimental games do... MORE
March 22, 2011
Cross-country Comparisons
Bryan Caplan
The Bill and Melinda Gates Foundation has an interesting accountability mechanism. After they make a major funding decision, they solicit pro and con memos on "roads not taken" - other ways they could have spent their money. Since the Gates... MORE
March 2, 2011
Finance: stocks, options, etc.
Arnold Kling
As usual, Mark Thoma has interesting links for today. 1. Ken Rogoff writes, Many countries' tax systems hugely favor debt over equity. The housing boom in the United States might never have reached the proportions that it did if homeowners... MORE
February 13, 2011
Growth: Causal Factors
Arnold Kling
Outstanding, even with the occasional stammer. If you like what Nick Schulz and I call Economics 2.0, you will loves this talk.... MORE
February 4, 2011
Growth: Causal Factors
Arnold Kling
In this interview with Nick Schulz, Tyler Cowen discusses his stagnation hypothesis. He complains that he is getting unexpected pushback from market-oriented economists, but he does not complain about unexpected support from journalists on the left. Perhaps one reason for... MORE
January 28, 2011
Growth: Causal Factors
David Henderson
Price controls really do matter. Any claim we make based on aggregate data is only as good as those data. Brink Lindsey has pointed out that, contrary to Tyler Cowen, the so-called Great Stagnation that Tyler writes about is not... MORE
Books: Reviews and Suggested Readings
Arnold Kling
I was planning to review Tyler Cowen's e-book while I read it, but then we lost power, and my Kindle was working while my Internet connection was not, so my comments on the entire rest of the book are below... MORE
Growth: Causal Factors
Bryan Caplan
I haven't read Tyler's much-discussed e-book, but he defended the main theses over a few lunches. My prediction: When I get around to reading the book, my reaction to the numbers will mimic Brink Lindsey's:Tyler correctly points out that median... MORE
January 26, 2011
Books: Reviews and Suggested Readings
Arnold Kling
I will review Tyler Cowen's new Kindle single one chapter at a time. My father always said that the first iron law of social science is, "Sometimes it's this way, and sometimes it's that way." In other words, beware of... MORE
January 21, 2011
Growth: Causal Factors
Arnold Kling
Jim Tankersley writes, The Great Recession wiped out what amounts to every U.S. job created in the 21st century. But even if the recession had never happened, if the economy had simply treaded water, the United States would have entered... MORE
January 20, 2011
Growth: Causal Factors
Arnold Kling
In an interview, Thiel says, the problem was that everybody had tremendous expectations that the country was going to be a much wealthier place in 2010 than it was in 1995, and in fact there's been a lot less progress.... MORE
January 15, 2011
Growth: Causal Factors
Arnold Kling
We call this the I, Toaster video. It would be a great discussion starter for an economics class, just because it does not intend to teach an economics lesson. Thanks to Don Boudreaux for the pointer.... MORE
January 3, 2011
Growth: Consequences
Arnold Kling
Self-recommending, until I get the 90 minutes to listen. I have heard Robin talk on this subject, and he is fascinating.... MORE
December 22, 2010
Economic History
David Henderson
The two economists [Krugman and Simon] appeared in different ways. Krugman wrote a deeply, though unintentionally, ironic article titled "Why most economists' predictions are wrong," filled with predictions that were... mostly wrong. Simon, sadly, had just passed away and so... MORE
December 14, 2010
Income Distribution
Arnold Kling
1. Deirdre McCloskey interviewed about her latest book. (Elsewhere, David Brooks channels her, but without any citation. This shabby treatment contrasts with his generous treatment of Nick and me a year ago.) 2. Tyler Cowen, ostensibly on inequality. But it... MORE
December 3, 2010
Growth: Causal Factors
Arnold Kling
Deirdre McCloskey interviewed. In her view, about 200 years ago there was in northwest Europe a shift in values regarding merchants and people engaged in commerce. Previously, they were treated as low status. Now, they were given respect. She argues... MORE
November 14, 2010
Growth: Causal Factors
Arnold Kling
John Hagel writes, the Shift Index focuses on return on assets (ROA) for all public companies in the US since 1965. The bottom line: ROA has collapsed by more than 75% over this period. Thanks to Patri Friedman for the... MORE
November 8, 2010
Growth: Causal Factors
Bryan Caplan
I'm open to the possibility that variables besides policy, population, and science belong in a multiplicative growth model. But labor quality - the variable that Clark emphasizes in A Farewell to Alms - just isn't very important. Sure, you can't... MORE
Growth: Causal Factors
Bryan Caplan
Here's Greg Clark on growth over at Cato Unbound:I fully agree with McCloskey about the surprisingly poor ability of incentives alone to account for growth. In order to hold on to the central idea that the 10,000-year delay in the... MORE
November 1, 2010
Growth: Causal Factors
Arnold Kling
Christian H. Nesheim asks folks which technology will have a big impact over the next twenty years. A sample response: But from an ethical perspective, I think the single most important technological development will be the mass-production and consumption of... MORE
October 17, 2010
Growth: Causal Factors
David Henderson
Here's a 10-minute collage of excerpts from various interviews with actor Will Smith. It's highly inspirational and the the whole thing is worth watching. You are unlikely to be bored because he covers a lot of ground. My favorite two... MORE
October 12, 2010
Growth: Causal Factors
Arnold Kling
Deirdre McCloskey, Gregory Clark, and Matt Ridley debate the cause(s) of the industrial revolution. McCloskey writes, contrary to the usual declarations of the economists since Adam Smith or Karl Marx, the Biggest Economic Story was not caused by trade or... MORE
October 4, 2010
Labor Mobility, Immigration, Outsourcing
Arnold Kling
Russ Roberts interviews Bryan Caplan on the case for open borders. The challenge with making that case is that anything other than xenophobia is counterintuitive. Thorfinn suggests that if the U.S. overspends on health care, it also overspends on education.... MORE
September 24, 2010
Books: Reviews and Suggested Readings
Arnold Kling
Fred Pryor has a new book, called Capitalism Reassessed, a title which does not really say what the book is about. He uses various qualitative data sources to classify OECD economies into subsets. Some excerpts from the book below the... MORE
September 7, 2010
Growth: Causal Factors
David Henderson
Larry White has a good op/ed in tomorrow's Wall Street Journal on Germany's post-World-War-II economic miracle. He attributes this correctly to Ludwig Erhard's abolition of Hitler's price controls that the Allies had continued to enforce after the war ended. He... MORE
August 9, 2010
Growth: Causal Factors
Arnold Kling
From David Halberstam's The Fifties, p. 174: Everyone in this country, he thought, had a car and a family, and sooner or later everyone had to go somewhere. Dorothy Wilson listened to him with growing trepidation--when Kemmons Wilson said he... MORE
July 5, 2010
Growth: Causal Factors
David Henderson
The neoliberal policy revolution that began in the late 1970s might be the most important recent event in world history. But it remains a curiously elusive and underreported phenomenon. Many on the left question the motives behind the reforms, as... MORE
June 23, 2010
Central Planning vs. Local Knowledge
Arnold Kling
Niklas Blanchard adds interesting comments. Charlton follows up:, The joke of the Texas Sharpshooter is that he fires his gun many times into a barn door, then draws a target over the bullet holes, with the bulls-eye over the closest... MORE
June 22, 2010
Business Economics
Arnold Kling
Without mentioning the movie, Bruce Charlton thinks we are living it. So we should be honest about the fact that human do not anymore fly to the moon because humans cannot anymore fly to the moon. Humans have failed to... MORE
June 21, 2010
Economic History
Arnold Kling
The regular issues of the American Economic Review rarely interest me, but the papers and proceedings issue is often better. This year, covering the meetings held in January and arranged by Robert Hall, is particularly good. It seems as though... MORE
June 20, 2010
Information Goods, Intellectual Property
Arnold Kling
When you buy a car, should the price include a licensing fee to the ancestor who invented the wheel? That question is implicit in William Baumol's new book. I think that the answer is obviously "no," but it is less... MORE
June 18, 2010
Books: Reviews and Suggested Readings
Arnold Kling
William Baumol's latest book is The Microtheory of Innovative Entrepreneurship. It is hard to think of an economist as important as Baumol who does not have a Nobel Prize. He is old enough to put himself out to pasture, but... MORE
June 16, 2010
Growth: Causal Factors
Arnold Kling
1. A well-written review of From Poverty to Prosperity. I admit I was surprised when I got to the end of the post. 2. A new metaphor for the economy, from Don Boudreaux. He compares it to a gigantic jigsaw... MORE
May 23, 2010
Growth: Causal Factors
David Henderson
This morning, Scott Sumner has an excellent post on economic growth and the extent to which it is due to what he calls "neoliberal" reforms. He never defines "neoliberal," but it's clear from the context and the specific policies that... MORE
May 22, 2010
Macroeconomics
Arnold Kling
by Rob McClendon. The two segments are each less than ten minutes. They cover a range of topics, from what Nick Schulz and I call Economics 2.0 to bank bailouts to the outlook for employment. Part one. Followed by Part... MORE
May 8, 2010
Growth: Causal Factors
David Henderson
I came across the following memo that I wrote while a senior economist with President Reagan's Council of Economic Advisers. My main duty in that job was to fight off bad ideas, mainly from within the Administration. If I had... MORE
May 4, 2010
Growth: Causal Factors
Arnold Kling
Via a Tyler Cowen tweet, Robert Fortner writes, The accuracy of computer speech recognition flat-lined in 2001, before reaching human levels. Raw computer power is not enough to solve complex problems. That is why predicting that we will have brain... MORE
April 6, 2010
Fiscal Policy
David Henderson
