Economists Do It With Models

Warning: “graphic” content…

Bookmark and Share
Economics From Around The Web

Below you will find a feed of the economics-related web sites that I find particularly interesting, insightful, entertaining, etc. (In other words, you are getting pretty much an edited view of my Google Reader.) My purpose in doing this is to provide readers with a portal for a wider range of information than I can provide myself. I will add new sources here as I come across them, and feel free to email me with suggestions for sites that you think should be included. It’s not practical to have too many sites incorporated here, so I will keep a list below both of included sites and sites that are not included but worth checking out individually. (Some of these are sites that are great but are not updated frequently enough for them to make sense in the feed.)

I am still working on the formatting, so please bear with me. For now, the page displays the last 50 posts in round robin fashion from the following sites:

The following sites are not currently included in the feed below, but are interesting nonetheless:



[CaRP] XML error: EntityRef: expecting ‘;’ at line 29 – This appears to be an HTML webpage, not a feed.

[CaRP] php_network_getaddresses: getaddrinfo failed: Name or service not known (0)

[CaRP] XML error: Undeclared entity error at line 70 – This appears to be an HTML webpage, not a feed.
Marginal REVOLUTION
Marginal REVOLUTION
Small Steps Toward A Much Better World

*Elinor Ostrom: An Intellectual Biography*
by Tyler Cowen
18 Jan 2017 at 7:32am

By Vlad Tarko, order your copy here. Here are two excerpts: She went to Beverly Hills High School, across the street from her house. “I’m very grateful for that opportunity,” she later recalled, “because 90 percent of the kids who went to Beverly Hills High School went on to college. I don’t think I would […]

The post *Elinor Ostrom: An Intellectual Biography* appeared first on Marginal REVOLUTION.

xkcd.com
 xkcd.com: A webcomic of romance and math humor.

Trash
16 Jan 2017 at 5:00am

Greg Mankiw’s Blog
Random Observations for Students of Economics

Careless Headline Writing
by  noreply at blogger.com (Greg Mankiw)
16 Jan 2017 at 6:33pm
I have noticed over the years that headline writers often try to make stories more sensational than they really are. This one at Yahoo News and Time, however, got me chuckling. The story tells us:
The gap between the super-rich and the poorest half of the global population is starker than previously thought, with just eight men, including Bill Gates and Michael Bloomberg, owning as much wealth as 3.6 billion people.That fact is not really surprising, as many people live hand-to-mouth with hardly any accumulated wealth at all. But the headline makes a stronger claim:
Half of the World?s Wealth Is In the Hands of Just Eight MenOf course, this conclusion does not follow from the fact reported in the story and is not even close to being true.

Freakonomics
The hidden side of everything

In Praise of Maintenance
by Freakonomics
12 Jan 2017 at 8:57pm

Season 6, Episode 19 On this week’s episode of Freakonomics Radio:Our society is obsessed with innovation, which has a pretty highcost. Stephen J. Dubnergot obsessed with the notion of maintenance, and talks about why itisn’t the enemy of innovation, but rather the saving grace of American infrastructure. Speaking of things that need taking care of, […]

The post In Praise of Maintenance appeared first on Freakonomics.

NYT
Economix
Explaining the Science of Everyday Life

Economix Meets the Gales of Change
by By The Editors
22 Apr 2014 at 11:00am
Economix is coming to an end, but it will be succeeded by The Upshot, a new politics, policy and economics site.

Indexed
PUBLISHED WEEKDAY MORNINGS as the COFFEE BREWS. FOR MORE randomness GO TO jessicahagy.info

Getting paid (hopefully).
by Jessica Hagy
17 Jan 2017 at 10:47pm

Share and Enjoy:

The post Getting paid (hopefully). appeared first on Indexed.

Nudge blog
Nudge blog
From Richard Thaler and Cass Sunstein’s “Nudge: Improving Decisions about Health, Wealth, and Happiness”

We?ve moved to www.nudges.org. Come with us.
by nudgeblog
27 Feb 2010 at 7:08pm
 Nudges.wordpress.com has been a great home for the Nudge blog over the past year and a half, but it’s time to move on. Where to? www.nudges.org. That’s right, we’re taking over our first home and revamping it for the future. We’ve added new social media capabilities that let you share our posts on facebook and […]

Megan McArdle | The Atlantic

Why Writers Are the Worst Procrastinators
by Megan McArdle
12 Feb 2014 at 4:48pm

Like most writers, I am an inveterate procrastinator. In the course of writing this one article, I have checked my e-mail approximately 3,000 times, made and discarded multiple grocery lists, conducted a lengthy Twitter battle over whether the gold standard is actually the worst economic policy ever proposed, written Facebook messages to schoolmates I haven?t seen in at least a decade, invented a delicious new recipe for chocolate berry protein smoothies, and googled my own name several times to make sure that I have at least once written something that someone would actually want to read.

Lots of people procrastinate, of course, but for writers it is a peculiarly common occupational hazard. One book editor I talked to fondly reminisced about the first book she was assigned to work on, back in the late 1990s. It had gone under contract in 1972.

