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  • Bob Murphy on EMH

    (November 28, 2009 12:02 PM, by David Henderson) Ever since I was an assistant professor at the University of Rochester's B-school (now called the Simon School) in the late 1970s, I have believed in the Efficient Markets Hypothesis. The basic idea is that market prices reflect all available... [...]
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    Posted: November 28, 2009, 7:02am EST
    by David Henderson

  • When Is Uncertainty an Argument for Inaction?

    (November 28, 2009 12:00 AM, by Bryan Caplan) From a naive point of view, uncertainty clearly tips the scales against costly action.  If you're only 50% sure that your transmission if broken, for example, you have less reason to replace it than if you are 100% sure that it's... [...]
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    Posted: November 27, 2009, 7:00pm EST
    by Bryan Caplan

  • How the Economy of Anarchist Spain Really Worked

    (November 27, 2009 12:00 AM, by Bryan Caplan) Last week, I received a Polish translation of a long essay I wrote over a decade ago on Spanish anarchism.  During the Spanish Civil War (1936-9), an avowedly anarcho-socialist movement called the CNT won control over large parts of Spain. ... [...]
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    Posted: November 26, 2009, 7:00pm EST
    by Bryan Caplan

  • Snap Judgments vs. Apathy

    (November 26, 2009 08:24 PM, by Bryan Caplan) I say it's silly for parents to worry much about other parents' opinions of them.  They're probably too tired and distracted to pay any attention to you, anyway.  Robin demurs:Bryan presumes we care less about the judgments others make when... [...]
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    Posted: November 26, 2009, 3:24pm EST
    by Bryan Caplan

  • Accountability and the Web

    (November 26, 2009 01:35 PM, by David Henderson) Musician Dave Carroll recently posted a video on YouTube after United Airlines refused to take responsibility for one of its employees' having wrecked his Taylor guitar. In his last conversation with the United Airlines Customer Relations Manager, Carroll said he...' [...]
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    Posted: November 26, 2009, 8:35am EST
    by David Henderson

  • Book 1, Book 2

    (November 26, 2009 08:57 AM, by Arnold Kling) Tyler Cowen recently said, if everyone read the book and was persuaded by it, would anything change for the better? An author should aim to write a book which matters. My latest book, Unchecked and Unbalanced is out. We might... [...]
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    Posted: November 26, 2009, 3:57am EST
    by Arnold Kling

  • The Great Depression as a Recalculation

    (November 26, 2009 08:25 AM, by Arnold Kling) In an interview, Bruce Greenwald says, Basically, in the Depression a huge sector of the economy that everyone had always regarded as central, died. And it dies for an almost virtuous reason. That sector of course is agriculture. Because productivity... [...]
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    Posted: November 26, 2009, 3:25am EST
    by Arnold Kling

  • Where Health Care Reform Stands

    (November 24, 2009 04:16 PM, by Arnold Kling) Ronald Brownstein writes To save costs, Democrats mostly want to change the incentives for providers. Republicans mostly want to change the incentives for patients by shifting toward a model where insurance covers only catastrophic expenses and people pay for more... [...]
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    Posted: November 24, 2009, 11:16am EST
    by Arnold Kling

  • SuperFreakonomics, III

    (November 24, 2009 01:56 PM, by David Henderson) This is my third post (see the first two here and here) on Levitt and Dubner's SuperFreakonomics. Chapter 3 is one of my favorite chapters in the book, for one main reason: the way it deals with the Kitty Genovese... [...]
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    Posted: November 24, 2009, 8:56am EST
    by David Henderson

  • Congressional Millionaires

    (November 24, 2009 01:16 PM, by Bryan Caplan) Factoids of the day: 1.  54% of Congressmen are millionaires.  2. Consistent with the "limosine liberals" stereotype, eight out of the ten richest are Democrats.I wonder how much of this can be explained by the vast overrepresentation of lawyers in... [...]
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    Posted: November 24, 2009, 8:16am EST
    by Bryan Caplan

  • Be a Koch Fellow

    (November 24, 2009 01:06 PM, by Bryan Caplan) The Charles G. Koch Charitable Foundation is still taking applications for spring Internships in D.C.  The deadline: December 4th.  If you're a student who'd like to get paid to talk about the kinds of things you read on econ blogs,... [...]
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    Posted: November 24, 2009, 8:06am EST
    by Bryan Caplan

  • What I've Been Reading

    (November 24, 2009 12:52 PM, by Arnold Kling) In order of satisfaction: 1. Empire of Liberty,by Gordon Wood 2. The Great Transformation, by Karl Polanyi 3. Masters and Commanders, by Andrew Roberts 4. Startup Nation, by Dan Senor and Saul Singer Wood is giving us the history of... [...]
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    Posted: November 24, 2009, 7:52am EST
    by Arnold Kling