A few months ago, in the comments on one of Bryan's posts (I can't remember which one), Bob Murphy asserted that real income per capita would rise by a large double-digit percent within a year or two if the size... MORE
March 15, 2010
Growth: Causal Factors
Bryan Caplan
I recommend Bloom and van Reenen's 2010 JEP piece on "Why Do Management Practices Differ Across Firms and Countries?" The paper is mis-titled, but excellent nonetheless. Its main mission is to measure management practices, then describe how they vary -... MORE
March 4, 2010
Growth: Causal Factors
Arnold Kling
Those of us who know him are familiar with his outlook for a sudden transition to what would seem to us like hyper-growth. The rest of you will find this talk new and mind-blowing.... MORE
March 2, 2010
Business Economics
Arnold Kling
Nicholas Bloom and John Van Reenen write management practices vary tremendously across firms and countries. Most of the difference in the average management score of a country is due to the size of the "long tail" of very badly managed... MORE
February 26, 2010
Growth: Causal Factors
Bryan Caplan
I heartily recommend David Plotz's The Genius Factory: The Curious History of the Nobel Prize Sperm Bank. It staddles genres, but you can see it as a work of business history. Robert Graham, the founder of the "Nobel sperm bank,"... MORE
February 5, 2010
Books: Reviews and Suggested Readings
Arnold Kling
Yesterday, Nick and I spoke at Cato, with comments by Tim Kane and introductory remarks from Brink Lindsey. You can watch or listen to it by going to this page.My personal bit starts at minute 22, or shortly thereafter. Actually,... MORE
February 1, 2010
Upcoming Events
Arnold Kling
Bill Gates writes, So far technology has hardly changed formal education at all. But a lot of people, including me, think this is the next place where the Internet will surprise people in how it can improve things--especially in combination... MORE
January 26, 2010
Family Economics
Bryan Caplan
Most people oppose polygamy out of intolerance, but many social scientists offer a deeper objection: Polygamy simulates the allegedly awful social effects of high male/female ratios. Arnold's particularly worried:If it were not for monogamy, the competition among males for females... MORE
January 22, 2010
Books: Reviews and Suggested Readings
Arnold Kling
Michael Mandel writes, It's good to see a book which focuses on this topic, whether the authors call it innovation economics or Economics 2.0 or something else. We need more of this kind of thinking. My guess is that Michael... MORE
January 20, 2010
Cross-country Comparisons
Arnold Kling
John Taylor is interviewed. I recommend clicking on "interview transcript," since it is faster to skim and read than to watch an interview. At one point, the interviewer poses a question from Scott Sumner on whether the Fed was too... MORE
Growth: Causal Factors
Arnold Kling
He offers a diagnosis based on FP2P. It's true that Haiti has few natural resources, but neither do Japan or Switzerland. What those countries do have are what Kling and Schulz call valuable "intangible assets" -- the skills, rules, laws,... MORE
January 19, 2010
Growth: Causal Factors
Bryan Caplan
Bob Murphy thinks that my recent posts on Soviet and European growth "seem contradictory": Now I'm not saying Caplan was wrong about the Soviet Union, and I'm not saying this new guy is wrong about Europe. What I am saying... MORE
January 15, 2010
Growth: Causal Factors
Arnold Kling
Read the whole thing. An excerpt: Why is Haiti so poor? Well, it has a history of oppression, slavery and colonialism. But so does Barbados, and Barbados is doing pretty well. Haiti has endured ruthless dictators, corruption and foreign invasions.... MORE
Central Planning vs. Local Knowledge
David Henderson
As I've posted about earlier, to understand why socialism must fail, you need to understand Hayek's argument (which he drew from Ludwig von Mises and elaborated on) that the information that's most valuable is information held in the hands of... MORE
January 12, 2010
Cross-country Comparisons
Arnold Kling
Robert Fogel writes, In many ways, China is the most capitalist country in the world right now. In the big Chinese cities, living standards and per capita income are at the level of countries the World Bank would deem "high... MORE
January 8, 2010
Growth: Causal Factors
Arnold Kling
Tim Kane listens to a talk by Paul Romer, and muses, Romer forces us to accept that rules are very difficult to change. Nations in particular, even when its leaders recognize the need for rules to change, have difficulty making... MORE
January 4, 2010
Growth: Causal Factors
Arnold Kling
Robert Samuelson writes, What scars will the Great Recession leave? We are already seeing some. Americans are moving less than at any time since World War II, reports demographer William Frey of the Brookings Institution. People are tied to existing... MORE
January 3, 2010
Growth: Causal Factors
Arnold Kling
Daron Acemoglu writes, On one side of the border fence, in Santa Cruz County, Arizona, the median household income is $30,000. A few feet away, it's $10,000. On one side, most of the teenagers are in public high school, and... MORE
December 30, 2009
Growth: Causal Factors
Arnold Kling
These relate to recent discussions on this blog. 1. Clifford Winston and Robert Crandall on market failure and government failure, from Forbes last October. 2. A review of an optimistic book by Gregg Easterbrook. Mark Perry ties this back to... MORE
December 27, 2009
Growth: Causal Factors
Bryan Caplan
Doug North has never sounded wiser or clearer than he does in his interview with Arnold and Nick. North's concluding statement is the highlight for me:I'm moderately pessimistic about the future of the world...What particularly bothers me is that the... MORE
December 23, 2009
Growth: Causal Factors
Arnold Kling
Mark Perry writes, manufacturing employment in the United States fell below 12 million this year for the first time since 1946, and is now at the lowest level (11,648,000 manufacturing jobs in November) since March of 1941 According to the... MORE
December 16, 2009
Austrian Economics
Arnold Kling
Nobel Laureate Edmund Phelps writes a long interesting article. Excerpts and my comments below the fold.... MORE
December 3, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Curt Gardner writes, The development question is not merely a matter of distributing recipes and watching prosperity develop. Recipes often come with buried cultural assumptions that we take for granted, because they are so ingrained for us. These things could... MORE
November 30, 2009
Growth: Causal Factors
Arnold Kling
Tyler Cowen thinks that China is making the wrong bet. Automobiles, steel, semiconductors, cement, aluminum and real estate all show signs of too much capacity. In Shanghai, the central business district appears to have high vacancy rates, yet building continues.... MORE
November 25, 2009
Growth: Causal Factors
Arnold Kling
Jerry O'Driscoll writes there is a name for this economic policy: corporatism. Big government favors selected big business and rewards big labor as a junior partner. It's not socialism, but the economic component of a fascist political program. Credit administered... MORE
November 20, 2009
Growth: Causal Factors
Arnold Kling
Josh Lerner writes, Upon Singapore's independence in 1965--three years after Jamaica's own establishment as a nation--the two nations were about equal in wealth: the gross domestic product (in 2006 U.S. dollars) was $2,850 per person in Jamaica, slightly higher than... MORE
November 18, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Daron Acemoglu writes, People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions -- the... MORE
November 15, 2009
Growth: Causal Factors
Arnold Kling
A question from a reader: I teach an introduction to ag econ class, and today a young student came to chat with me about economic development. She is sincerely and passionately interested in helping developing countries reach our prosperity. She... MORE
November 12, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Finally, From Poverty to Prosperity is available for order at Amazon. It will be in stock there in a few days. I should warn you that it is an intellectually heavy book. It is not the sort of thing that... MORE
October 30, 2009
Business Economics
Arnold Kling
I don't think yesterday's GDP report matters. Historically, cyclical movements in GDP are just blips. It is the long-run trend of productivity that matters. This news from Scott Shane might be disturbing. The self-employment rate is now below pre-recession levels.... MORE
October 11, 2009
Growth: Causal Factors
Bryan Caplan
Here's the noble David Balan's reaction to my review of Gonick's histories:This probably goes without saying, but it's perfectly possible to believe Bryan's basic point (modern economic growth has led us to have it better than anyone ever had it... MORE
October 6, 2009
Growth: Causal Factors
Arnold Kling
Ed Glaeser writes, no variable from 1900 better explains success in 2000 than investment in education. That is, if you had a high percentage of the school-age population enrolled in school in 1900, you would have a high GDP per... MORE
October 5, 2009
Growth: Causal Factors
Arnold Kling
Bill Easterly interviews Paul Romer. Romer says, To understand how to alleviate poverty, we must understand growth and progress. Progress comes from new and better ideas. Ideas come in two flavors, technologies and rules. To foster growth and development, the... MORE
October 2, 2009
Growth: Causal Factors
Bryan Caplan
Last night I was writing my lecture notes on dictatorship, and realized that I didn't have a source for a factoid I often tell my students. Namely: Democracies and dictatorships have the same average growth rate, but dictatorships have higher... MORE
October 1, 2009
Growth: Causal Factors
Bryan Caplan
Normally I ignore self-congratulatory corporate publications, but for CostCo, I'll make an exception. There's a fascinating story about their Kirkland Signature brand in the latest CostCo Connection. See economic growth at work: How their product designers identify high-quality competitors, and... MORE
September 30, 2009
Growth: Causal Factors
Arnold Kling
Mark Kleiman writes, I'm worried about the tiny budget of the National Science Foundation and other basic-research enterprises, about an increasingly shoddy educational system, and about cooking the planet. The stock of capital plant and equipment, not so much. In... MORE
September 26, 2009
Finance: stocks, options, etc.