I once asked a talented and fairly famous colleague how he managed to regularly produce such highly regarded 8,000 word features. ?Well,? he said, ?first, I put it off for two or three weeks. Then I sit down to write. That?s when I get up and go clean the garage. After that, I go upstairs, and then I come back downstairs and complain to my wife for a couple of hours. Finally, but only after a couple more days have passed and I?m really freaking out about missing my deadline, I ultimately sit down and write.?

Over the years, I developed a theory about why writers are such procrastinators: We were too good in English class. This sounds crazy, but hear me out.

Most writers were the kids who easily, almost automatically, got A’s in English class. (There are exceptions, but they often also seem to be exceptions to the general writerly habit of putting off writing as long as possible.) At an early age, when grammar school teachers were struggling to inculcate the lesson that effort was the main key to success in school, these future scribblers gave the obvious lie to this assertion. Where others read haltingly, they were plowing two grades ahead in the reading workbooks. These are the kids who turned in a completed YA novel for their fifth-grade project. It isn?t that they never failed, but at a very early age, they didn?t have to fail much; their natural talents kept them at the head of the class.

This teaches a very bad, very false lesson: that success in work mostly depends on natural talent. Unfortunately, when you are a professional writer, you are competing with all the other kids who were at the top of their English classes. Your stuff may not?indeed, probably won?t?be the best anymore.

If you?ve spent most of your life cruising ahead on natural ability, doing what came easily and quickly, every word you write becomes a test of just how much ability you have, every article a referendum on how good a writer you are. As long as you have not written that article, that speech, that novel, it could still be good. Before you take to the keys, you are Proust and Oscar Wilde and George Orwell all rolled up into one delicious package. By the time you?re finished, you?re more like one of those 1940?s pulp hacks who strung hundred-page paragraphs together with semicolons because it was too much effort to figure out where the sentence should end.

The Fear of Turning In Nothing

Most writers manage to get by because, as the deadline creeps closer, their fears of turning in nothing eventually surpasses their fears of turning in something terrible. But I?ve watched a surprisingnumber of young journalists wreck, or nearly wreck, their careers by simply failing to hand in articles. These are all college graduates who can write in complete sentences, so it is not that they are lazy incompetents. Rather, they seem to be paralyzed by the prospect of writing something that isn?t very good.

?Exactly!? said Stanford psychologist Carol Dweck, when I floated this theory by her. One of the best-known experts in the psychology of motivation, Dweck has spent her career studying failure, and how people react to it. As you might expect, failure isn?t all that popular an activity. And yet, as she discovered through her research, not everyone reacts to it by breaking out in hives. While many of the people she studied hated tasks that they didn?t do well, some people thrived under the challenge. They positively relished things they weren?t very good at?for precisely the reason that they should have: when they were failing, they were learning.

Dweck puzzled over what it was that made these people so different from their peers. It hit her one day as she was sitting in her office (then at Columbia), chewing over the results of the latest experiment with one of her graduate students: the people who dislike challenges think that talent is a fixed thing that you?re either born with or not. The people who relish them think that it?s something you can nourish by doing stuff you?re not good at.

?There was this eureka moment,? says Dweck. She now identifies the former group as people with a ?fixed mind-set,? while the latter group has a ?growth mind-set.? Whether you are more fixed or more of a grower helps determine how you react to anything that tests your intellectual abilities. For growth people, challenges are an opportunity to deepen their talents, but for ?fixed? people, they are just a dipstick that measures how high your ability level is. Finding out that you?re not as good as you thought is not an opportunity to improve; it?s a signal that you should maybe look into a less demanding career, like mopping floors.

This fear of being unmasked as the incompetent you ?really? are is so common that it actually has a clinical name: impostor syndrome. A shocking number of successful people (particularly women), believe that they haven?t really earned their spots, and are at risk of being unmasked as frauds at any moment. Many people deliberately seek out easy tests where they can shine, rather than tackling harder material that isn?t as comfortable.

If they?re forced into a challenge they don?t feel prepared for, they may even engage in what psychologists call ?self-handicapping?: deliberately doing things that will hamper their performance in order to give themselves an excuse for not doing well. Self-handicapping can be fairly spectacular: in one study, men deliberately chose performance-inhibiting drugs when facing a task they didn?t expect to do well on. ?Instead of studying,? writes thepsychologist Edward Hirt, ?a student goes to a movie the night before an exam. If he performs poorly, he can attribute his failure to a lack of studying rather than to a lack of ability or intelligence. Onthe other hand, if he does well on the exam, he may conclude that he has exceptional ability, because he was able to perform well without studying.?

Writers who don?t produce copy?or leave it so long that theycouldn?t possibly produce something good?are giving themselves the perfect excuse for not succeeding.

?Work finally begins,? says Alain de Botton, ?when the fear of doing nothing exceeds the fear of doing it badly.? For people with an extremely fixed mind-set, that tipping point quite often never happens. They fear nothing so much as finding out that they never had what it takes.