  • Price Discrimination Explains Everything

    (November 24, 2009 10:15 AM, by Arnold Kling) In my high school economics class, my students asked me to explain why there are sales on "Black Friday." The class period was over, so I only had time to blurt out "price discrimination" without getting into an explanation of... [...]
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    Posted: November 24, 2009, 5:15am EST
    by Arnold Kling

  • Hummel's Three Laws and WWII Revisionism: Part 1

    (November 23, 2009 12:25 AM, by Bryan Caplan) I recently listened to an old lecture (c.1979) that economist and historian Jeff Hummel put on his webpage.  It's a one-hour intro to World War II revisionism.  While I'm sympathetic to the conclusion that U.S. participation in WWII actually made...' [...]
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    Posted: November 22, 2009, 7:25pm EST
    by Bryan Caplan

  • Macro and the Organizational Capital Model

    (November 22, 2009 06:13 PM, by Arnold Kling) Robert Shiller writes, Consider this possibility: after all these months, people start to think it's time for the recession to end. The very thought begins to renew confidence, and some people start spending again -- in turn, generating visible signs... [...]
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    Posted: November 22, 2009, 1:13pm EST
    by Arnold Kling

  • The Right Minimum Wage Question

    (November 22, 2009 01:52 PM, by David Henderson) Like Bryan, I received the same request from the same friend: what question(s) would I want to put on a survey of economists. My response was that I would want the question on the minimum wage asked accurately instead of... [...]
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    Posted: November 22, 2009, 8:52am EST
    by David Henderson

  • Styles of Thought in Economics

    (November 22, 2009 01:35 PM, by Arnold Kling) Seth Roberts interviews Tyler Cowen, who says, I am very interested in the topic of "styles of thought in economics." Robert Solow, my thesis adviser, was a big fan of starting with simple numerical examples. The point is that you... [...]
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    Posted: November 22, 2009, 8:35am EST
    by Arnold Kling

  • A Good Line

    (November 22, 2009 01:30 PM, by Arnold Kling) From Jeff Jacoby Those immigrants didn't come here in order to be lawbreakers; they broke a law in order to come here. If you had a store that was the only place people could go to buy bread, and people...' [...]
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    Posted: November 22, 2009, 8:30am EST
    by Arnold Kling

  • From Intuitionism to Contrarianism: A Case Study

    (November 22, 2009 12:00 AM, by Bryan Caplan) As an undergraduate, I spent hundreds of hours pondering the foundations of morality, also known as "meta-ethics."  In the end, the young Michael Huemer converted me to ethical intuitionism, a view I've held ever since.  (BTW, a decade or so...' [...]
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    Posted: November 21, 2009, 7:00pm EST
    by Bryan Caplan

  • From Poverty to Prosperity Watch

    (November 21, 2009 08:32 PM, by Arnold Kling) Ben Casnocha is the first to write a review. An excerpt: This is a book for people interested in economics first, entrepreneurship second, and globalization third. It's a book for people looking for contemporary insight on the ideas of people... [...]
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    Posted: November 21, 2009, 3:32pm EST
    by Arnold Kling

  • Axel Leijonhufvud, Recalculation Theorist

    (November 21, 2009 08:24 PM, by Arnold Kling) What I call the Recalculation Story has many origins. One of them is Axel Leijonhufvud. He recently wrote, The economy is an adaptive dynamical system. It possesses the self-regulating, "equilibrating" properties that we usually refer to as "market mechanisms". But... [...]
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    Posted: November 21, 2009, 3:24pm EST
    by Arnold Kling

  • A Turning Point?

    (November 21, 2009 07:40 PM, by Arnold Kling) Those of us who are opposed to the concentration of power in the hands of technocrats have had much to be depressed about over the past year. However, sometimes fortunes change. I wonder if this past week will come to... [...]
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    Posted: November 21, 2009, 2:40pm EST
    by Arnold Kling

  • Are Markets Efficient? Krugman vs. Kling

    (November 20, 2009 04:38 PM, by Arnold Kling) He says they are: Now, you could and should be worried if this thing looked like a great bubble -- if long-term rates looked unreasonably low given the fundamentals. But do they? Long rates fluctuated between 4.5 and 5 percent... [...]
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    Posted: November 20, 2009, 11:38am EST
    by Arnold Kling

  • Me on Market Wrap

    (November 20, 2009 02:25 PM, by David Henderson) I just completed an interview with Moe Ansari of Market Wrap. We talked about the current recession, the health care bill, and various other things. If you want to listen (I think you'll hear an edited version but they might...' [...]
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    Posted: November 20, 2009, 9:25am EST
    by David Henderson

  • From Poverty to Prosperity Watch

    (November 20, 2009 08:59 AM, by 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... [...]
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    Posted: November 20, 2009, 3:59am EST
    by Arnold Kling