Arnold Kling
Esther (genius grant) Duflo and Abhijit Banerjee are interviewed. They are known for doing experimental tests of anti-poverty tactics. In one project we gave away a kilo of lentils for each immunization given to a child, and it had a... MORE
September 22, 2009
Growth: Causal Factors
Bryan Caplan
I always defer to Robin's knowledge of the natural sciences. So what am I do to when he replies thusly to my virtual reality post?There are roughly 1057 atoms in our solar system, and about 1070 atoms in our galaxy,... MORE
September 21, 2009
Growth: Causal Factors
Bryan Caplan
In the past Robin has braved the derision of his colleagues by speculating that in the next few decades, (a) we might upload our brains and achieve immortality, and (b) the economy might start doubling in size every few days. ... MORE
September 9, 2009
Growth: Causal Factors
Arnold Kling
Free to Choose Media asks, What institutions can enable the world's poor to realize their power and achieve prosperity? The best blog answer can win $250. The forthcoming book, From Poverty to Prosperity, by yours truly and Nick Schulz, would... MORE
July 15, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Alex Tabarrok looks at a study showing the increasing churn in the U.S. economy. The topple rate is a measure of how the rank of large firms on return of assets changes over time. The topple rate has increased by... MORE
July 13, 2009
Growth: Causal Factors
Arnold Kling
He sounds like Richard Florida. New York has bright, creative people, yada-yada. I think that most of the cyclical movement in the economy comes in businesses that are not all that creative--manufacturing, construction, and strip-mall businesses. Folks in Washington have... MORE
July 11, 2009
Cross-country Comparisons
David Henderson
In his speech yesterday in Ghana, President Obama said, among other things: No business wants to invest in a place where the government skims 20 percent off the top. and But what America will do is increase assistance for responsible... MORE
July 3, 2009
Economics and Culture
David Henderson
Here's one of mine, from Alfred Hitchcock's Rear Window. It's about one of the most important things economics deals with--incentives. Lisa (played by Grace Kelly) and Jeff (played by Jimmy Stewart), are listening to a man in another apartment play... MORE
June 26, 2009
Growth: Causal Factors
Bryan Caplan
Tim Kane is as sickened by growth agnosticism as I am:So why is that so many popular discussion of growth emphasize how totally mysterious it is? William Easterly's book, "The Elusive Quest for Growth" is a case in point, but... MORE
June 20, 2009
Books: Reviews and Suggested Readings
Arnold Kling
Charles I. Jones and Paul M. Romer write, By something like 1300 A.D., China was the most technologically advanced country in the world, with a large integrated population. According to the Lee model, it should have persisted indefinitely as the... MORE
June 10, 2009
Growth: Causal Factors
Arnold Kling
Daron Acemoglu writes, [Prior to 1800,] growth was never based on continuous technological innovations; thus it never resembled the technology-based growth described in Chapters 13-15. Third, in most cases economic institutions that would be necessary to support sustained growth did... MORE
May 20, 2009
Growth: Causal Factors
Arnold Kling
Antonio Fatas and Ilian Mihov write, China has sustained high growth rates in recent years despite its poor institutions because institutional quality is relatively less important in developing economies. However, we find that as their incomes increase, such countries need... MORE
April 27, 2009
Growth: Causal Factors
Arnold Kling
Have a new textbook coming out, with an interesting blog to go with it (presumably with more updates to come once the textbook is published). Here is the web page for the macro text. Here is Alex giving a 15-minute... MORE
April 20, 2009
Growth: Causal Factors
David Henderson
This piece by Tyler Cowen is a beautiful combination of clarity and passion. I knew that Tyler is a very good writer: I had no idea that he is a great writer. This is great writing. One highlight: In this... MORE
March 23, 2009
Labor Market
Arnold Kling
Abraham, et al on the differences between the household survey and the establishment survey of employment. And Glaeser and Gottlieb on the aggolomeration economies of cities. I have not found free online versions of either paper, though.... MORE
March 17, 2009
Growth: Causal Factors
David Henderson
Stanford University economists Peter Blair Henry and Conrad Miller recently published an interesting NBER Working Paper in which they compare economic policy and economic performance between Jamaica and Barbados. Henry and Miller point out that in Jamaica, the People's National... MORE
Growth: Causal Factors
Arnold Kling
Philip Greenspun writes, The logical conclusion from reading this book is to prefer a new state to an old state, a newly stable state to a long-stable state, and a new industry to an old one. Read the whole thing,... MORE
March 4, 2009
Growth: Causal Factors
Arnold Kling
William Easterly writes, values across different cultures lie along a spectrum between two separate poles: (1) valuing individual autonomy, believing in equal treatment of individuals, reliance on formal law, the same moral standards apply to all, enforcement of morality is... MORE
February 28, 2009
Growth: Causal Factors
Arnold Kling
Jeff Cornwall summarizes the panel on the outlook for the economy and entrepreneurs at the Kauffman Foundation forum this past weekend in Kansas City. In a later post, I will discuss the interesting ideas that were brought up at that... MORE
February 24, 2009
Finance: stocks, options, etc.
Arnold Kling
Bill Gross writes, The U.S. and global financial systems require credit creation and foreclosure prevention, not bank nationalization as currently contemplated by some. As you know, I differ. I want foreclosures and bank shutdowns. Nick Schulz points me to Chistopher... MORE
February 17, 2009
Growth: Causal Factors
Arnold Kling
In the Wall Street Journal, he writes, The depressions and panics of the 19th century ended without any fiscal stimulus to speak of, as did the gloom that followed the stock-market crash of 1987. Countercyclical fiscal policy may or may... MORE
February 14, 2009
Growth: Causal Factors
Arnold Kling
to a bet on the future of New York City. In a must-read article in the latest issue of The Atlantic, Florida says that New York will come out of the recession in good shape. I propose a $50 wager... MORE
January 9, 2009
Finance: stocks, options, etc.