?The kids who race ahead in the readers without much supervision get praised for being smart,? says Dweck. ?What are they learning? They?re learning that being smart is not about overcoming tough challenges. It?s about finding work easy. When they get to college or graduate school and it starts being hard, they don?t necessarily know how to deal with that.”

Embracing Hard Work

Our educational system is almost designed to foster a fixed mind-set. Think about how a typical English class works: You read a ?great work? by a famous author, discussing what the messages are, and how the author uses language, structure, and imagery to convey them. You memorize particularly pithy quotes to be regurgitated on the exam, and perhaps later on second dates. Students are rarely encouraged to peek at early drafts of those works. All they see is the final product, lovingly polished by both writer and editor to avery high shine. When the teacher asks ?What is the author saying here?? no one ever suggests that the answer might be ?He didn?t quite know? or ?That sentence was part of a key scene in an earlier draft, and he forgot to take it out in revision.?

Or consider a science survey class. It consists almost entirely of the theories that turned out to be right?not the folks who believed in the mythical ?N-rays,? declared that human beings had forty-eight chromosomes, or saw imaginary canals on Mars. When we do read about falsified scientific theories of the past?Lamarckian evolution, phrenology, reproduction by ?spontaneous generation??the people who believed in them frequently come across as ludicrous yokels, even though many of them were distinguished scientists who made real contributions to their fields.

?You never see the mistakes, or the struggle,? says Dweck. No wonder students get the idea that being a good writer is defined by not writing bad stuff.

Unfortunately, in your own work, you are confronted with every clunky paragraph, every labored metaphor and unending story that refuses to come to a point. ?The reason we struggle with”insecurity,? says Pastor Steven Furtick, ?is because we compare our behind-the-scenes with everyone else?s highlight reel.?

About six years ago, commentators started noticing a strange pattern of behavior among the young millennials who were pouring out of college. Eventually, the writer Ron Alsop would dub them the Trophy Kids. Despite the sound of it, this has nothing to do with ?trophy wives.? Rather, it has to do with the way these kids were raised. This new generation was brought up to believe that there should be no winners and no losers, no scrubs or MVPs. Everyone, no matter how ineptly they perform, gets a trophy.

As these kids have moved into the workforce, managers complain that new graduates expect the workplace to replicate the cosy, well-structured environment of school. They demand concrete, well-described tasks and constant feedback, as if they werestill trying to figure out what was going to be on the exam. ?It?s very hard to give them negative feedback without crushing their egos,? one employer told Bruce Tulgan, the author of Not Everyone Gets a Trophy. ?They walk in thinking they know more than they know.?

When I started asking around about this phenomenon, I was a bit skeptical. After all, us old geezers have been grousing about those young whippersnappers for centuries. But whenever I brought the subject up, I got a torrent of complaints, including from people who have been managing new hires for decades. They were able to compare them with previous classes, not just with some mental image of how great we all were at their age. And they insisted that something really has changed?something that?s not limited to the super-coddled children of the elite.

?I?ll hire someone who?s twenty-seven, and he?s fine,? says Todd, who manages a car rental operation in the Midwest. ?But if I hire someone who?s twenty-three or twenty-four, they need everything spelled out for them, they want me to hover over their shoulder. It?s like somewhere in those three or four years, someone flipped a switch.? They are probably harder working and more conscientious than my generation. But many seem intensely uncomfortable with the comparatively unstructured world of work. No wonder so many elite students go into finance and consulting?jobs that surround them with other elite grads, with well-structured reviews and advancement.

Today?s new graduates may be better credentialed than previous generations, and are often very hardworking, but only when given very explicit direction. And they seem to demand constant praise. Is it any wonder, with so many adults hovering so closely over every aspect of their lives? Frantic parents of a certain socioeconomic level now give their kids the kind of intensive early grooming that used to be reserved for princelings or little Dalai Lamas.

All this ?help? can be actively harmful. These days, I?m told, private schools in New York are (quietly, tactfully) trying to combat a minor epidemic of expensive tutors who do the kids? work for them, something that would have been nearly unthinkable when I went through the system 20 years ago. Our parents were in league with the teachers, not us. But these days, fewer seem willing to risk letting young Silas or Gertrude fail out of the Ivy League.

Thanks to decades of expansion, there are still enough spaces for basically every student who wants to go to college. But there?s a catch: Most of those new spaces were created at less selective schools. Two-thirds of Americans now attend a college that, for all intents and purposes, admits anyone who applies. Spots at the elite schools?the top 10 percent?have barely kept up with population growth. Meanwhile demand for those slots has grown much faster, because as the economy has gotten more competitive, parents are looking for a guarantee that their children will be successful. A degree from an elite school is the closest thing they can think of.

So we get Whiffle Parenting: constant supervision to ensure that a kid can?t knock themselves off the ladder that is thought to lead, almost automatically, through a selective college and into the good life. It?s an entirely rational reaction to an educational system in which the stakes are always rising, and any small misstep can knock you out of the race. But is this really good parenting? A golden credential is no guarantee of success, and in the process of trying to secure one for their kids, parents are depriving them of what they really need: the ability to learn from their mistakes, to be knocked down and to pick themselves up?the ability, in other words, to fail gracefully. That is probably the most important lesson our kids will learn at school, and instead many are being taught the opposite.