  • Dominating the Narrative

    (November 20, 2009 08:57 AM, by Arnold Kling) Will Wilkinson writes, Ygesias says, "I believe that absent the [TARP] bailout, we'd be looking at even higher unemployment today." I think this is a plausible claim. But I don't know of a satisfactory way to evaluate it. It's plausible... [...]
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    Posted: November 20, 2009, 3:57am EST
    by Arnold Kling

  • Haunted By the Hitler Hypothetical

    (November 20, 2009 12:13 AM, by Bryan Caplan) When you play with fire, you get burned.  And when you philosophize with hypotheticals involving Nazis, you get misrepresented.  In the Caplan-Hanson debate, I began:Let me begin with a disclaimer: Despite his moral views, Robin is an incredibly nice, decent... [...]
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    Posted: November 19, 2009, 7:13pm EST
    by Bryan Caplan

  • Are American Doctors Overpaid?

    (November 19, 2009 09:15 PM, by Arnold Kling) Sherry Glied, Ashwin Prabhu, and Norman Edelman do not think so. The value of physicians' underlying human capital is estimated by forecasting an age-earnings profile for doctors based on the characteristics in youth of NLSY cohort participants who subsequently became...' [...]
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    Posted: November 19, 2009, 4:15pm EST
    by Arnold Kling

  • The Government/Slavery Analogy

    (November 19, 2009 07:23 PM, by Arnold Kling) Reacting to my recent post on the analogy Robert Higgs drew between libertarianism and abolitionism, a commenter wrote, Hans Hoppe, hardcore libertarian, once described what may be the crucial difference between a democratic state and slavery: the latter was private... [...]
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    Posted: November 19, 2009, 2:23pm EST
    by Arnold Kling

  • From Poverty to Prosperity Watch

    (November 19, 2009 02:43 PM, by Arnold Kling) The Kauffman Foundation conducted a survey of entrepreneurs. The findings can be inferred from the table of contents. Experience, Management, and Luck: The Keys to Success Professional Networks, Education, Funding, Personal Networks: Important Location, Investor Advice, Alumni Networks, and Regional... [...]
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    Posted: November 19, 2009, 9:43am EST
    by Arnold Kling

  • My Responses to Readers Questions

    (November 19, 2009 11:25 AM, by Arnold Kling) In response to Bryan's post, readers posed some interesting questions to ask in a survey of members of the American Economic Association. Is there any reason besides a desire to learn, or to make entry into a Ph.D. programme easier... [...]
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    Posted: November 19, 2009, 6:25am EST
    by Arnold Kling

  • Morning Commentary

    (November 19, 2009 08:52 AM, by Arnold Kling) Paul DeGrauwe writes, My contention is that the rational expectations models are the intellectual heirs of these central planning models. Not in the sense that individuals in these rational expectations models aim at planning the whole, but in the sense... [...]
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    Posted: November 19, 2009, 3:52am EST
    by Arnold Kling

  • Since You Asked, Scott

    (November 19, 2009 12:13 AM, by Bryan Caplan) How can any economist - even Krugman - advocate job subsidies and work sharing?  Krugman's answer is that it's a "third-best" solution.  His top three:1. Sumnerian monetary policy.  Seriously, but without the hat tip.2. More fiscal stimulus.3. Job subsidies and... [...]
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    Posted: November 18, 2009, 7:13pm EST
    by Bryan Caplan

  • Ask and You May Learn

    (November 18, 2009 03:07 PM, by Bryan Caplan) An economist I know just emailed me:I anticipate participating in a survey project of a sample of AEA members. Such a survey is an opportunity for throwing in extraneous questions of interest. Can you think of question or two you... [...]
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    Posted: November 18, 2009, 10:07am EST
    by Bryan Caplan

  • My New Public Choice Class

    (November 18, 2009 03:05 PM, by Bryan Caplan) The webpage for my spring, 2010 Graduate Public Choice II course is now up, including the syllabus, complete lecture notes, and homeworks.  About half of the material is from my Graduate Public Finance I course; the rest is new.  Highlights... [...]
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    Posted: November 18, 2009, 10:05am EST
    by Bryan Caplan

  • Unchecked and Unbalanced Watch

    (November 18, 2009 01:46 PM, by Arnold Kling) Robert Higgs writes, Slavery existed for thousands of years, in all sorts of societies and all parts of the world. To imagine human social life without it required an extraordinary effort. Yet, from time to time, eccentrics emerged to oppose... [...]
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    Posted: November 18, 2009, 8:46am EST
    by Arnold Kling

  • International Trade Economists are Bayesians

    (November 18, 2009 01:41 PM, by David Henderson) In Bryan's excellent recent post on why most economists aren't Bayesians, he writes that the position of economic theorists is: If no one has proven that Comparative Advantage still holds with imperfect competition, transportation costs, and indivisibilities, only an ignoramus...' [...]
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    Posted: November 18, 2009, 8:41am EST
    by David Henderson