Arnold Kling
Daron Acemoglu has written an essay on what the financial crisis means for economics. Highly recommended. I will excerpt and comment extensively. Thanks to Acemoglu's frequent collaborator Simon Johnson for the pointer, which I picked up from Mark Thoma. In... MORE
January 1, 2009
Growth: Causal Factors
Arnold Kling
When the real world gets you down, it's always nice to read about technology and the future. So I recommend the latest world question center from John Brockman, et al. His question for this year is, "What will change everything?"... MORE
December 23, 2008
Growth: Causal Factors
Arnold Kling
A reader points me to this letter from Milford Bateman about the impact of microfinance. first, a serious shortage of funds for small and medium-sized enterprises, which is deeply damaging because SMEs have by far the most sustainable growth and... MORE
November 16, 2008
Growth: Causal Factors
Arnold Kling
Reviewing Paul Collier's The Bottom Billion, William Easterly writes, Collier comes perilously close to another statistical fallacy known as selection bias. He chose the countries that belong to his Bottom Billion on the basis of their poverty today, and then... MORE
August 21, 2008
Growth: Causal Factors
Arnold Kling
Two more comments on the importance of private sector drivers of economic growth and inequality vs. policy drivers. First, I forgot to mention logistics as a driver of growth. Fed Ex and Wal-Mart represent that. Second, people keep talking about... MORE
July 31, 2008
Growth: Causal Factors
Arnold Kling
Megan McArdle writes, Ten thousand years or so after the first humans built sailing ships for trade, the coast still matters immensely. In fact, there are only two prosperous landlocked countries of any size: Austria and Switzerland. Read the whole... MORE
July 2, 2008
Business Economics
Arnold Kling
Mihir A. Desai, Dhammika Dharmapala, and Monica Singhal write, The Low Income Housing Tax Credit (LIHTC) program provides for the majority of new affordable housing units built in the U.S. and has resulted in the production of 1.5 million low-income... MORE
Growth: Causal Factors
Arnold Kling
Maarten Bosker, Eltjo Buringh, and Jan Luiten van Zanden write, The sociologist Max Weber introduced a distinction between ‘consumer cities’ and ‘producer cities’... The classical consumer city is a centre of government and military protection or occupation, which supplies services... MORE
Human Capital: Returns to entrepreneurs, skills, etc.
Arnold Kling
I have ordered their new book, after seeing it mentioned in David Leonhardt's column in the New York Times. An excerpt from the book is here. For cohorts born from the 1870s to about 1950, every decade was accompanied by... MORE
May 28, 2008
Growth: Causal Factors
Arnold Kling
He writes, In DC the message seems to be that the most important thing is who you know. You want to be an insider. In practice this seems to work much as in LA. There's an A List and you... MORE
May 26, 2008
Energy, Environment, Resources
Arnold Kling
MIT professors on biosolar cells, life extension, and other hopeful technologies. The discussions are extremely terse, and for that reason somewhat unsatisfying. Freeman Dyson writes, in the context of a review of William Nordhaus' book on global warming, I consider... MORE
May 13, 2008
Income Distribution
Arnold Kling
He speaks on this video. He is a very powerful speaker. One theme of the talk is the importance of really creative people to the economy. This may be a valid form of elitism, although I'd like to leaven his... MORE
April 29, 2008
Growth: Causal Factors
Bryan Caplan
From Timur Kuran's introduction to Julian Simon's posthumous The Great Breakthrough and Its Cause:What turned out, sadly, to be our last meeting took place in early January 1998, in Chicago, during that year's convention of the American Economic Association. Between... MORE
March 10, 2008
Growth: Causal Factors
Arnold Kling
Charles I. Jones writes, By the end of the 20th century, per capita income in the United States was more than 50 times higher than per capita income in Ethiopia and Tanzania. Dispersion across the 95th-5th percentiles of countries was... MORE
February 27, 2008
Growth: Causal Factors
Arnold Kling
Drew Endy says, Programming DNA is more cool, it's more appealing, it's more powerful than silicon. You have an actual living, reproducing machine; it's nanotechnology that works. It's not some Drexlarian (Eric Drexler) fantasy. And we get to program it.... MORE
February 26, 2008
Growth: Causal Factors
Bryan Caplan
Check out Garett Jones' new working paper, "The O-Ring Sector and the Foolproof Sector: An Explanation for Cross-country Income Differences." His motivation: Previous research indicates that within countries, 1 point of IQ raises wages by about 1%, but across countries,... MORE
February 11, 2008
Growth: Causal Factors
Arnold Kling
Russ Roberts interviews William Easterly. I highly recommend this podcast. Two points in particular struck me. 1. The "poverty trap" is a bit of an optical illusion. Seeing that in 2007 a lot of countries were in poverty is not... MORE
January 16, 2008
Macroeconomics
Arnold Kling
Alex Tabarrok writes, Forget the talk of recession. The world is about to enter a new era in which miracle drugs will conquer cancer and other killer diseases and technological and scientific advances will trigger unprecedented economic growth and global... MORE
December 27, 2007
Growth: Causal Factors
Arnold Kling
First, on figuring out the causes of growth A linear framework rules out the possibility that the effect of a change in the variable of interest may differ according to the initial level of that variable and that the effect... MORE
December 19, 2007
Finance: stocks, options, etc.
Arnold Kling
Nick Schulz sends me three interesting links. 1. A shining example of what I call a bogus mortgage lender. In 2004, Bohan Group, a due diligence underwriting company, was hired by a bank to double-check the suitability of mortgages written... MORE
December 11, 2007
Growth: Causal Factors
Arnold Kling
Tyler Cowen talks about a new scientific paper. He quotes from the UK Telegraph. Prof Hawks says: "We are more different genetically from people living 5,000 years ago than they were different from Neanderthals." Naturally, our friends at Gene Expressions... MORE
December 3, 2007
Growth: Causal Factors
Arnold Kling
Tyler Cowen writes, The rate of productivity growth is a fundamental determinant of long-run living standards. Yet when it comes to understanding or predicting this variable, economics has been sadly deficient, especially at the turning points. He refers to a... MORE
November 27, 2007
Growth: Causal Factors
Arnold Kling
Joel Kotkin writes, Urban centers that have been traditional favorites for young singles, such as Chicago, Boston, New York, Los Angeles and San Francisco, have experienced below-average job and population growth since 2000. San Francisco and Chicago lost population during... MORE
November 14, 2007
Growth: Causal Factors
Bryan Caplan
Greg Clark thinks labor quality is vital for economic growth. I'm skeptical - it's easy to believe that American labor is twice as productive as Somalian labor, but not 70 times. Still, while re-reading Anna Karenina, I couldn't help but... MORE
Growth: Causal Factors
Arnold Kling
As part of an online seminar, Adam Przeworski writes, When in 1993 Limongi and I reviewed studies of the effect of political regimes on economic growth, we found that the results perfectly fitted the ideological climate of the period when... MORE
November 10, 2007
Books: Reviews and Suggested Readings
Arnold Kling
Is called The Logic of Life. I hated the introduction. At one point, Harford writes, Might there not be such a thing as a rational blowjob? I don't think of myself as a prude, but I wound up muttering to... MORE
October 19, 2007
Growth: Causal Factors
Bryan Caplan
In the past, I've praised Robin Hanson for his literalism. Now a compelling article on Straussian textual interpretation has inspired Robin to propose a new theory of the Industrial Revolution:Modern growth began when enough intellectuals gained status not from ambiguity... MORE
October 8, 2007
Growth: Causal Factors
Arnold Kling
Megan McArdle asks this question more colloquially. there's a whole, very large literature on why Africa is particularly screwed up. The awful climate under which most of it labors. The bad maritime geography: apparently one of the two coasts offers... MORE
October 5, 2007
Growth: Causal Factors
Arnold Kling
I went to hear Greg Clark give a noontime seminar at Cato today. He is fairly persuasive in person. One thing about pursuing a line of thought for a long time when most people disagree with you is that your... MORE
October 4, 2007
Behavioral Economics and Rationality
Arnold Kling
Garett Jones writes, Are more intelligent groups of people better at cooperating? Repeated prisoner’s dilemma (RPD) experiments run at numerous universities since 1959 may hold the answer. Overall, the tendency is clear: Students at schools with higher average SAT and... MORE
October 3, 2007
Growth: Causal Factors
Arnold Kling
The New Economist quotes from a preliminary draft of a magnum opus from wunderkind Daron Acemoglu on economic growth. The central questions are these: (1) Why did the world economy not experience sustained growth before 1800? (2) Why did economic... MORE
October 1, 2007
Growth: Causal Factors
Arnold Kling
G. Pascal Zachary writes, Designers led by Mr. Bohr in Hillsboro, Ore., chose hafnium to replace silicon oxide, the venerable insulator in chips and a material used in making glass. Mr. Bohr also helped to identify new materials, whose identity... MORE