This post is adapted from Megan McArdle’sThe Up Side of Down: Why Failing Well Is the Key to Success.

Dilbert Daily Strip

Comic for January 18, 2017
18 Jan 2017 at 11:59pm
Dilbert readers – Please visit Dilbert.com to read this feature. Due to changes with our feeds, we are now making this RSS feed a link to Dilbert.com.

Environmental Economics
The Cromulent Economics Blog

“Why did Beall’s List of potential predatory publishers go dark?”
by John Whitehead
18 Jan 2017 at 1:29pm

I’ve used this lista number of times on this blog (most recently here with, I must say, a nice comment on the economics of the industry):

Jeffrey Beall, the University of Colorado, Denver, librarian who has since 2008 chronicled ?potential, possible, or probable? predatory publishers, has ? at least for now ? pulled the plug on his influential, and at times controversial, site.

The decision to take down the site ? and Beall?s faculty page at the Auraria Library, where he remains a tenured associate professor ? was his own, the University of Colorado Denver tells Retraction Watch.

Thesite, scholarlyoa.com, which just earlier this month included a list of more than 1,000 such publishers, now contains no information. The sudden change was noted Sunday on Twitter, wherequestions about the move ? cataloged, along with some answers, by Emil Karlsson ? swirled for two days. Beall?s faculty page was also taken down.

Some of the speculation surrounded Cabell?s, a publishing services company that had earlierannounced it would house a publisher blacklist beginning sometime this year. Cabell?s, however, said it was not involved in the closure, and that it supported Beall. Cabell?s tweets also hinted at legal threats, which Beall has faced in the past.

via retractionwatch.com

Emil Karlsson reports:

BREAKING: Retraction Watch has received a statement by the university indicating that Beall ?has decided to no longer maintain or publish his research or blog on open access journals and ?predatory publishers?.? The statement notes that ?Professor Beall remains on the faculty at the university and will be pursuing new areas of research?. Now the only information that we need is additional details about why Beall decided to call it quits. Did he reach his breaking point or where lawsuit threats (or similar) involved? (note added 20170118 01:14 UTC+1).

BREAKING: ScienceInsider reports that the university has stated that the disappearance of the list is not related to legal threats. Now we know the ?how? and the ?what?, but not the ?why? (note added 20170118 01:47 UTC+1).

It is a shame that we have lost this public good. Predatory journals are a problem in academic publishing. I’ve sent two papers to journals on Beall’s list over the past several years. I submittedold, unpublished papers with a made up name and email address. Both papers were accepted for publication in a couple of days with either no or very minor revision. The journals then began asking for money and I closed the email accounts.

Emil Karlsson posts links to the list:

Thankfully, there are cached copies of his key lists available:

Publishers: Archive.is | Archive.org
Standalone journals: Archive.is | Archive.org
Hijacked journals: Archive.is | Archive.org
Metric companies: Archive.is | Archive.org

Here is the January 13 link on the Wayback Machine: NPR Blogs: Planet Money

High Unemployment, Low Interest Rates: Get Used To It
4 Jun 2010 at 3:38pm
By Jacob Goldstein Today’s monthly jobs report suggests two key pieces of the economic picture are likely to persist in the coming months: High unemployment and low interest rates. Hundreds of thousands of temporary workers hired to help conduct the census — which accounted for the overwhelming majority of jobs created in May — will once again find themselves out of work later this year. These weekly figures from the census department suggest the number of temporary workers employed by the census peaked the first week of May — during the same period that the labor department took its monthly jobs survey — and has already begun to decline. “I do think that we have peaked,” Census spokesman told The Hill this week. “I do not expect it to go back up.” In 2000, during the last census, the census department added 348,000 jobs in May, then cut 225,000 jobs in June. Meanwhile, state and local governments cut jobs in May. That is likely to continue, the WSJ says. And private-sector job growth was anemic in May — 41,000 jobs, down from more than 200,000 in April, and not enough to drive an economic recovery. (The number of jobs in manufacturing and temporary services increased, but the number of jobs in construction fell.) “Remember, it requires 150,000 to 200,000 jobs [per month] in order to reduce that unemployment rate,” Bill Gross, who manages the bond fund Pimco, told Bloomberg News. The unemployment rate fell from 9.9 percent to 9.7 percent in May, but the decline was largely due to the fact that fewer people were looking for work. (The unemployment rate only includes those who are actively seeking employment.) Before the recession, the rate was less than 5 percent. High unemployment, in turn, means the Federal Reserve is likely to keep interest rates ultra-low. This is true for a few reasons. For one thing, when more people are out of work, consumers spend less money. That lowers the risk of inflation, which can be a byproduct of low rates. For another, low interest rates make it more appealing for businesses to borrow money to drive growth, which creates new jobs. At least in theory. “[W]e are now in the fourth quarter of economic expansion, with jobs once more being created rather than destroyed,” Fed chairman Ben Bernanke said yesterday. “Nonetheless, important concerns remain. One particularly difficult issue is the continued high rate of unemployment.”