  • From Poverty to Prosperity Watch

    (November 18, 2009 12:27 PM, by 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... [...]
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    Posted: November 18, 2009, 7:27am EST
    by Arnold Kling

  • The Financial Regulatory Chess Game

    (November 18, 2009 10:46 AM, by Arnold Kling) Edward J. Kane writes, Regulation is best understood as a dynamic game of action and response, in which either regulators or regulatees may make a move at any time. In this game, regulatees tend to make more moves than regulators... [...]
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    Posted: November 18, 2009, 5:46am EST
    by Arnold Kling

  • The Effect of Children on Happiness: The Latest from the Research Frontier

    (November 18, 2009 12:14 AM, by Bryan Caplan) Hasty readers of happiness research often conclude that kids are a disaster for happiness.  If you actually look at the size as well as the sign of standard estimates, however, the right conclusion is that kids ever-so-slightly reduce happiness.  I... [...]
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    Posted: November 17, 2009, 7:14pm EST
    by Bryan Caplan

  • Repealing the Laws of Supply and Demand

    (November 17, 2009 08:09 PM, by Arnold Kling) Megan McArdle writes, When you increase the demand for something without increasing the supply, you either get price increases, or shortages. Neither is what the authors are promising for their bills. She is referring, of course, to health care legislation,... [...]
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    Posted: November 17, 2009, 3:09pm EST
    by Arnold Kling

  • The Economics of Electric Cars

    (November 17, 2009 09:36 AM, by Arnold Kling) I have begun reading Startup Nation, a book about Israeli entrepreneurialism. Unfortunately, the first anecdote is about an attempt, requiring huge capital commitments and considerable government intervention, to create an infrastructure for electric cars. The idea is to build a... [...]
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    Posted: November 17, 2009, 4:36am EST
    by Arnold Kling

  • My Alternative Health Care Bill

    (November 17, 2009 08:53 AM, by Arnold Kling) Tyler Cowen offers his, which strikes me as overly complicated. The bill I would propose would be one that encourages experimentation at the state level. Offer to support an experiment that allows an individual state to adopt single-payer, while allowing... [...]
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    Posted: November 17, 2009, 3:53am EST
    by Arnold Kling

  • What If India Had Been an Asian Tiger?

    (November 17, 2009 12:22 AM, by Bryan Caplan) For decades after World War II, India was a Soviet-wannabe state.  While their ruling parties lacked the brutality to fully nationalize their economy, post-war India was an early version of "socialism with a human face."  Well, except for massive ethnic... [...]
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    Posted: November 16, 2009, 7:22pm EST
    by Bryan Caplan

  • No Bubbles Here. Move Along Now

    (November 16, 2009 09:33 PM, by Arnold Kling) WSJ Real Time Economics reports on a speech by the Fed's Don Kohn, Our abilities to discern the 'correct' values of assets is quite limited. At present, however, the prices of assets in U.S. financial markets do not appear to... [...]
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    Posted: November 16, 2009, 4:33pm EST
    by Arnold Kling

  • A Minsky Recovery?

    (November 16, 2009 12:34 PM, by Arnold Kling) As always, there are conflicting views on the economic outlook. Daniel Gross is optimistic. In the third quarter, productivity--econospeak for companies doing more work with the same amount of labor--rose at a 9.5 percent annual rate... But just as hamsters... [...]
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    Posted: November 16, 2009, 7:34am EST
    by Arnold Kling

  • An Apology

    (November 16, 2009 09:35 AM, by David Henderson) In my post yesterday, which I wrote in haste--generally a bad idea--I called former President Bush "a joke." I was expressing my frustration at his willingness to talk a good game but not to play a good game. But we... [...]
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    Posted: November 16, 2009, 4:35am EST
    by David Henderson

  • Why Academic Economists Aren't Bayesians

    (November 16, 2009 12:10 AM, by Bryan Caplan) I don't think I'll find a better answer than Robin's:[T]he main social function of academia is to let students, patrons, readers, etc. affiliate with credentialed-as-impressive minds.  If so, academic beliefs are secondary - the important thing is to clearly show...' [...]
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    Posted: November 15, 2009, 7:10pm EST
    by Bryan Caplan

  • What Is Money Velocity?