August 28, 2007
Growth: Causal Factors
Arnold Kling
No, this is not another post on Gregory Clark. Enrico Spolaore and Romain Wacziarg write, We find that measures of genetic distance have a statistically and economically significant effect on differences in income per capita, even when controlling for various... MORE
August 27, 2007
Economic Education
Arnold Kling
I recommend Robert Frank's lecture and Paul Romer talking about economic growth, as interviewed by Russ Roberts. Frank discusses economic education. He says that studies show that six months after an economics course, students are no better at answering basic... MORE
August 21, 2007
Growth: Causal Factors
Arnold Kling
The Lifeboat Foundation claims Cryonics is the high-fidelity preservation of the human body, and particularly the brain, after what we would call death, in anticipation of possible future revival. Cryonics is an important transhumanist technology not only because it is... MORE
Economic History
Arnold Kling
Tyler Cowen writes, Why should we aggregate income comparisons by country (or the whole world) rather than by city? World history looks very different if we do the latter. Aren't most countries relatively recent inventions anyway? More generally, I would... MORE
August 20, 2007
Growth: Causal Factors
Arnold Kling
A new magazine is called The Future of Things. (Note the futuristic ".info" domain space in the web address.) One article is on video eyeglasses. Consumers want a device that is natural looking, discreet, lightweight, and portable. They don’t want... MORE
August 14, 2007
Growth: Causal Factors
Bryan Caplan
No matter how many times a Julian Simon, Michael Kremer, or Steve Landsburg kills the Malthusian view that population growth reduces per-capita well-being, it comes back from the dead. The latest sighting of the Malthusian Zombie is in Greg Clark's... MORE
August 7, 2007
Economic History
Arnold Kling
New York Times science writer Nicholas Wade writes, Historians used to accept changes in people’s behavior as an explanation for economic events, like Max Weber’s thesis linking the rise of capitalism with Protestantism. But most have now swung to the... MORE
Economics of Education
Arnold Kling
Our Library of Economics and Liberty has a lot of interesting new stuff this week. 1. On Econtalk, Eric Hanushek argues that: --human capital is measured more accurately by performance on standardized tests than by years of schooling --better teachers... MORE
July 18, 2007
Growth: Causal Factors
Arnold Kling
Against Tyler Cowen's attack. I've spent much time in one rural Mexican village, San Agustin Oapan, and spent much time chatting with the people there... I'm also sure they if you gave them an IQ test, they would do miserably.... MORE
July 6, 2007
Economic History
Arnold Kling
Gregory Clark writes, Millenia of living in stable societies, under tight Malthusian pressures that rewarded effort, accumulation, and fertility limitation, encouraged the development of cultural forms--in terms of work inputs, time preference, and family formation--which facilitated modern economic growth. This... MORE
June 1, 2007
Growth: Causal Factors
Bryan Caplan
Arnold intrigues me:I've said before that the economics that I think gets no love is that of Douglass North, notwithstanding his Nobel Prize. One of the most interesting questions in economics is why we are so wealthy today compared to... MORE
May 22, 2007
Books: Reviews and Suggested Readings
Arnold Kling
Economic conferences rarely produce great papers. Entrepreneurship, Innovation, and the Growth Mechanism of the Free-Enterprise Economies, a conference dedicated to the work of William Baumol, is typically pedestrian, with particularly forgettable contributions from Kenneth Arrow and Robert Solow. However, there... MORE
May 15, 2007
Growth: Causal Factors
Arnold Kling
One of Tyler Cowen's readers asks for recommendations of books that examine the cultural requirements for liberty, and Tyler has a number of good suggestions. My instinct is to start with an evolutionary perspective. How did we get out of... MORE
April 11, 2007
Growth: Causal Factors
Arnold Kling
James R. Flynn writes, there is one way an individual can walk a personal path to enhanced cognitive skills. He or she must internalize the goal of seeking challenging cognitive environments -- seeking intellectual challenges all the way from choosing... MORE
April 8, 2007
Growth: Causal Factors
Arnold Kling
Western-style neoclassical economics was designed for settings where national institutions are already in place. In most of the world, they are not. The question is not "market vs. government," but how to strengthen the norms and institutions that will... MORE
April 5, 2007
Growth: Causal Factors
Bryan Caplan
Question for Arnold: How bad would things in Europe have to get to count as a "collapse"? Even if their per-capita GDP fell by 50%, they'd still be doing very well by world and historical standards. And it's hard to... MORE
April 3, 2007
Growth: Causal Factors
Bryan Caplan
Fellow Templeton prize-winner Kevin Schmiesing revisits our Cato dialogue on corruption, culture, and growth. Background: Among the symposium’s exchanges was one between George Mason University economist Bryan Caplan and me about the relative importance of “political culture” and “personal culture”... MORE
Growth: Causal Factors
Bryan Caplan
Last week, Cato hosted a conference with ISI for Templeton Enterprise Award winners. Full audio and video are available from the Cato website. Don't miss Thomas Woods, one of the smartest and most articulate historians I've ever met, and if... MORE
April 1, 2007
Economics of Education
Arnold Kling
Iqbal Quadir: The UN should empower the people, not empower their governments. And if they cannot empower the people they can just shut it off. My point is that helping the wrong side is harmful. So if they cannot help... MORE
March 12, 2007
Growth: Causal Factors
Arnold Kling
Two superstars, MIT's Daron Acemoglu and Harvard's Ed Glaeser, discuss the relationship on a Wall Street Journal feature. Ed says, While I yield to no one in my passion for liberty, the view that democracy is a critical ingredient for... MORE
February 16, 2007
Growth: Causal Factors
Bryan Caplan
Back in the early 90's, growth economists kept quoting Solow on the puzzling failure of the computer to boost productivity: "We see the computer age everwhere except in the productivity statistics." On my train ride home from NYC, I read... MORE
February 13, 2007
Growth: Causal Factors
Arnold Kling
Tyler Cowen chews, but does not swallow, a new paper by Greg Clark. Clark writes, we can test empirically whether the average person in 1800 was any better off than the people of 10,000 BC on any dimension, and the... MORE
February 12, 2007
Growth: Causal Factors
Arnold Kling
From the 2007 Economic Report of the President: the surge in productivity in the late 1990s appears to be a story of growth in industries making and using IT capital...efficiency growth since 2000 has been particularly strong in the high-tech... MORE
Growth: Causal Factors
Arnold Kling
New Nobel Laureate Edmund Phelps writes, The values that might impact dynamism are of special interest here. Relatively few in [France, Germany, and Italy] report that they want jobs offering opportunities for achievement (42% in France and 54% in Italy,... MORE
February 7, 2007
Growth: Causal Factors
Arnold Kling
Nick Schulz points to a lecture in 1963 by physicist Richard Feynman. The best web reference I can find for it is here. Some time ago, in about 1949 or 1950, I went to Brazil to teach physics. There was... MORE
January 29, 2007
Growth: Causal Factors
Bryan Caplan
Claims about dysgenics usually quickly degenerate into a big debate about nature vs. nurture. Steve Sailer interestingly argues that both sides are missing the deeper point: It's important to realize that for evaluating the likelihood of Idiocracy or Freakonomics, it... MORE
January 21, 2007
Growth: Causal Factors
Arnold Kling
Ben Muse has a useful post that links to several measures of corruption. For example, according to Transparency International, the best scoring countries are Finland, Iceland, and New Zealand. The worst are Iraq, Myanmar, and Haiti. The U.S. is 20th.... MORE
January 14, 2007
Growth: Causal Factors
Bryan Caplan
I've loved maps since I was a small child, but I've never seen one like this before. Neat.... MORE
January 12, 2007
Growth: Causal Factors
Arnold Kling
From my latest essay: As we get wealthier, we also become enhanced physically, cognitively, and morally, leading to a virtuous cycle of improvements to the standard of living. As the economy improves, human cognitive ability and moral reasoning improves, which... MORE
December 10, 2006
Growth: Causal Factors
Bryan Caplan
Arnold writes: If you think that culture matters but institutions do not, look at North and South Korea. If you think that culture does not matter at all, look at differences among different ethnic groups within countries. South Korea/North Korea... MORE
December 4, 2006
Growth: Causal Factors
Arnold Kling
Lawrence E. Harrison writes, the foregoing suggests the existence of a Universal Culture of Progress: the same Economic Behavior values, whatever their root, create prosperity in widely different geographic/climate, political, institutional, and indeed cultural settings. As far as we know,... MORE
Growth: Causal Factors
Bryan Caplan
Lawrence Harrison makes the case for the economic importance of culture in the latest issue of Cato Unbound: How then would Easterly explain why, in multicultural countries where the economic opportunities and incentives are available to all, some ethnic or... MORE