Ecocomics
Where Graphic Art Meets Dismal Science

Does Anyone Still Subscribe to This?
by ShadowBanker
10 Jun 2013 at 3:40pm
Hi folks!  It’s been a while.  How are you all doing?

If there is any demand, I will continue to regularly update this blog.  Just let me know.

Also, what comics should I be reading?

The Becker-Posner Blog
Welcome to the new Becker-Posner Blog, maintained by the University of Chicago Law School.

Farewell
by Richard Posner
11 May 2014 at 4:48am

In memoriam: Gary S. Becker, 1930-2014.

The Becker-Posner blog is terminated.

Richard A. Posner

EconomistMom.com
…because I’m an economist and a mom–that’s why!

Back to Just (An) Economist Mom
by economistmom
10 Jan 2013 at 6:18pm
After 4 and 3/4 years and 932 posts (counting this one), I’m putting down my pen as “the EconomistMom” (capital-E, capital-M, smooshed together) and going back to being (more ordinarily) just (an) economist mom. (I think in my older (i.e., younger) days I would have been anal about it and set a target of ending […]

Marginal REVOLUTION
Marginal REVOLUTION
Small Steps Toward A Much Better World

*Experimental Conversations*
by Tyler Cowen
18 Jan 2017 at 6:09am

The editor of this truly excellent book is Timothy N. Ogden, the subtitle is Perspectives on Randomized Trials in Development Economics, and the contributors include Angus Deaton, Dean Karlan, Lant Pritchett, David McKenzie, Judy Gueron, Rachel Glennerster, Chris Blattman, and yours truly, with a focus on randomized control trials and other experiment-related methods. Here is […]

The post *Experimental Conversations* appeared first on Marginal REVOLUTION.

xkcd.com
 xkcd.com: A webcomic of romance and math humor.

Wifi
13 Jan 2017 at 5:00am

Greg Mankiw’s Blog
Random Observations for Students of Economics

History of Econ Summer Camp
by  noreply at blogger.com (Greg Mankiw)
12 Jan 2017 at 10:15pm
Graduate students with an interest in the history of economic thought should consider this opportunity.

Freakonomics
The hidden side of everything

Trevor Noah Has a Lot to Say
by Stephen J. Dubner
12 Jan 2017 at 4:00am

The Daily Show host grew up as a poor, mixed-race South African kid going to three churches every Sunday. So he has a sui generis view of America ? especially on race, politics, and religion ? and he?s not afraid to speak his mind.

The post Trevor Noah Has a Lot to Say appeared first on Freakonomics.

NYT
Economix
Explaining the Science of Everyday Life

Mortgage Reform Is Worth the Small Extra Cost to Borrowers
by By Phillip Swagel
18 Apr 2014 at 11:00am
The higher cost for borrowers in a Senate bill reforming Fannie Mae and Freddie Mac corresponds to the protection for taxpayers that was missing in the old system, writes an economist.

Indexed
PUBLISHED WEEKDAY MORNINGS as the COFFEE BREWS. FOR MORE randomness GO TO jessicahagy.info

Not funny. Just sad.
by Jessica Hagy
17 Jan 2017 at 12:55am

Share and Enjoy:

The post Not funny. Just sad. appeared first on Indexed.

Nudge blog
Nudge blog
From Richard Thaler and Cass Sunstein’s “Nudge: Improving Decisions about Health, Wealth, and Happiness”

Auto-suggest suggests how far behavioral economics has come, and how far it s…
by nudgeblog
25 Feb 2010 at 2:30am
In terms of recognition and respect, behavioral economics has certainly come a long way in the last 25 years. But it is still a Hibernian outpost in the great Roman Economics empire. One of the newest metrics for evaluating its impact is the auto-suggest feature in many search engines that has become quite popular since […]

Megan McArdle | The Atlantic

Romney’s America: Fewer Cops, Fewer Firefighters, Fewer Teachers?
by Megan McArdle
10 Jun 2012 at 2:49pm

Guest post by Mark A.R. Kleiman, public policy professor at UCLA. Professor Kleiman regularly blogs at The Reality Based Community.

Here is Mitt Romney, criticizing Barack Obama’s plans to help the states and localities reverse the shrinkage in government employment currently dragging us back into recession: “He wants another stimulus, he wants to hire more government workers. He says we need more fireman, more policeman, more teachers. Did he not get the message of Wisconsin? The American people did. It’s time for us to cut back on government and help the American people.”
I haven’t seen any polling on this, but if Romney wants to make this election about whether we need more cops, firefighters, and teachers, Barack Obama ought to accept the invitation. At least Romney is more honest (or just more tone-deaf) than his co-partisans such as Scott Walker, who usually pretend we can cut taxes by eliminating “bureaucrats.”
Of course the real hard-core Ayn Rand types think it’s a good thing if a schoolteacher loses her job and has to become a stripper — since, after all, by definition private-sector employment is productive while public-sector employment is unproductive — but Mitt’s welcome to that 25% of the vote.