    (November 16, 2009 12:00 AM, by Bryan Caplan) A key feature of the financial crisis was a massive fall in the velocity of money.  But what exactly is "money velocity"?  By definition, V=PY/M.  In English: Velocity=Nominal Income divided by the Money Supply.  When asked for some intuition, economists... [...]
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    Posted: November 15, 2009, 7:00pm EST
    by Bryan Caplan

  • Bush Admits His Errors

    (November 15, 2009 02:55 PM, by David Henderson) In a speech last week, former President George W. Bush admitted that he had erred in imposing new layers of regulation on the U.S. economy. Here's the news story: Former President George W. Bush, outlining plans for a new public... [...]
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    Posted: November 15, 2009, 9:55am EST
    by David Henderson

  • So You Want to Do Good

    (November 15, 2009 07:31 AM, by 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... [...]
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    Posted: November 15, 2009, 2:31am EST
    by Arnold Kling

  • Why Aren't Academic Economists Bayesians?

    (November 15, 2009 12:43 AM, by Bryan Caplan) Almost all economic models assume that human beings are Bayesians: They start with some prior beliefs about how the world works, and update those beliefs using Bayes' Theorem as new information arrives.  Behavioral economists often question whether people are in...' [...]
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    Posted: November 14, 2009, 7:43pm EST
    by Bryan Caplan

  • An Insider and and Outsider

    (November 14, 2009 05:31 PM, by Arnold Kling) The alternate universes inhabited by insiders and outsiders are evident in two links from Mark Thoma. First, Bill Dudley gives us the insider view. Liquidity risk will never be eliminated, nor should it. The preferences of borrowers to borrow long... [...]
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    Posted: November 14, 2009, 12:31pm EST
    by Arnold Kling

  • FDA May Decide to Raise Transactions Costs

    (November 14, 2009 04:26 PM, by David Henderson) That's not the headline, of course. The headline in the New York Times is, "F.D.A. Says It May Ban Alcoholic Drinks With Caffeine." When I read it, I thought, "Oh, no. The FDA is about to ban rum and coke."... [...]
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    Posted: November 14, 2009, 11:26am EST
    by David Henderson

  • Did Oil Price Increases Contribute Much to Stagflation?

    (November 13, 2009 02:57 PM, by David Henderson) Mankiw's Text Hints at Yes, But The Answer is No One of the standard claims made about the 1970s is that a major contributor to inflation and low growth was OPEC. In his excellent textbook, Macroeconomics, 6th ed., for example,... [...]
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    Posted: November 13, 2009, 9:57am EST
    by David Henderson

  • Unchecked and Unbalanced Watch

    (November 13, 2009 11:44 AM, by Arnold Kling) Michael Strong talks about special economic zones as a way of creating competition in governance. The idea seems similar to Paul Romer's concept of charter cities. Strong is optimistic that the state will "wither away" (as Marx would put it)... [...]
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    Posted: November 13, 2009, 6:44am EST
    by Arnold Kling

  • Cap Creditors' Bailouts?

    (November 13, 2009 09:35 AM, by Arnold Kling) Russ Roberts tucks an interesting suggestion into his diatribe against the arrogance of financial regulators. A ceiling of 50 cents on the dollar for creditors and lenders when the institutions they fund become insolvent is a natural place to start... [...]
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    Posted: November 13, 2009, 4:35am EST
    by Arnold Kling

  • Marginal Tax Rates, Again

    (November 13, 2009 07:56 AM, by Arnold Kling) A reader recommends a paper by Laurence J. Kotlikoff and David Rapson. The reader views this paper as contradicting the article I linked to earlier. Kotlikoff and Rapson report marginal tax rates of closer to 40 percent than 100 percent... [...]
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    Posted: November 13, 2009, 2:56am EST
    by Arnold Kling

  • The Faces of Janus

    (November 13, 2009 12:29 AM, by Bryan Caplan) While preparing my promotion packet, I came across my old review of A. James Gregor's outstanding The Faces of Janus: Marxism and Fascism in the Twentieth Century.  Highlights: Gregor provides an elegant and thoughtful history of what one might uncharitably... [...]
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    Posted: November 12, 2009, 7:29pm EST
    by Bryan Caplan

  • Bequest Question

    (November 12, 2009 02:02 PM, by Bryan Caplan) According to "mistake" theories of inheritance, people leave bequests because they don't have enough information to spend all their assets before they die.Question: In a world with annuities and negative mortgages, how can anyone continue to believe this story?...' [...]
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    Posted: November 12, 2009, 9:02am EST
    by Bryan Caplan

  • The Signaling Model of Education Standing on One Foot

    (November 12, 2009 01:30 PM, by Bryan Caplan) Look at what people learn in the classroom.  Look at what people do on the job.  How much of a connection do you see?... [...]
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    Posted: November 12, 2009, 8:30am EST
    by Bryan Caplan

  • Health Care: Let the Games Begin

    (November 12, 2009 11:59 AM, by Arnold Kling) Gene Steuerle writes, Here is the bottom line on how employers and employees together can maximize what they get from government. Many employers who don't provide insurance today will probably just choose to pay the tax ($400-per-employee under one scenario...' [...]
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    Posted: November 12, 2009, 6:59am EST
    by Arnold Kling