November 27, 2006
Books: Reviews and Suggested Readings
Arnold Kling
In my latest essay, I write, Continental Europe is set up to preserve large public sectors, large banks, and large corporations. For individuals, the promise is stable jobs, a stable business environment, and collective sharing of the costs of unemployment,... MORE
November 22, 2006
Growth: Causal Factors
Bryan Caplan
I just re-read a series I wrote on envy and the history of economic growth, and with the benefit of hindsight, there are few posts I'm prouder of. What do you think about a book inspired by... "What Took You... MORE
November 13, 2006
Growth: Causal Factors
Arnold Kling
David Warsh writes. Atoms make up the rival part of a particular good, that which may be possessed corporeally by just one person at a time -- a banana, say, or a Cuisinart, or a paperback edition of A Tale... MORE
November 7, 2006
Growth: Causal Factors
Arnold Kling
At the MIT economics alumni event this morning, Jerry Hausman spoke about his research on Wal-Mart. He says that Wal-Mart lowers prices to consumers primarily by bargaining down the prices charged by suppliers, such as Procter and Gamble. It also... MORE
November 2, 2006
Growth: Causal Factors
Arnold Kling
Tyler Cowen writes, Gregory Clark, an economics professor at the University of California, Davis, identifies the quality of labor as the fundamental factor behind economic growth. Poor labor quality discourages capital from flowing into a country, which means that poverty... MORE
October 24, 2006
Growth: Causal Factors
Arnold Kling
Jens Erik Gould reports in the New York Times, Years of rampant violent crime is not only robbing Latin America of significant private investment, but in some cases is stealing up to 8 percent from national economic growth, economists and... MORE
September 27, 2006
Growth: Causal Factors
Arnold Kling
E. Han Kim, Adair Morse, and Luigi Zingales write, Micro and macro have a relatively prominent presence during the 1970s and the 1980s (18% and 17%, respectively), but both experience a sharp decline in the 1990s (only 9% for each).... MORE
September 18, 2006
Labor Mobility, Immigration, Outsourcing
Arnold Kling
Sebastian Mallaby writes, In Let Their People Come, a new book published by the Center for Global Development, Lant Pritchett reports that if rich countries permitted extra immigration equivalent to 3 percent of their labor force, the citizens of poor... MORE
September 6, 2006
Cross-country Comparisons
Arnold Kling
A World Bank Study is filled with information on the cost of doing business in various countries. For example, they rank countries using an overall index. New Zealand has the most business-friendly regulation in the world, as measured by the... MORE
Growth: Causal Factors
Arnold Kling
Lant Pritchett writes, While the contribution of the new growth models to the internal logic of the economics discipline has been lasting, the bloom came off the rose of the explicit use of new growth models for policy purposes in... MORE
August 17, 2006
Economics of Education
Arnold Kling
My latest essay says, Imagine what might happen if one were to run a controlled experiment, pooling a group of students and randomly assigning them to different schools. Would the "good" suburban school really do better than the "failing" urban... MORE
July 28, 2006
Growth: Causal Factors
Arnold Kling
The Economist discusses the work of one of my favorite economists, Amar Bhide. But nowadays innovation—a complex, gradual process, often involving many firms making incremental advances over many years—is not much constrained by national borders, argues Mr Bhidé. Indeed, the... MORE
May 18, 2006
Growth: Causal Factors
Arnold Kling
Jonathan B. Tucker and Raymond A. Zilinskas write, In the near future, synthetic genomics technology should make it possible to recreate any existing virus for which the complete DNA sequence is known. At the same time, the advent of high-throughput... MORE
May 4, 2006
Growth: Causal Factors
Arnold Kling
From my latest essay: What [Meir] Kohn points out (in other chapters) is that medieval guilds, which we think of as backward institutions, helped to solve the lemons problem long before government inspection came along. Each guild jealously guarded its... MORE
April 12, 2006
Growth: Causal Factors
Arnold Kling
Craig J. Richardson writes, But while many problems cited by the IMF and others are important, they do not provide a full explanation for how a country can lose fifty years of economic progress in only five years. In fact,... MORE
April 10, 2006
Growth: Causal Factors
Arnold Kling
Carol Corrado, Charles Hulten, and Daniel Sichel write, the fraction of output growth per hour attributable to the old “bricks and mortar” forms of capital investment (labeled “other tangible” capital in the lower panel of table 5) is very small,... MORE
January 21, 2006
Growth: Causal Factors
Bryan Caplan
Apparently I'm not the only guy who teaches economics using cartoons. Larry White uses South Park to score a damning point against Jeff Sachs: One of the all-time greatest episodes of South Park is “Underpants Gnomes,” wherein the coffee-addled character... MORE
January 2, 2006
Growth: Causal Factors
Arnold Kling
Raffaella Sadun and John Van Reenen write, The rebound of US productivity growth has been a major economic development over the last decade. This “miracle” is linked to IT as the productivity acceleration was particularly strong in those sectors that... MORE
December 19, 2005
Growth: Causal Factors
Arnold Kling
In a new book, a team of World Bank economists writes, most of a country's wealth is captured by what we term intangible capital...Intangible assets include the skills and know-how embodied in the labor force. The category also includes social... MORE
December 6, 2005
Growth: Causal Factors
Bryan Caplan
The latest issue of the Cato Journal features a transcript from a chat Milton Friedman and Thomas Sowell had about the late great Peter Bauer. Highlights: Sowell: One of the things that [Bauer] mentioned in one of his later books... MORE
November 28, 2005
Growth: Causal Factors
Arnold Kling
From an article by Radha Chaurushiya in the Milken Institute Review. The information technology sector employs only one million people – a quarter of a percent of a labor force of more than 400 million. Output in the services sector... MORE
September 22, 2005
Growth: Causal Factors
Arnold Kling
In this essay, I write After Hurricane Katrina, the United States faced a shortage of gasoline, caused by the disruption of refining capability. My worst fears were that panic would break out, and Americans would rush to fill their tanks,... MORE
September 14, 2005
Politics and Economics
Arnold Kling
Tyler Cowen suggests four problems for policy research to solve. In several cases, his constraints on the solution are significant. For example, he wants to see A good health care plan that is practical, not too far from politically feasible,... MORE
September 13, 2005
Growth: Causal Factors
Bryan Caplan
In 1995, Sachs and Warner published "Economic Reform and the Process of Global Integration," one of my favorite "big think" papers on growth. The punchline: Basically any country can achieve decent growth by avoiding a handful of really stupid policies.... MORE
September 11, 2005
Growth: Causal Factors
Bryan Caplan
Lately I've been speculating that a high informal envy tax in primitive tribes was an important reason why growth was so slow for so long. I've also argued that this is equilibrium behavior. Jane Galt then raises the interesting question... MORE
September 7, 2005
Growth: Causal Factors
Bryan Caplan
I recently argued that the high informal envy tax common to primitive tribes helps explain why economic growth was so low for so long. Matt McIntosh at Conjectures and Refutations faults my story for failing to "really explain the phenomenon... MORE
September 3, 2005
Growth: Causal Factors
Bryan Caplan
At the semester's first Philosophy, Politics, and Economics Workshop, Tyler Cowen talked about the political economy of the Mexican village of Oapan. (For all the details, by his Markets and Cultural Voices). According to Tyler, being the political leader of... MORE
August 29, 2005
Growth: Causal Factors
Arnold Kling
Gizmag writes, The aptly-named LifeStraw is an invention that could become one of the greatest life-savers in history. It is a 25 cm long, 29 mm diameter, plastic pipe filter and purchased singly, costs around US2.00 ...LifeStraw is a personal,... MORE
August 17, 2005
Growth: Consequences
Arnold Kling
In my latest essay, I wrote, In my opinion, James Miller is making a bad bet. If you want to bet against Ray Kurzweil, you should look for patterns of prediction errors. As this essay will show, Kurzweil has been... MORE
July 31, 2005
Growth: Causal Factors
Bryan Caplan
A relatively unknown economist, Emily Anne Schneider, already seems to be giving up on her ambition to win the Nobel Prize. In any case, I still hope it goes to Anne Krueger first. Krueger is much more than the co-discoverer,... MORE
July 27, 2005
Growth: Causal Factors
Arnold Kling
In the second essay in a series, I write, Think of the economy as a restaurant, or, better yet, as a Food Court. Behind the Food Court there is a farm, where plants and animals grow spontaneously in adequate but... MORE
June 17, 2005
Growth: Causal Factors
Arnold Kling
I strongly recommend an interview with William Lewis, author of The Power of Productivity. Lewis discusses how the McKinsey Global Institute set about examining productivity across countries. They wound up looking at what I call the new paradigm in economics.... MORE
June 14, 2005
Growth: Causal Factors
