Economic links
Proposing a “market test” of (pdf) Randian objectivism versus Mises subjectivism. (Paper submitted here.)
A classic example of how property rights are about protecting ordinary folk.
A really nice discussion of “GDP-fetishism”.
Continuing the blow-by-blow of the economic crisis of the 1930s.
Looking at the connection between aid and economic growth. Entrepreneurial innovation: case studies from Memphis.
The information problem in decisions: why expertise is not enough. The paper.
About financial regulation and bailout’s doomsday cycle. A striking (if not precisely dated) graph on patterns of sovereign risk (i.e. government debt default/restructuring).
Ireland is embracing austerity. While Germany has abandoned its opposition to a Greek bailout and the Eurocrats are proposing economic government be centred on them, not these crazy democratically-elected governments.
Arguing, on the matter of fiscal stimulus, that labour and capital are not like “play doh”, easily moulded into any desired pattern. Being a touch sceptical about the effects of the US stimulus package.
Arguing that China’s exchange rate policy of undervaluing its currency helps the US economy.
45 years after it was introduced, the US is still searching for an appropriate way to determine fees for Medicare.
The Laffer curve in operation: Washington DC raises the tax on cigarettes and finds that revenue falls.
Bans on trans fats as the widening cycle of regulation in operation. New York city wants to ban home-made treats at school. More on regulatory paternalism here.
Study finds that job search by the unemployed is directly connected to incentives:
across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between −1.6 and −2.2;
Big government is back:
These perverse incentives mean that governments can frequently spend lots of money without producing any improvement in public services. Britain’s government doubled spending on education between fiscal 1999 and fiscal 2007, but the spending splurge coincided with a dramatic decline in Britain’s position in the OECD’s ranking of educational performance. Bill Watkins of the University of California, Santa Barbara, calculates that, once you adjust for inflation and population growth, his state’s government spent 26% more in 2007-08 than in 1997-98. No one can argue that California’s public services are now 26% better.
Pointing out the policy continuities between Hoover and Roosevelt:
So the question is why one should even view the Roosevelt years as an example of a successful recovery process, given that it took anywhere from 6 to 15 years to get the economy back to pre-depression levels of the major macroeconomic indicators. …
… labor hours stayed flat from 1932 to 1934, then rose until 1937, dipping in 1938, before rising again. Despite that increase, he concludes that “even as late as 1940, total hours remained below the 1929 level by 6 percent, and only in 1941, with the population vigorously engaged in mobilization for war, did total hours exceed the 1929 value, by 3 percent”
About process and order:
Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will.
… Until and unless this teleological element is fully exorcised from basic economic theory, economists are likely to remain confused and their discourse confusing.
Arguing that inequality has significantly negative social consequences. Looking at causes and responses to (pdf) income inequality:
… is why such changes in the income distribution have been occurring. The best diagnosis so far comes from Goldin and Katz in their recent book The Race Between Education and Technology. Their bottom line is that “the sharp rise in inequality was largely due to an educational slowdown.”
According to Goldin and Katz, for the past century technological progress has been a
steady force not only increasing average living standards, but also increasing the demand for skilled workers relative to unskilled workers. Skilled workers are needed to apply and manage new technologies, while less skilled workers are more likely to become obsolete.
For much of the 20th century, however, skill-biased technological change was outpaced by advances in educational attainment. In other words, while technological progress increased the demand for skilled workers, our educational system increased the supply of them even faster.
As a result, skilled workers did not benefit disproportionately from economic growth.
But recently things have changed. Over the last several decades, technological advance has kept up its pace, while educational advancement has slowed down. The cohort of workers born in 1950 averaged 4.67 more years of schooling than the cohort born in 1900, representing an increase of 0.93 years of schooling in each decade. By contrast, the cohort born in 1975 had only 0.74 more years of schooling than that born in 1950, an increase of only 0.30 years per decade. That is, the pace of educational advance has fallen by 68 percent.
Because growth in the supply of skilled workers has slowed, their wages have grown
relative to those of the unskilled. This is evident in Goldin and Katz’s estimates of the financial return to education. In 1980, each year of college raised a person’s wage by 7.6 percent. In 2005, each year of college yielded an additional 12.9 percent. Over this time period, the rate of return from each year of graduate school has risen even more - from 7.3 to 14.2 percent.
Debating whether the US needs more college graduates.
Wondering how long Oz housing prices can stay up.
A classic example of how property rights are about protecting ordinary folk.
A really nice discussion of “GDP-fetishism”.
Continuing the blow-by-blow of the economic crisis of the 1930s.
Looking at the connection between aid and economic growth. Entrepreneurial innovation: case studies from Memphis.