It’s true that there are ways of getting crime control, firefighting, and teaching done with fewer people. The police are only starting to adapt to social and technical facts (almost everyone walking around with a video camera connected to the Net) that could allow the “crowdsourcing” of much of police information-gathering. Changing construction codes have greatly reduced the need for urban firefighters, and the Fire Department is not the best or cheapest way to provide emergency medical service. (On the other hand, increased wildfires due to climate change and exurban sprawl means we need more rural firefighting, and that’s an expensive activity.) Interactive software and video can – will have to – replace much of the teaching function. In each case, we need to find a way past the Baumol Cost Disease.
But that’s all in the long run.Today and tomorrow, fewer cops means more crime, fewer firefighters means fewer heart-attack survivors, fewer teachers means worse-educated students. And in the medium term those technological changes will require investments. The cost curve will bend up before it bends down.

Romney thinks the “lesson of Wisconsin” is that the American people have been conned into wanting fewer public services so they can buy bigger TV sets. He’s wrong as a matter of politics. In agreeing with them, he’s also wrong as a matter of policy.

Dilbert Daily Strip

Comic for January 17, 2017
17 Jan 2017 at 11:59pm
Dilbert readers – Please visit Dilbert.com to read this feature. Due to changes with our feeds, we are now making this RSS feed a link to Dilbert.com.

Environmental Economics
The Cromulent Economics Blog

Gas prices were $4/gallon in 2013
by John Whitehead
13 Jan 2017 at 6:35pm

To appreciate challenge of decarbonizing transport, see: 16 yrs since intro, hybrids are just 2% US auto sales – and falling from 2013 peak. pic.twitter.com ? Teryn Norris (@TerynNorris) January 13, 2017

NPR Blogs: Planet Money

Job Growth: A Big, Disappointing Number
4 Jun 2010 at 2:06pm
The U.S. economy added 431,000 new jobs in May, the federal government said this morning. Sounds promising. But dig a little deeper, and the number doesn’t look so nice. Almost all of those jobs — 411,000 of them — were temporary employees hired to work on the census. Those jobs typically last only for a few months. The private sector added only 41,000 jobs during the month. It’s much lower than what economists were expecting, and far fewer jobs than private employers added in April. It suggests the economic recovery is slowing. Private employers added more than 200,000 new jobs in April. And Economists were predicting that private employers would add more than 100,000 jobs in May. The economy has shed more than 7 million jobs since the end of 2007, though the number of jobs has increased since the start of 2010. May was probably the peak month for census hiring, Bloomberg News notes. And in the coming months, the census department will begin dismissing more employees than it hires. The unemployment rate fell to 9.7 percent in May, down from 9.9 percent the month before, the government said this morning. But that number, like the jobs number, is somewhat misleading. The unemployment rate only considers people who are actively seeking work and can’t find it. In May, fewer unemployed people started looking for work again. That contributed to the decline in unemployment.

Ecocomics
Where Graphic Art Meets Dismal Science


Can Wolverine Build a School?
by ShadowBanker
17 Nov 2011 at 2:30pm
Wolverine #17 by Jason Aaron and Ron GarneyMarvel Comics, 2011
Where does Wolverine get his money from? If he has managed to save up enough to start a new school for mutants in Westchester, he must certainly have exercised several lifetimes of prudent money management. Here is what we had to say about this before:

Throughout his long, long life Wolverine has shown very little interest in matters of an economic nature. He’s spent most of his time living in cabins, hovels, and sleeping in the beds and houses of others. His worldly possessions seldom exceed the clothes on his back (usually a jumpsuit made of spandex or leather), a cache of cheap cigars, a motorcycle, and a six-pack of beer. This is the sum of the worldly possessions he has accrued in over 100 years of life. Granted, a large part of this life was spent being mind controlled and experimented on, but in the years since he’s escaped from Weapon X, Wolverine has made a series of life decisions which placed him in financial jeopardy.

We know Wolverine likes to live a life of modesty. Previously, I thought this was due to the fact that, despite living the equivalent of several lifetimes, he never took a job that was lucrative enough for him to splurge on things like mansions and jets.
Evidently, this is incorrect. Turns out that Wolverine has been slowly saving for years and has now accrued enough funds to open a school.
I haven’t the fainted idea of what it costs to open a school. I doubt that the Xavier Institute was a charter school or received any sort of public funding. In today’s Marvel Universe, mutants are still highly stigmatized so it is unlikely that Wolverine will be able to receive any sort of grant or government assistance, unless through nefarious means (snikt snikt). I do, however, know that it is extremely expensive, probably requiring initial funding of upwards of $500,000 to one million dollars. Westchester County, New York, also seems like it would be particularly costly.
Is it possible that Wolverine managed to save up this much money? Actually, it doesn’t seem that crazy. Let’s assume all assets that he had saved up prior to his kidnapping by the Weapon X program had been wiped (it is unlikely that the sinister Canadian organization let him keep his money). Then, once Logan escapes the program (well after World War II), he had to start with nothing.
He then met Charlies Xavier and joined up with the X-Men in the 1970s. I think it’s safe to assume that he started his savings at this point. Assuming that he had been paid a salary for his service (something of which I am not sure, though I imagine he needed some form of income to, you know, eat) and that he served continuously through the present (a stretch, but it would be difficult to account for all the gaps in his time with the X-Men), it is certainly feasible that Wolverine had saved the amount required to at the very least put forth the initial funds. He had been actively working for four decades (longer if you count the time between Weapon X and the X-Men, where he was employed with Department K and probably earned some sweet government pay) and his expenses were minimal (for a while, he took up free residence at the X-Mansion and, as mentioned above, spends very little on material things).
Therefore, it would appear as though Wolverine’s modest lifestyle is evidence of prudence and thrift, rather than of having little assets.
Hell, Logan might even be part of the 1%.

