Bryan Caplan and David Henderson

Growth: Causal Factors

A Category Archive (365 entries)

Diseases of Poverty: Neglecting the Obvious

Economics of Health Care
Bryan Caplan
Before blogging Ebola, I've been reading up on the broader category of "diseases of poverty."  The low-point of the Wikipedia entry:There are a number of proposals for reducing the diseases of poverty and eliminating health disparities within and between countries.... MORE

The Wonder of Markets

Growth: Causal Factors
David Henderson
"Blue Jeans meeting." That's what I think showed up on my cell phone at about 6:20 this morning. I didn't know what it meant and I ignored it. It turned out that it was a reminder to talk to an... MORE

Saturday Morning Breakfast Cereal has joined The Oatmeal, XKCD, and Botched Spot as one of my favorite comics. This particular installment was especially brilliant. It proposes a browser plug-in that makes the opportunity cost of military hardware explicit. The night... MORE

What kind of Great Stagnation?

Macroeconomics
Scott Sumner
Paul Krugman likes to mock extremely talented conservative economists every time they make a statement that seems inconsistent with the textbook AS/AD model of demand shock-created recessions. And yet as far as I can tell, the views of people like... MORE

Ending slavery made America richer

Growth: Causal Factors
Scott Sumner
Matt Yglesias has a good post that goes right at the "smiley-face" view of early US history--that we were a great country save for the regrettable aberration of slavery. He doesn't pull any punches: Specifically, white Americans conquered a vast... MORE

The Fiscal Prognosis

Fiscal Policy
Bryan Caplan
Here's how bad the CBO's now expects the long-run fiscal crisis to be:The unsustainable nature of the federal tax and spending policies specified in current law presents lawmakers and the public with difficult choices. Unless substantial changes are made to... MORE

What about Asia?

Growth: Causal Factors
Scott Sumner
Thomas Piketty's book is focused on wealth inequality, but he offers opinions on a wide variety of topics. The vast majority of those opinions are left wing, and in my view most are wrong. Here's one example (p. 481): Modern... MORE

I, Crayon

Growth: Causal Factors
Art Carden
Here's a Sesame Street classic. I remember this from when I was a kid; we watched it a few times with our kids Monday morning. The sheer amount of knowledge embodied in this whole process is mesmerizing. And of course,... MORE

Why can't the US be more like Europe? Why can't we have decent economic growth and an extremely generous welfare state? Here's one reason: we spend an enormous amount of money on the military. Wikipedia's "List of Countries by Military... MORE

Don Boudreaux on the Hockey Stick of Human Prosperity

Growth: Causal Factors
Art Carden
Don Boudreaux of George Mason University and Cafe Hayek offers a short discussion of the explosion in standards of living over the last few centuries, courtesy of Marginal Revolution University:... MORE

On Monday, we celebrated our daughter's fourth birthday. Today, we celebrate our younger son's second birthday. On Saturday, we will celebrate my wife's and my eleventh anniversary. When we found out we were expecting our third a few years ago,... MORE

Tyler Cowen versus Frederic Bastiat

Cost-benefit Analysis
David Henderson
And also versus Julian Simon and Alex Field Counterintuitive though it may sound, the greater peacefulness of the world may make the attainment of higher rates of economic growth less urgent and thus less likely. This view does not claim... MORE

Reply to Cardinal Rodriguez Maradiaga

Growth: Causal Factors
David Henderson
At a conference titled "Erroneous Autonomy: The Catholic Case Against Libertarianism," Cardinal Oscar Rodriguez Maradiaga attacked the free market, calling it "a new idol." This is my response. I understand that in writing it, I am assuming that in each... MORE

The First Fundamental Law of Capitalism

Income Distribution
Scott Sumner
Suppose that I made the following claim: The formula M*V = P*Y is a pure accounting identity. It can be applied to all societies in all periods of history, by definition. Though tautological, it should nevertheless be regarded as the... MORE

Quotes From a Colloquium

Growth: Causal Factors
David Henderson
A few weekends ago, I attended a colloquium in San Diego at which we discussed readings in economic institutions and economic growth. We discussed a lot of chapters from Daren Acemoglu and James A. Robinson, Why Nations Fail, which I... MORE