  • Lessons from Banking History

    (November 12, 2009 10:40 AM, by Arnold Kling) Piergiorgio Alessandri and Andrew G. Haldane write, Historically, the link between the state and the banking system has been umbilical. Starting with the first Italian banking houses in the 13th century, banks were financiers of the sovereign. Sovereign need was... [...]
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    Posted: November 12, 2009, 5:40am EST
    by Arnold Kling

  • Book Update: Available for Order

    (November 12, 2009 09:52 AM, by 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... [...]
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    Posted: November 12, 2009, 4:52am EST
    by Arnold Kling

  • A Proposal to Save Jobs

    (November 11, 2009 06:28 PM, by Arnold Kling) A Wall Street Journal blog writes State and local governments in the U.S. may be forced to cut 900,000 jobs next year without additional help from the federal government, according to a report released by a prominent liberal think tank... [...]
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    Posted: November 11, 2009, 1:28pm EST
    by Arnold Kling

  • The Great War

    (November 11, 2009 03:21 PM, by Arnold Kling) John Quiggin writes, The names of Asquith, Bethmann-Hollweg, Berchtold and Poincare are barely remembered, yet on any reasonable accounting they belong among the great criminals of history. Not only did they create the conditions for war, and rush (eagerly in... [...]
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    Posted: November 11, 2009, 10:21am EST
    by Arnold Kling

  • Marginal Tax Rates

    (November 11, 2009 11:30 AM, by Arnold Kling) Clifford F. Thies writes, When you take into account the loss of means-tested benefits (e.g., cash assistance, food stamps, housing subsidies, and health insurance), and the taxes that people pay on earned income, the return to working is essentially zero... [...]
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    Posted: November 11, 2009, 6:30am EST
    by Arnold Kling

  • Maine's Pelosi/Baucus Care

    (November 11, 2009 11:05 AM, by David Henderson) An excellent news story in today's New York Times highlights the problems with government regulation of health insurance in Maine, problems that, the reporter notes, would likely occur if the U.S. Senate's and the U.S. House of Representatives' versions of...' [...]
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    Posted: November 11, 2009, 6:05am EST
    by David Henderson

  • Explaining the Direction of Health Care Refrom

    (November 11, 2009 10:45 AM, by Arnold Kling) The most important political fact affecting health care reform is the sizable Democratic majority. There are too many Democrats in the House and Senate for a bipartisan bill to make sense. Given that we are going to have a partisan... [...]
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    Posted: November 11, 2009, 5:45am EST
    by Arnold Kling

  • Unchecked and Unbalanced Watch

    (November 11, 2009 08:29 AM, by Arnold Kling) John Kay writes, Control of rent-seeking requires decentralisation of economic power. These policies involve limits on the economic role of the state; constraints on the concentration of economic power in large business; constant vigilance at the boundaries between government and... [...]
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    Posted: November 11, 2009, 3:29am EST
    by Arnold Kling

  • Exposure Therapy: When Probabilities Fail

    (November 11, 2009 01:19 AM, by Bryan Caplan) In chapter 4 of Selfish Reasons to Have More Kids, I show that - objectively speaking - kids today are safer than ever.  And I'm far from the first social scientist to point out the public's systematically biased beliefs about...' [...]
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    Posted: November 10, 2009, 8:19pm EST
    by Bryan Caplan

  • Read it and Weep

    (November 10, 2009 08:25 PM, by Arnold Kling) Various pundits offer suggestions for controlling health care costs, hosted by the New York Times. My proposal (health care vouchers) has zero chance of being enacted. You may not like it, anyway. The other pundits' proposals, even if they were...' [...]
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    Posted: November 10, 2009, 3:25pm EST
    by Arnold Kling

  • How Singapore's #1

    (November 10, 2009 03:58 PM, by Bryan Caplan) A new international Gallup survey on migration preferences finds that the U.S. is the most popular dream destination.  Singapore, however, is #1 on the Potential Net Migration Index, which adjusts for population:The Potential Net Migration Index is the estimated number... [...]
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    Posted: November 10, 2009, 10:58am EST
    by Bryan Caplan

  • Should College Attendance be Subsidized?