The Becker-Posner Blog
Welcome to the new Becker-Posner Blog, maintained by the University of Chicago Law School.

Sabbatical Notice
by Richard Posner
15 Mar 2014 at 2:05am

Starting this weekend, we will be taking a one-month sabbatical from blogging. We will resume at the end of that period.

EconomistMom.com
…because I’m an economist and a mom–that’s why!

Over the Cliff and Yet Back in the Same Place
by economistmom
2 Jan 2013 at 5:37pm
It’s as if we’ve just survived a near-death experience. (Image above from NPR.) Like we followed the light and even saw the pearly gates and then miraculously were sucked back down into our bed overnight! We technically “went over” the fiscal cliff at midnight yesterday, and yet here we are today celebrating more extended tax […]

Marginal REVOLUTION
Marginal REVOLUTION
Small Steps Toward A Much Better World

Did 18th century prizes really stimulate innovation?
by Tyler Cowen
17 Jan 2017 at 6:52pm

Maybe not, possibly patents were more effective. Here is some new research from B. Zorina Khan, entitled “Prestige and Profit: The Royal Society of Arts and Incentives for Innovation, 1750-1850”: Debates have long centered around the relative merits of prizes and other incentives for technological innovation. Some economists have cited the experience of the prestigious […]

The post Did 18th century prizes really stimulate innovation? appeared first on Marginal REVOLUTION.

xkcd.com
 xkcd.com: A webcomic of romance and math humor.

Bad Map Projection: Liquid Resize
11 Jan 2017 at 5:00am

Greg Mankiw’s Blog
Random Observations for Students of Economics

Challenges Facing the New President
by  noreply at blogger.com (Greg Mankiw)
10 Jan 2017 at 5:09pm
You can watch the AEA session I chaired by clicking here.

Freakonomics
The hidden side of everything

The Church of ?Scionology?
by Freakonomics
5 Jan 2017 at 5:14pm

Season 6, Episode 18 On this week’s episode of Freakonomics Radio: if you’ve built a successful business ? be it abakery,acarmakeror anewspaper? who continues the legacy when you retire? For many Fortune 500 companies, the answer is obvious: one (or more) of your children take thehelm. But let’s get beyond the nepotism and silver spoons, […]

The post The Church of ‘Scionology’ appeared first on Freakonomics.

NYT
Economix
Explaining the Science of Everyday Life

In Europe, Auto Sales Are Still Low, But They Are Rising
by By Floyd Norris
17 Apr 2014 at 11:19pm
New car sales are up by more than 10 percent in Ireland, Greece, Spain and Portugal, which signals stronger economic growth there, even if sales are still far below 2007 levels.

Indexed
PUBLISHED WEEKDAY MORNINGS as the COFFEE BREWS. FOR MORE randomness GO TO jessicahagy.info

No news is better news.
by Jessica Hagy
13 Jan 2017 at 6:07pm

Share and Enjoy:

The post No news is better news. appeared first on Indexed.

Nudge blog
Nudge blog
From Richard Thaler and Cass Sunstein’s “Nudge: Improving Decisions about Health, Wealth, and Happiness”

Millionaire athletes hate handing over $20 cash for being late
by nudgeblog
24 Feb 2010 at 2:39am
UCLA economist Matthew Kahn picks up on a neat little story about Los Angeles Lakers coach Phil Jackson’s use of psychology in his NBA locker rooms. Ever the behavioralist, Jackson fined his players tiny amounts – $10 and $20 – for being late to games by a few minutes. Jackson has found that players are […]

Megan McArdle | The Atlantic

On the Death of a Public Policy Giant
by Megan McArdle
6 Jun 2012 at 6:34am

Guest post by Mark A.R. Kleiman, public policy professor at UCLA. Professor Kleinman regularly blogs at The Reality Based Community.

Jim Wilson, who died at a very young and vigorous 80 this March, left a huge imprint on American social science and public policy. He was also my friend, over a fairly yawning political divide. So I was delighted as well as honored when Zcalo Public Square asked me to moderate a panel discussion about his legacy.

The panelists were Angela Hawken of Pepperdine, Mark Peterson of UCLA, and Chief Charlie Beck of the LA Police Department. All of us admired him and learned from Jim, and all of us had critical things to say about some aspects of his thought, or the thought attributed to him. Charlie Beck’s exposition of the difference between community policing based on the “broken windows” idea (often useful) and “zero tolerance” policing (always disastrous) is especially valuable, but Angela Hawken offers a wonder appreciation of Jim as a teacher and as someone willing to change his mind in the face of the facts, and Mark Peterson a clear explanation of how Jim, a conservative and a political scientist, differed from contemporary conservatism in politics and from the main conservative strain in political science: primarily in his belief in the positive role of government and the potential nobility of political action.