"Hollowing Out": A Global Perspective

Economic History
Bryan Caplan
Stagnationists often complain about the "hollowing out" of the economy: Well-paid middle-income jobs are disappearing.  Normally, they only look at the United States and other developed countries.  As a cosmopolitan, however, I'd rather discover what's been happening to incomes at... MORE

Myth of the Rational Voter: The Animated Series

Behavioral Economics and Rationality
Bryan Caplan
Learn Liberty is doing a four-video series on The Myth of the Rational Voter's four big economic biases.  Production values are very high, and the animators used so many of my visual ideas that I can now justifiably re-classify my... MORE

The Great Grandson Also Rises

Growth: Causal Factors
David Henderson
Our former co-blogger, Arnold Kling, has an excellent review on Econlib of Gregory Clark's latest book, The Son Also Rises. The review is titled "The Heritability of Social Status." You may have noticed that Clark, an economist historian at UC... MORE

Acemoglu and Robinson on Mobutu

Growth: Causal Factors
David Henderson
I'm at a conference in San Diego in which the participants are discussing various articles and book chapters on the causes of economic growth. A number of chapters are from Daren Acemoglu and James A. Robinson, Why Nations Fail, which... MORE

Earlier today, I read an article trumpeting the "success" of a charity drive that received a lot of donations and that raised a lot of money. I'm not going to link to the article because I don't want to single... MORE

Krugman's Kontradictions or Contradictions?

Fiscal Policy
David Henderson
Blogger and frequent Econlib Feature Article contributor Robert P. Murphy has coined the term "Krugman Kontradiction." I believe, and I think Bob agrees with me, that Krugman is very clever and crafty. (Or should that be Klever and Krafty?) And... MORE

Oppression is a Negative-Sum Game

Income Distribution
Art Carden
Oppression is nothing new, and it has caused suffering that echoes across generations. That one group was oppressed does not mean that members of the oppressing group--or at least their descendants--benefited from it. In a post with which I largely... MORE

Economic Possibilities for Our Grandchildren*

Institutional Economics
Art Carden
Samford goes on Fall Break this weekend. In my principles of macro class, we just spent two weeks talking about the institutional causes of the wealth of nations as well as the Solow growth model. As you get ready for... MORE

A few weeks ago The Atlantic ran a great story about "How the NFL Fleeces Taxpayers" (HT: Reddit). Stadium subsidies are a classic example of failure to appreciate "what it not seen." As Dennis Coates and Brad Humphreys point out... MORE

Bleg: The Right Way to Read Tyler

Economic History
Bryan Caplan
Please read Tyler's post, then answer the following two questions:1. What percentage of Tyler's readers never have and never will read anything else about the relevance of changing household size for claims about economic stagnation?2. What lesson about the relevance... MORE

The We in Wealth

Behavioral Economics and Rationality
Bart Wilson
The first economic experiment in our Humanomics class is based upon my research article with Sean Crockett and Vernon Smith. The idea for the project came from an honors course that Vernon and I have co-taught using experiments to teach... MORE

Galton's Demented Idea

Economic Philosophy
Bryan Caplan
In 1873, Francis Galton, founding father of modern statistics and behavioral genetics, publicized a demented idea.  It begins promisingly:My proposal is to make the encouragement of the Chinese settlements at one or more suitable places on the East Coast of... MORE

Twitter vs. Flying Cars

Growth: Causal Factors
David Henderson
You've probably heard that line from Peter Thiel: We wanted flying cars, instead we got 140 characters. That line expressed his disappointment about how technology has turned out. Now, when rich libertarian entrepreneurs, especially ones I admire as I do... MORE

Better Mixed Economy: Henderson on Litan and Schramm

Growth: Causal Factors
David Henderson
What should be done to increase the growth rate of the sluggish U.S. economy? This is the main issue that economists Robert Litan and Carl Schramm address in their book, Better Capitalism. The book is mistitled. As valuable as many... MORE

The Present and the Future Both Need Bastiat

Growth: Causal Factors
Art Carden
I agree with Bryan: Frederic Bastiat's essay "What is Seen and What is Not Seen" is "the pinnacle of profundity." Indeed, on re-reading Bryan's post on Bastiat from last summer, I realized he wrote most of what I was planning... MORE

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

My take on Reinhart and Rogoff

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

AI and GE

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

Some Evolutionary Food for Thought

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

Will The End of Sleep Reduce Wages?