Arnold Kling
Fredrik Erixon tosses down the gauntlet. The reason countries are poor is not that they lack infrastructure – be it roads, railways, dams, pylons, schools or health clinics. Rather, it is because they lack the institutions of the free society:... MORE
May 16, 2005
Growth: Causal Factors
Arnold Kling
Doug Campbell writes, Schneider in 2003 published "shadow economy" estimates (defined broadly as all market-based, legal production of goods and services deliberately concealed from the authorities) for countries including: Zimbabwe, estimated at a whopping 63.2 percent of GDP, Thailand's at... MORE
May 5, 2005
Growth: Causal Factors
Arnold Kling
An interesting interview with Jeremy Siegel. In 50 years the United States will be more aged than all of Florida is today, but we will be, existing in a younger world. So, what I see is exactly the same pattern.... MORE
April 29, 2005
Growth: Causal Factors
Arnold Kling
Another Milken Institute Review article is on aging Europe. I am pretty familiar with the low birth rate and its implications for the size and age distribution of Europe's population. However, this was news to me: few Americans seem aware... MORE
March 30, 2005
Growth: Causal Factors
Arnold Kling
Jason Shogren, Richard Horan, and Erwin Bulte argue that free trade contributed to humans' outcompeting Neanderthals. Archaeological evidence exists to suggest traveling bands of early humans interacted with each other and that inter-group trading emerged, says Shogren. Early humans, the... MORE
March 7, 2005
Growth: Causal Factors
Arnold Kling
A reader of my piece on math and economics connected me to this 1998 Forbes cover story on Reuven Brenner. Forbes Global: Finance is central to your view of creating wealth. Why is it so important? Brenner: Because finance is... MORE
March 2, 2005
Economic Education
Arnold Kling
In a wide-ranging essay, I question the dominance of math in advanced economics. The raising of the mathematical bar in graduate schools over the past several decades has driven many intelligent men and women (perhaps women especially) to pursue other... MORE
February 16, 2005
Growth: Causal Factors
Arnold Kling
Stephen Daley and Brian Hooks write, The reason some of the poorest countries in the world need microfinance is because deep-rooted institutional problems make the general financial sector unworkable. And until these problems are addressed, we are reduced to celebrating... MORE
Growth: Causal Factors
Bryan Caplan
Tim Worstall provides some entertaining insight into the neverland of Communist and post-Communist economic statistics. It's gotten rather trendy to say that former Communist countries are worse off than they were in 1989 or 1991. The main problem with these... MORE
January 20, 2005
Growth: Causal Factors
Arnold Kling
At lunch today with Robin Hanson, guest blogger Bryan Caplan, and blogging competitor Tyler Cowen, someone brought up the subject of computers and productivity. I am scanning Brad DeLong's reading list for a course in American Economic History, and naturally... MORE
January 11, 2005
Growth: Causal Factors
Arnold Kling
I've started reading The Anglosphere Challenge by James C. Bennett. I'm only up to Chapter One, but already it is very stimulating. For example: In popular misconceptions, it is imagined that in America and the other advanced countries people will... MORE
November 24, 2004
Growth: Consequences
Arnold Kling
Following Marginal Revolution's recommendation, I bought Ian J. Deary's Intelligence, which is a summary of research on IQ testing. For me, the most interesting chapter was on the Flynn effect (see also this post), which is that IQ scores have... MORE
November 2, 2004
Growth: Causal Factors
Arnold Kling
Bryan Caplan writes, studying the public's beliefs about economics...income growth seems to increase economic literacy, even though income level does not. In other words, poor people whose income is rising—like recent immigrants—have more than the average amount of economic sense;... MORE
October 31, 2004
Growth: Causal Factors
Arnold Kling
Ronald Bailey reports, Nanotechnology would make it possible for 100 billion people to live sustainably at a modern American standard of living, while indoor agriculture using high-efficiency inflatable ten-pound diamond greenhouses would help restore the world's ecology. The ultimate limit... MORE
October 10, 2004
Growth: Causal Factors
Arnold Kling
People with what Bryan Caplan calls "pessimistic bias" see the world in zero-sum terms, or worse. Kevin Brancato points out a pattern in Bill Gates' thinking that is just the opposite: "China and India are the big change agents for... MORE
October 8, 2004
Growth: Causal Factors
Arnold Kling
Tim Worstall comments on a paper by William Nordhaus on the private vs. social returns of innovation. As a factor of production, the entrepreneur class (and yes, we have been considered for decades to be a factor of production to... MORE
October 2, 2004
Economic Philosophy
Arnold Kling
Various economics blogs, such as Division of Labour, are speculating on candidates for this year's Nobel Prize in economics. One thing I've noticed is that the winners tend to be people with concepts named after them. Coase theorem. Nash equilibrium.... MORE
September 20, 2004
Growth: Causal Factors
Arnold Kling
Alison Wolf challenges the conventional wisdom. large international studies often find a negative relationship between education and growth rates. Egypt is a classic example of this. Between 1970 and 1998, its primary school enrollment rates grew to over 90%, secondary... MORE
Growth: Causal Factors
Arnold Kling
Charles I. Jones writes, The nonrivalry of ideas implies that increasing returns to scale is likely to characterize production possibilities. This leads to a world in which scale itself can serve as a source of long run growth. The more... MORE
August 16, 2004
Growth: Causal Factors
Arnold Kling
Whoever is writing the lead editorials for the Washington Post (I suspect Sebastian Mallaby) on economic policy issues in this year's election is providing pieces that are highly educational. Today's editorial is called The Growth Mystery. we don't know how... MORE
July 15, 2004
Growth: Causal Factors
Arnold Kling
Virginia Postrel cites the research of McKinsey's William L. Lewis on international differences in productivity growth. Food processing in Japan, Mr. Lewis writes, "has more employees than the combined total of cars, steel, machine tools and computers," or about 11... MORE
July 12, 2004
Labor Market
Arnold Kling
The OECD looks at total hours worked in its member countries. The performance of US labour markets also looks quite strong when assessed in terms of hours worked per capita, a more comprehensive measure of “labour utilisation” than the employment... MORE
Growth: Causal Factors
Arnold Kling
The Fed's Roger W. Ferguson speculates on the sustainability of recent high productivity growth. Ferguson and William Wascher's article on the subject just appeared in the Journal of Economic Perspectives. The article says, Productivity booms seem to involve four key... MORE
June 23, 2004
Growth: Causal Factors
Arnold Kling
Two piece in the Wall Street Journal challenge the idea that export-led growth is the path to economic success. Amar Bhide writes, The Indian software industry now employs around half a million professionals. Under optimistic projections, the industry will add... MORE
June 21, 2004
Growth: Causal Factors
Arnold Kling
Tyler Cowen points to a historical timeline of the cost of data storage on hard disk drives. According to the timeline, the cost fell below $100 per megabyte in May of 1984. It fell below $1 per megabyte ten years... MORE
June 17, 2004
Growth: Causal Factors
Arnold Kling
In an essay on the past and present positions of those who advocate big government, I write, The view that only large industrial enterprises matter seems preposterous now. If Galbraith had been right, then the industrial structure of the 1960's... MORE
June 9, 2004
Growth: Causal Factors
Arnold Kling
Robert E. Lucas, Jr. (Nobel, 1995), sounding much like Brad DeLong, gives a historical overview of economic growth which is Malthusian up until around 1800 (meaning that population growth ate up, so to speak, increases in production), followed by a... MORE
May 31, 2004
Growth: Causal Factors
Arnold Kling
Randall Parker sent a link to a cross-country comparison of GDP per capita and the percent of the population with verbal IQ's above 106. The equation fit very well, which led me to wonder how such a model could explain... MORE
May 28, 2004
Growth: Causal Factors
Arnold Kling
William Baumol compares the innovation strategies and results of large firms with those of small entrepreneurial firms. most private sector expenditure on research and development is attributable to very large corporations. These corporations are prime employers of scientists and engineers,... MORE
May 26, 2004
Labor Market
Arnold Kling
Bruce Bartlett pointed to a Dallas Fed analysis of the causes and consequences of higher productivity. One of the sections, on the evolution of work, says The United States will continue to move up the hierarchy of human talents as... MORE
May 17, 2004
Institutional Economics
Arnold Kling
I just breezed through Michael Barone's Hard America, Soft America. Reviewers tend to quote the following passage (p. 12). UPDATE: see also this article by Barone which leads with the sentence I quote. For many years I have thought it... MORE
May 11, 2004
Growth: Causal Factors
Arnold Kling
Tyler Cowen points to a paper by Foster, Haltiwanger, and Krizan (unlike Cowen's link, my link goes to the full paper) that stresses the importance for productivity growth of resources leaving inefficient firms and going to efficient firms. I was... MORE