    (November 10, 2009 11:31 AM, by Arnold Kling) Guess who said : Going to college is a lot like standing up at a concert to see better. Selfishly speaking, it works, but from a social point of view, we shouldn't encourage it. Answer here....' [...]
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    Posted: November 10, 2009, 6:31am EST
    by Arnold Kling

  • Israel's Nasty Minimum Wage

    (November 9, 2009 10:48 PM, by David Henderson) The government is considering establishing work camps in the south of the country, where illegal migrant workers will receive shelter, food and medical care, Army Radio reported Wednesday. In exchange, illegal migrants would perform manual labor outside the camps, but... [...]
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    Posted: November 09, 2009, 5:48pm EST
    by David Henderson

  • The Writing on the Wall

    (November 9, 2009 08:19 PM, by Bryan Caplan) I've been thinking all day about what to write for the 20th anniversary of the fall of the Berlin Wall.  Here goes.The conventional interpretation of the Wall: Socialism, a movement that began with wide-eyed idealism, was gradually corrupted.  The first...' [...]
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    Posted: November 09, 2009, 3:19pm EST
    by Bryan Caplan

  • From Poverty to Prosperity Watch

    (November 9, 2009 06:23 PM, by Arnold Kling) Innovation and entrepreneurship are amazingly good things...and predatory government and corruption are amazingly bad things. That is our new book (the one that Amazon doesn't want you to read) standing on one foot. From this podcast, where I am...' [...]
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    Posted: November 09, 2009, 1:23pm EST
    by Arnold Kling

  • Mises in the Wall Street Journal

    (November 9, 2009 12:27 PM, by David Henderson) Mark Spitznagel has a piece in the Wall Street Journal on Ludwig von Mises' classic book, The Theory of Money and Credit. It's good that Spitznagel is calling our attention to this classic, which is still worth reading. But he...' [...]
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    Posted: November 09, 2009, 7:27am EST
    by David Henderson

  • More Scott Sumner

    (November 9, 2009 09:50 AM, by Arnold Kling) He writes, I think that one thing that separates me from other macroeconomists is that I see short run changes in NGDP as being powerfully impacted by changes in future expected NGDP. Thus if the expected level of NGDP one,... [...]
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    Posted: November 09, 2009, 4:50am EST
    by Arnold Kling

  • Getting Your Storks in a Row

    (November 9, 2009 01:05 AM, by Bryan Caplan) Last week I read all the major research on the response of fertility to economic incentives.  There are actually two distinct literatures.  The first focuses on the effect of intentional "birth subsidies" on child-bearing.  The second focuses on the unintentional... [...]
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    Posted: November 08, 2009, 8:05pm EST
    by Bryan Caplan

  • Stiglitz and Orszags on Fannie Mae

    (November 8, 2009 01:23 PM, by David Henderson) The paper concludes that the probability of default by the GSEs is extremely small. Given this, the expected monetary costs of exposure to GSE insolvency are relatively small -- even given very large levels of outstanding GSE debt and even... [...]
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    Posted: November 08, 2009, 8:23am EST
    by David Henderson

  • Paul Collier on Democracy

    (November 8, 2009 08:56 AM, by Arnold Kling) He writes, What incumbents fear most is not losing an election, but being overthrown by their own military. When the international community can protect a government from such a threat, it should do so, conditional upon the election being properly... [...]
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    Posted: November 08, 2009, 3:56am EST
    by Arnold Kling

  • Macroeconomic Disconnects

    (November 8, 2009 07:53 AM, by Arnold Kling) Scott Sumner brings up some difficulties for anyone who would argue that monetary policy is not a sufficient tool for fighting the recession. He is not arguing from his yet-to-be-articulated new paradigm. He is stating traditional macro.... [...]
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    Posted: November 08, 2009, 2:53am EST
    by Arnold Kling

  • Steinbrenner U.

    (November 7, 2009 06:48 PM, by Arnold Kling) Inside Higher Ed reports, A small number of colleges have become much more competitive over recent decades, according to Caroline M. Hoxby, an economist at Stanford University. But her study -- published by the National Bureau of Economic Research --... [...]
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    Posted: November 07, 2009, 1:48pm EST
    by Arnold Kling

  • A Child Understands the Fall of the Wall

    (November 7, 2009 01:50 PM, by David Henderson) As Bryan has mentioned, Monday, November 9 will be the 20th anniversary of the fall of the Berlin Wall. In Chapter 3 of my book, The Joy of Freedom: An Economist's Odyssey, I tell that story and integrate it with... [...]
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    Posted: November 07, 2009, 8:50am EST
    by David Henderson

  • (November 7, 2009 11:54 AM, by Arnold ...

    (November 7, 2009 11:54 AM, by Arnold Kling) If all goes well this link will take you to an article (with cool charts!) where I make an empirical case for telling the Recalculation story rather than pretending that we have the same economy that existed in the 1930's...' [...]
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    Posted: November 07, 2009, 6:54am EST
    by Arnold Kling

  • Charting Structural Economic Change

    (November 7, 2009 11:54 AM, by Arnold Kling) If all goes well this link will take you to an article (with cool charts!) where I make an empirical case for telling the Recalculation story rather than pretending that we have the same economy that existed in the 1930's...' [...]
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    Posted: November 07, 2009, 6:54am EST
    by Arnold Kling