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

The Joy of Microwaves

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

Postrel on Progress

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

Independence and Growth

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

Why are Economic Miracles Rare in Colonies?

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

Why Is the National Return to Education So Low?

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

Did Nations that Boosted Education Grow Faster?

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

Friday Night Video: Life Without Capitalism

Growth: Causal Factors
David Henderson
The Fund for American Studies put out this excellent 6-minute video. Posted with permission.... MORE

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

Trustworthiness > Trust

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

Gordon on Growth: Parting Thoughts

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

Gordon on Growth: A Critique

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

Robert J. Gordon on Growth

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

The Great Factor Substitution

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

China's Economic Growth

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

Getting Rich in America

Finance
David Henderson
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

Enrico Moretti on Mobility

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

Brink Lindsey's New eBook

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

Peter Thiel's Question

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

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

Adam Smith on U.S. Independence

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

Mexico's Economic Growth

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

Final Reply to Ridley

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

Rejoinder to Ridley on Innovation and Population

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

Ridley, Simon, Population, and Innovation

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

The Anti-Mandel

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

"Does Technology Drive the Growth of Government?" Bleg

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

What I'm Reading

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

The Idea Factory

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

I Believe These Are Related

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

The Unsung

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

Scott Sumner on The Great Stagnation

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

Hal Varian

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

Podcasts

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

Diamandis and Kotler

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

Discussing Innovation with Alex Tabarrok

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

Revisiting Goldin and Katz

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

Alex Tabarrok on Innovation

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

Real Real GDP

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

Tyler Cowen Makes a Suggestion

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

Klingian Paradox of Thrift Watch

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

Trends to Watch, Updated

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

Tabarrok on Innovation

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

Various Sentences to Ponder

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

Tabarrok's Roadmap Out of the Slight Stagnation

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

Video of the Year

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

The Roaring Thirties

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

Sentences I do not Understand

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

Learning Economics

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

Bryan's Question and Stagnation

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

The Toothpick Problem

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

Tell Me the Growth Rate

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

Scientific Stagnation?

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

As the World Ages

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

Supplemental Pessimism

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

About What Am I Optimistic and Pessimistic?

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

What's the Big Story?

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

Transforming Education and Health Care

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

Ability, Morality, and Prosperity: A Paper and a Report

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

The Barber (Not) Next Door

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

Larry Summers on the New Commanding Heights

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

Matt Ridley on the Christians and the Romans

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

Breed Like Beckhams

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

The Problem with Greece

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

How William Easterly Declared Independence

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

David Henderson's Persuasive Case

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

Henderson on Cowen's Great Stagnation

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

Networks and Growth

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

The Fourth Sector

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

Worth Reading

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

Bryan's Challenge

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

Greg Clark at the Movies

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

Replies to Critics on Cato Unbound

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

Trade, Mechanization, and Displacement

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

How Will I Rejoin the Developed World?

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

Mike Munger on Microfinance

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

Brink Lindsey on Innovation and Growth

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

Garett Jones on IQ and Economic Growth

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

A Quick Case for Charter Cities: Memo to the Gates Foundation

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

Ken Rogoff and Others

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

The McCloskey's Speech

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

Ideology and Tyler Cowen's Stagnation Thesis

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

Great Stagnation or Lousy Data?