May 7, 2004
Economics of Health Care
Arnold Kling
Nick Schultz cites work by Amir Attaran showing that drug company patents are not an obstacle to health care in poor countries--in fact, drug companies do not even bother to obtain patents in the poorest countries. Attaran's research concludes that... MORE
March 29, 2004
Growth: Causal Factors
Arnold Kling
Andrew David Chamberlain points to a World Bank study written by Andrei Shleifer, among others, of barriers to entrepreneurship. Countries with heavier regulation of entry have higher corruption and larger unofficial economies, but not better quality of public or private... MORE
February 26, 2004
Growth: Causal Factors
Arnold Kling
Olivier Blanchard sees hope. In the United States, over the period 1970 to 2000, GDP per hour increased by 38%. Hours per person also increased, by 26%, so GDP per person increased by 64%. In France, over the same period,... MORE
February 2, 2004
Growth: Causal Factors
Arnold Kling
I once wrote an essay that I called The Great Race, in which I argued that two factors that affect the future are technological change in the private sector and the growth of entitlement spending. Many posts in this blog... MORE
January 30, 2004
Growth: Causal Factors
Arnold Kling
Alex Tabarrok writes (it's short, so I'll quote the whole thing, except for links), The U.S. is no longer pushing privatization of the Iraqi oil industry primarily because the Iraqi's presently in control don't want it privatized for "nationalistic" reasons.... MORE
January 26, 2004
Growth: Causal Factors
Arnold Kling
Will Wilkinson argues that ethics are an important part of economic infrastructure. At bottom of both well-functioning markets and states are norms of behavior that dispose people to cooperate, to keep agreements, and to recognize and respect claims to property... MORE
January 4, 2004
Growth: Causal Factors
Arnold Kling
Edmund S. Phelps writes, My thesis is that the degree of dynamism in a nation's economy hinges on its development of some key economic institutions - company law and corporate governance, the population's preparation for business life, the development of... MORE
January 2, 2004
Growth: Causal Factors
Arnold Kling
What will economic growth look like in the 21st century? Mark Bahner solicited answers to this question from many economists and pundits, but only a few replied. Bahner's predictions are relatively optimistic. He foresees worldwide average GDP per capita rising... MORE
December 23, 2003
Growth: Causal Factors
Arnold Kling
In a generally skeptical post on the topic of using foreign aid to stimulate economic growth, Tyler Cowen asks, If you know of any good studies on what predicts future (not current) growth, in the Granger-causal sense, please let me... MORE
December 7, 2003
Growth: Causal Factors
Arnold Kling
Alberto Alesina and Francesco Giavazzi write, The labor market flexibility in the US service sector is truly remarkable. During recessions and booms, you can feel the changes in quality and number of waitresses in restaurants, in the size of staffs... MORE
December 3, 2003
Growth: Causal Factors
Arnold Kling
If the nanotechnology revolution takes off, what will be the economic consequences? Brad DeLong proposes this analytical framework: What commodities--what goods and services--become extraordinarily cheap as a result of the technological revolution? What human activities--what jobs and skills--become key bottlenecks,... MORE
October 23, 2003
Growth: Causal Factors
Arnold Kling
In an essay on nonlinear thinking, I wonder if economists spend too much time studying calculus. economists know that many of the processes that are important in our field, such as compound interest and economic growth, are nonlinear. But the... MORE
October 12, 2003
Growth: Causal Factors
Arnold Kling
Jonathan Rauch argues that the absence of a plan for post-war Iraq is a feature, not a bug. In truth, the planning mind-set is exactly wrong for Iraq. Anything might have happened after the war: a flood of refugees, a... MORE
September 11, 2003
Institutional Economics
Arnold Kling
Given the situation in Iraq, an economic analysis of the problem of developing political institutions would seem timely. Tyler Cowen and Christopher J. Coyne have drafted a paper on the topic. They write, Our core thesis is the following: reconstructions... MORE
September 7, 2003
Growth: Causal Factors
Arnold Kling
On one of the comment threads, a reader asked me if I disagreed with the economics of Lawrence Kudlow. "Honestly, I never thought he had any to disagree with," was how I began my reply. Let me revise and extend... MORE
August 23, 2003
Growth: Causal Factors
Arnold Kling
Peter Gallagher links to a speech by Gary Banks, Chairman of Australia's Productivity Commission, on that country's high productivity growth of the past several years. He credits improvements in policy. As you know, the reforms really began with the lowering... MORE
July 2, 2003
Growth: Causal Factors
Arnold Kling
In the discussion of perspectives on Social Security, I suggested that wages tend to rise with productivity, so that indexing Social Security to wages leads to higher benefits than indexing it to prices. Eric Krieg asked, Arnold, why are wages... MORE
May 28, 2003
Supply-side Economics
Arnold Kling
In this essay, I take issue with Paul Krugman's claim that the liquidity trap is relevant to Japan and the United States. Krugman has learned the wrong lessons. He thinks that the bank bailouts are a good thing, that Japan's... MORE
May 23, 2003
Growth: Causal Factors
Arnold Kling
Steven Kirchner points to a speech by Australian Secretary to the Treasury Ken Henry on the topic of the determinants of growth. Henry decomposes output per capita into output per hour worked times hours worked per working-age person times the... MORE
May 19, 2003
Social Security
Arnold Kling
Steven Nyce and Syl Schieber analyze the likelihood that the size of the labor force will start to decline in many developed countries. It now appears that many of the developed economies will experience periods in which the numbers of... MORE
April 25, 2003
Growth: Causal Factors
Arnold Kling
I was taught in graduate school that economic growth has two main drivers: the savings rate, which determined the steady-state capital-labor ratio; and the efficiency of labor, which increases over time due to technological change and better human capital. Yesterday... MORE
April 7, 2003
Growth: Causal Factors
Arnold Kling
Brad DeLong argues that the failure of many Internet-based enterprises does not imply a social loss. profits are not the same thing as social value...Profit is primarily a signal about the size of a set of enterprises: If too small,... MORE
March 11, 2003
Growth: Causal Factors
Arnold Kling
Ben Wattenberg analyzes the world population outlook. In the United Nations' most recent population report, the fertility rate is assumed to be 1.85, not 2.1. This will lead, later in this century, to global population decline. He points to a... MORE
March 5, 2003
Growth: Causal Factors
Arnold Kling
The Economist notices that the English language is gaining in importance. This trend was spotted earlier by yours truly, and before that by Paul Krugman. Brad DeLong echoes my view that the use of English by India's educated elite is... MORE
February 24, 2003
Growth: Causal Factors
Arnold Kling
Economics teachers and students will want to read Jon "Hannibal" Stokes' article on Moore's Law, because 1. In my opinion, Moore's Law is the most important economic phenomenon of our time. See also William Nordhaus, The Progress of Computing, and... MORE
February 12, 2003
Growth: Causal Factors
Arnold Kling
In reading The Next Fifty Years, a collection of essays edited by John Brockman of Edge.org, I was struck by the following quote from Rodney Brooks, director of MIT's Artificial Intelligence laboratory. Our thirty-year goal is to have such exquisite... MORE
February 10, 2003
Growth: Causal Factors
Arnold Kling
In an article for the Concise Encyclopedia of Economics, Paul Romer explains the difference between old and new growth theory. A traditional explanation for the persistent poverty of many less developed countries is that they lack objects such as natural... MORE
Growth: Causal Factors
Arnold Kling
The Internet has created new opportunities for international trade in information services. In this essay, I argue that this is creating a trade barrier for non-English speakers. For now, the Internet revolution is boosting the economic prospects of the English... MORE
February 5, 2003
Growth: Causal Factors
Arnold Kling
Technology analyst Joi Ito offers this diagnosis of Japan's long slump. Post-war Japan consolidated power in the ruling party. People were educated to be obedient. Harmony was maintained by co-opting or disabling people or organizations that could threaten the system.... MORE
January 31, 2003
Growth: Causal Factors
Arnold Kling
Yesterday, having been lured downtown by an opportunity to gaze into Virginia Postrel's eyes, I stumbled on Nobel Laureate Michael Spence giving a talk on the Internet and productivity. Some major points were: 1. Before the Internet, computing was a... MORE
January 27, 2003
Growth: Causal Factors
Arnold Kling
Brad DeLong describes the 20th century as "slouching towards utopia." He views prospects for the next 20 years as even brighter. Today's ongoing revolutions in biotechnology-and-information technology see technological progress of at least 15% per year in industries that make... MORE
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