The information problem in decisions: why expertise is not enough. The paper.
About financial regulation and bailout’s doomsday cycle. A striking (if not precisely dated) graph on patterns of sovereign risk (i.e. government debt default/restructuring).
Ireland is embracing austerity. While Germany has abandoned its opposition to a Greek bailout and the Eurocrats are proposing economic government be centred on them, not these crazy democratically-elected governments.
Arguing, on the matter of fiscal stimulus, that labour and capital are not like “play doh”, easily moulded into any desired pattern. Being a touch sceptical about the effects of the US stimulus package.
Arguing that China’s exchange rate policy of undervaluing its currency helps the US economy.
45 years after it was introduced, the US is still searching for an appropriate way to determine fees for Medicare.
The Laffer curve in operation: Washington DC raises the tax on cigarettes and finds that revenue falls.
Bans on trans fats as the widening cycle of regulation in operation. New York city wants to ban home-made treats at school. More on regulatory paternalism here.
Study finds that job search by the unemployed is directly connected to incentives:
across the 50 states and D.C., job search is inversely related to the generosity of unemployment benefits, with an elasticity between −1.6 and −2.2;
Big government is back:
These perverse incentives mean that governments can frequently spend lots of money without producing any improvement in public services. Britain’s government doubled spending on education between fiscal 1999 and fiscal 2007, but the spending splurge coincided with a dramatic decline in Britain’s position in the OECD’s ranking of educational performance. Bill Watkins of the University of California, Santa Barbara, calculates that, once you adjust for inflation and population growth, his state’s government spent 26% more in 2007-08 than in 1997-98. No one can argue that California’s public services are now 26% better.
Pointing out the policy continuities between Hoover and Roosevelt:
So the question is why one should even view the Roosevelt years as an example of a successful recovery process, given that it took anywhere from 6 to 15 years to get the economy back to pre-depression levels of the major macroeconomic indicators. …
… labor hours stayed flat from 1932 to 1934, then rose until 1937, dipping in 1938, before rising again. Despite that increase, he concludes that “even as late as 1940, total hours remained below the 1929 level by 6 percent, and only in 1941, with the population vigorously engaged in mobilization for war, did total hours exceed the 1929 value, by 3 percent”
About process and order:
Individuals do not act so as to maximize utilities described in independently existing functions. They confront genuine choices, and the sequence of decisions taken may be conceptualized, ex post (after the choices), in terms of "as if" functions that are maximized. But these "as if" functions are, themselves, generated in the choosing process, not separately from such process. If viewed in this perspective, there is no means by which even the most idealized omniscient designer could duplicate the results of voluntary interchange. The potential participants do not know until they enter the process what their own choices will be. From this it follows that it is logically impossible for an omniscient designer to know, unless, of course, we are to preclude individual freedom of will.
… Until and unless this teleological element is fully exorcised from basic economic theory, economists are likely to remain confused and their discourse confusing.
Arguing that inequality has significantly negative social consequences. Looking at causes and responses to (pdf) income inequality:
… is why such changes in the income distribution have been occurring. The best diagnosis so far comes from Goldin and Katz in their recent book The Race Between Education and Technology. Their bottom line is that “the sharp rise in inequality was largely due to an educational slowdown.”
According to Goldin and Katz, for the past century technological progress has been a
steady force not only increasing average living standards, but also increasing the demand for skilled workers relative to unskilled workers. Skilled workers are needed to apply and manage new technologies, while less skilled workers are more likely to become obsolete.
For much of the 20th century, however, skill-biased technological change was outpaced by advances in educational attainment. In other words, while technological progress increased the demand for skilled workers, our educational system increased the supply of them even faster.
As a result, skilled workers did not benefit disproportionately from economic growth.
But recently things have changed. Over the last several decades, technological advance has kept up its pace, while educational advancement has slowed down. The cohort of workers born in 1950 averaged 4.67 more years of schooling than the cohort born in 1900, representing an increase of 0.93 years of schooling in each decade. By contrast, the cohort born in 1975 had only 0.74 more years of schooling than that born in 1950, an increase of only 0.30 years per decade. That is, the pace of educational advance has fallen by 68 percent.
Because growth in the supply of skilled workers has slowed, their wages have grown
relative to those of the unskilled. This is evident in Goldin and Katz’s estimates of the financial return to education. In 1980, each year of college raised a person’s wage by 7.6 percent. In 2005, each year of college yielded an additional 12.9 percent. Over this time period, the rate of return from each year of graduate school has risen even more - from 7.3 to 14.2 percent.
Debating whether the US needs more college graduates.
Wondering how long Oz housing prices can stay up.