  • Book Update

    (November 6, 2009 04:47 PM, by Arnold Kling) It looks like I will have two books come out in the same month. The first one will be out in two weeks, but you cannot pre-order it on Amazon. The second one will be out in three weeks, and... [...]
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    Posted: November 06, 2009, 11:47am EST
    by Arnold Kling

  • Hitting a Nerve in Singapore

    (November 6, 2009 01:34 PM, by Bryan Caplan) After Singapore's Law Minister used my article in Ethos to rebut international criticism, Singapore's Online Citizen asked permission to run a longer version of "Two Paradoxes of Singaporean Political Economy."  Reactions were... mixed.  Several readers backed me up:I would say... [...]
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    Posted: November 06, 2009, 8:34am EST
    by Bryan Caplan

  • Arnold Kling on Money

    (November 6, 2009 12:45 PM, by David Henderson) In his post today on money, Arnold writes: However, as you know, I prefer to think of money as designed top down, to serve the needs of government. But shouldn't what you "prefer to think" count for literally zero? What...' [...]
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    Posted: November 06, 2009, 7:45am EST
    by David Henderson

  • Money--Designed or Emergent?

    (November 6, 2009 10:21 AM, by Arnold Kling) George Selgin writes, Economists generally take for granted, if only tacitly, a teleological view of money's historical development, according to which it first takes the "primitive" form of mundane commodities such as cowrie shells and cacao seeds, and then advances... [...]
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    Posted: November 06, 2009, 5:21am EST
    by Arnold Kling

  • Two Links

    (November 6, 2009 08:47 AM, by Arnold Kling) Both feature Tyler Cowen. Here (or perhaps you should start here), he talks about stories. It is classic Tyler, playing cat and mouse games with your head. Basically, he is saying that stories have an advantage in that they serve... [...]
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    Posted: November 06, 2009, 3:47am EST
    by Arnold Kling

  • Wisdom Worth Repeating

    (November 5, 2009 11:14 PM, by Arnold Kling) Tyler Cowen repeats a tweet, and I will too. It comes from Masonomist Garett Jones. Workers mostly build organizational capital, not final output. This explains high productivity per 'worker' during recessions. This is yet another difference between the labor force... [...]
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    Posted: November 05, 2009, 6:14pm EST
    by Arnold Kling

  • Government Protects People from Preying Contractors

    (November 5, 2009 05:53 PM, by David Henderson) The Broward Sherriff's Office is engaging in entrapment operations to catch unlicensed contractors. On this tape, at about the minus 1:45 point, Detective Daniel Belyeu explains that right now many people are desperate for work. His solution? Make them more... [...]
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    Posted: November 05, 2009, 12:53pm EST
    by David Henderson

  • Law and Order's Economics

    (November 5, 2009 04:24 PM, by David Henderson) My student, Mike Williams, sent me the following last night: I don't know if you watch Law and Order Special Victims Unit but they had a rather frustrating take on the pharmacutical companies tonight. In the episode one of their...' [...]
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    Posted: November 05, 2009, 11:24am EST
    by David Henderson

  • Libertarians' Favorite Commie Quote

    (November 5, 2009 10:28 AM, by Bryan Caplan) In The Road to Serfdom, Hayek quoted Trotsky thusly: "Where the sole employer is the State, opposition means deaths by slow starvation."  Libertarians have repeated this line ever since, often without realizing that the source is Trotsky, not Hayek.  It... [...]
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    Posted: November 05, 2009, 5:28am EST
    by Bryan Caplan

  • Reducing Real Compensation

    (November 5, 2009 09:28 AM, by Arnold Kling) Alex Tabarrok highlights a post by David Beckworth on the sharp decline in nominal spending in 2008-2009. Alex writes, We could use some inflation to get back on track. Nominal wages are simply not flexible enough to get the job... [...]
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    Posted: November 05, 2009, 4:28am EST
    by Arnold Kling

  • Dear New Yorker: I Want My Catch Phrase Back

    (November 5, 2009 12:02 AM, by Bryan Caplan) I'm a firm believer that (a) all publicity is good publicity, (b) the more attention my memes get, the better - even if if I get no credit.  And in the past, The New Yorker has done me nothing but...' [...]
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    Posted: November 04, 2009, 7:02pm EST
    by Bryan Caplan

  • Armen Alchian

    (November 4, 2009 04:22 PM, by David Henderson) In this month's Featured Article, Fred McChesney pays tribute to the work of Armen Alchian and makes the case that he deserves the Nobel prize in economics. I already knew most of what McChesney writes because, after all, I studied... [...]
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    Posted: November 04, 2009, 11:22am EST
    by David Henderson

  • Book Update

    (November 4, 2009 01:56 PM, by Arnold Kling) The book that Amazon does not want you to read can now be ordered from Barnes and Noble. The cover image is incorrect. The book itself is something that Nick and I are very proud of.... [...]
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    Posted: November 04, 2009, 8:56am EST
    by Arnold Kling
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