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

The Rest of The Great Stagnation

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

Lindsey on the Great Slight Stagnation

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

The Great Stagnation, Chapter One

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

The Great Reconfiguration, Again

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

Peter Thiel, Cowenian

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

For Economics Teachers

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

Robin Hanson on the Singularity

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

Julian Simon and I vs. Paul Krugman

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

Self-Recommending

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

Farmers, Foragers, and Bourgeios Virtues

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

The Shifty Economy

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

Labor Quality and Multiplicative Growth

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

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

The Technofuture

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

Inspiration from Will Smith

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

Cato Unbound, Self-Recommending Edition

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

Morning Recommendations

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

Culture and Institutions

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

Germany's Economic "Miracle"

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

Growth Clusters

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

Sumner on Neoliberalism

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

Charlton Controversy, Continued

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

Idiocracy

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

From the AER

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

The Baumol Puzzle

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

Focusing on Entrepreneurs

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

Morning Recommendations

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

Sumner on World Economic Growth

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

Kling Interviewed

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

From the Vault: My 1983 Memo on Population Growth

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

The Singularity is Not so Near

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

How Much is Government Costing Us?

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

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

Robin Hanson on Long-term Growth

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

From Poverty to Prosperity Watch

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

Spermsmanship

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

From Poverty to Prosperity Event

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

Market Failure in Education

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

Gender Imbalances and Growth Reconsidered

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

Mandel on FP2P

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

Various

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

Jonah Goldberg on Haiti

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

Murphy's Catch-Up Contradiction

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

David Brooks on Haiti

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

Hayek and Central Planning

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

FP2P Watch

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

Rules and Culture

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

Real Recovery

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

FP2P Watch

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

Various Follow-ups

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

Northian Pessimism in FP2P

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

The Power of Productivity

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

Phelps on the Future of Capitalism

Austrian Economics
Arnold Kling
Nobel Laureate Edmund Phelps writes a long interesting article. Excerpts and my comments below the fold.... MORE

Some Reviews of Book 1

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

China's Allocation of Capital

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

Reverse Stimulus

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

From Poverty to Prosperity Watch

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

From Poverty to Prosperity Watch

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

So You Want to Do Good

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

Book Update: Available for Order

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

The State of the Economy, II

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

Balan's Challenge

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

Education and Growth

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

From Poverty to Prosperity Watch

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

Democracy, Dictatorship, and the Variance of Growth

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

How Growth Happens: CostCo Edition

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

From Poverty to Prosperity Watch

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

Caught My Eye

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

Robin's Atoms

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

Virtual Cornucopia

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

A Contestable Market

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

From Poverty to Prosperity Watch

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

Ed Glaeser on New York

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

Obama to Africa: Don't Imitate Me

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

Favorite Economics Dialogues in Movies

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

Against Growth Agnosticism

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

From Poverty to Prosperity Watch

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

From Poverty to Prosperity Watch

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

Stuck in the Natural State?

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

Tyler Cowen and Alex Tabarrok

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

Tyler Hits a Home Run

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

These Sound Interesting

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

Tale of Two Islands

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

Lessons from Mancur Olson

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

Individualism, Institutions, and Growth

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

The Future

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

A Few Links

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

Amar Bhide Monday

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

I Challenge Richard Florida

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

Acemoglu on the Economy and Economics

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

Techno-escapism

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

A Microfinance Skeptic

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

Easterly on Collier and Correlation

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

Logistics and Telecom Deregulation

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

Geography and Economic Destiny

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

New NBER working papers

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

Producer and Consumer Cities

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

Goldin and Katz

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

Paul Graham on Cities

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

Various Technology Readings

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

Richard Florida on Location in Silicon Valley

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

Kuran on Simon: A Fitting Epitaph

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

International Inequality

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

Fun to Read

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

Coolest Macro Paper I've Seen in Years

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

Easterly on World Poverty

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

Financial Crises and Real Growth

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

Growth Wisdom from Charles Kenny

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

What Nick is Reading

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

Faster Human Evolution

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

Predicting the Error Term

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

Creative Class Warfare

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

Tolstoy, the Clarkian

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

Online Seminar

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

Tim Harford's Next Book

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

Did Literalism Saved the World?

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

Why is Africa Still Under-developed?

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

Stanford Marshmallow Experiment

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

Prisoners' Dilemma and The Unmentionable

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

Acemoglu on Growth

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

Process Innovation

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

Is Economic Growth Genetic?

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

For Introductory Economics

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

More Futurism

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

Cowen, Clark, and Malthus

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

Futurism

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

The Malthusian Zombie

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

Farewell to Alms Watch

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

Around our Library

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

I'll Defend IQ

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

The IQ Revolution?

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

North on One Foot?

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

North and Weingast

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

Culture, Capitalism, and Freedom

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

Flynn on the Flynn Effect

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

Quote of the Day

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

What's a Collapse? What's a Verge?

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

The Cause of Corruption

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

Culture of Enterprise Conference

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

Helping the Wrong Side

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

Democracy,Education, and Growth

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

Computers, Growth, and Google

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

The Malthusian Trap

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

The CEA on Productivity

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

Phelps on Culture and Dynamism

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

Feynman's Question

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

Dysculturation?

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

Measuring Corruption

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

A Gem for the World's Econo-Cartophiles

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

Moral and Mental Development

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

The Ratios

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

Culture Matters

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

The Culture of Growth

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

The Entrepreneurial Society

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

The Envy of the World

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

Atoms, Bits, and Growth

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

Jerry Hausman on Wal-Mart

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

Labor Quality and the Wealth of Nations

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

The P-I-E Model

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

Growth and Development of Growth and Development

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

For Open Borders

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

Business Regulation and Economic Development

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 and Development

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

Preferring Ignorance

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

An Army of Consumers

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

Potentially Disruptive

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

Emergent Nations

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

How to Achieve Backwardness

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

Intangible Capital

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

Gnomonomics

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

Solow Paradox Revisited

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

Intangible Wealth and Institutional Economics

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

Friedman and Sowell Dialogue on Bauer

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

India Fact of the Day

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

Planning vs. Improvisation

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

Tyler Cowen's Tight Constraints

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

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

Escaping the Envy Trap

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

The Tribal Trap

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

What Took You So Long?

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

Technological Independence

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

James Miller's Challenge Bet

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

Give This Woman a Nobel Prize!

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

The Food Court Economy

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

Power of Productivity

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

Economic Growth Gauntlet

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

Underground Economy

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

Siegel for the Long Run

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

European Demographics

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

Pre-historic free trade?

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

Finance, Risk and Growth

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

Math and Economics

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

Capital vs. Institutions

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

Eastern European Economic Statistics Made Fun (Really!)

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

Computers and Productivity

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

Anglosphere Challenge

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

Flynn Effect

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

Growth and Economic Literacy

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

Nanotechnology and the Economy

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

Exuberance

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

Entrepreneurs and "giving back"

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

Nobel Prize Speculation

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

Education and Growth

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

Ideas and Growth

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

Economic Policy Analysis

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

The Success of Failure

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

Hours Worked In the U.S. vs. Europe

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

More on the Productivity Story

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

Export-led growth?

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

Moore's Law for Storage

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

From Galbraith to Spitzer

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

Lucas on Growth

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

IQ and Living Standards

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

Innovation, Business Behavior, and Education

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

Jobs, Progress, and Displacement

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

Hard America, Soft America

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

Progress and Displacement

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

"It's Their Fault"

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

Costs of Entrepreneurship

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

The European Outlook

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

Nanotechnology and the Great Race

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

Who Should Own Iraq's Oil?

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

Ethics as Infrastructure

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

Phelps on Dynamism

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

Long-term Growth Forecasts

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

Foreign Aid and Growth

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

Growth Inhibitors in Europe

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

Economics of Nanotechnology

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

Economists Too Linear?

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

Doubts about Planning

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

Economics of Reconstruction

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

Politics vs. Economics

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

Australia's Economic Miracle

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

Comment of the Week, 2003-07-02

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

Liquidity Trap or Statism Trap?

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

Three P's of Growth

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

Growth and Demographics

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

Savings, Capital Deployment, and Growth

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

Internet Bubble and Growth

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

World Population Outlook

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

The Language Barrier, II

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

Moore's Law

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

Future Technology

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

Bush Administration Embraces New Growth Theory

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

The Language Barrier

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

Japan Needs Revolution?

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

The Internet and Productivity

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

Lurching toward Utopia?

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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