Full video (about 70 min.) here.

Dilbert Daily Strip

Comic for January 16, 2017
16 Jan 2017 at 11:59pm
Dilbert readers – Please visit Dilbert.com to read this feature. Due to changes with our feeds, we are now making this RSS feed a link to Dilbert.com.

Environmental Economics
The Cromulent Economics Blog

“Updating Estimation of the Social Cost of Carbon Dioxide”
by John Whitehead
13 Jan 2017 at 3:41pm

Here is a good summary of the NAS report from the Washington Post:

How we view the costs of future climate change, and more importantly how we quantify them, may soon be changing. A much-anticipated new report, just released by the National Academy of Sciences, recommends major updates to a federal metric known as the ?social cost of carbon? ? and its suggestions could help address a growing scientific concern that we?re underestimating the damages global warming will cause.

The social cost of carbon is an Obama-era metric first addressed by a federal working group in 2009. The basic premise is simple: Scientists agree that climate change will have all kinds of impacts on human societies, including natural disasters and effects on human health, productivity and agricultural output, all of which have economic consequences.

The social cost of carbon, then, refers to the monetary cost of emitting a single ton of carbon dioxide into the atmosphere, given that these emissions will further contribute to global warming. The value has been used to aid in cost-benefit analyses for a variety of federal environmental rules. Currently, it?s set at about $36 per ton of carbon dioxide.

But the new NAS report, requested by the federal Interagency Working Group on the Social Cost of Carbon, suggests the methodology used to arrive at this value is in need of updating, both to make it more transparent and more scientifically sound. …

The method developed by the original federal working group relies on a set of three models which translate current carbon emissions into future temperature increases, factor in the damages that may be caused by the resulting climatic changes in the future and then translate these damages into dollars. The method also applies a discount rate to account for the fact that these damages will occur in the future, rather than right away ? the discount rate can be thought of as a kind of interest rate addressing how much the future generation is willing to pay now to avoid climate consequences in the future.

The new report recommends a new framework that unbundles the various steps of the calculation process and addresses them in separate modules, all of which feed into and inform each other. The report suggests that, over the next two-to-three years, these modules be shaped to rely on the most relevant and up-to-date science in each area ? and it also suggests that estimates of the social cost of carbon be updated every five years.

These recommendations address a growing concern in the scientific community that our increasing scientific understanding of the consequences of climate change isn?t adequately represented in the current methodology. In fact, climate scientists and economists alike have begun to argue that the current models may actually be underestimating the social cost of carbon. …

There are several major ways the new report?s recommendations could cause this to happen, said Richard Revesz, a law professor and dean emeritus of the New York University School of Law, who also served as a reviewer on the new report. For one thing, accounting for certain climate damages that were omitted in the older models could drive the value up, he said.

A second factor involves the report?s approach to the use of discounting. When calculating the social cost of carbon, applying a higher discount rate causes the cost to decrease, and vice versa. Critics who favor a lower social cost of carbon have sometimes argued that the current discount rate used by the federal government ? 3 percent, in most cases ? is too low. …

Revesz added that the current estimate of the social cost of carbon is a global estimate ? that is, it applies to the entire world, not just the United States. Some critics have argued for a U.S.-specific estimate in the future, which would be a smaller value than the global estimate. This argument is also addressed in the new report, which recognizes the many uncertainties and difficulties that would be associated with making such an estimate.

The article also addresses the political implications. My translation of this part is thatthe benefits of addressing climate change will soon be considered zero as with other government regulations.

You can get the page proofs for free here: NPR Blogs: Planet Money

Mohamed El-Erian Explains ‘The New Normal’
3 Jun 2010 at 8:15pm
Everybody’s talking about the “new normal.” On the investing shows, this is shorthand for an era in which returns on stocks and bonds are lower than they’ve been in the past. But Mohamed El-Erian, the bond-fund CEO who coined the term, says it goes much deeper than that. Today on All Things Considered, El-Erian tells Planet Money’s Adam Davidson that the new normal includes changes to the fundamental structure of the global economy: The world of yesterday was a world of tidy categories. On the one hand you had industrial countries, advanced economies. On the other hand, emerging economies. The first were the core of the system they held the system together. The second, emerging economies, were at the periphery and tended to be crisis prone. The financial crisis changed that, as China — an emerging economy — served as a key stabilizing force in a global financial crisis that started in the U.S. The shift has continued this year, as industrialized countries like Greece, Spain and Portugal have found themselves in the kind of dicey debt situation traditionally associated with developing countries. In the new normal, El-Erian says, the traditional major players like the U.S. and Germany will have less influence. And the likes of India, China and Brazil will have more. The shift will be turbulent. But, El-Erian says, the end result will be a more stable global economy. “It is better to have many locomotives of growth in the world,” he says.

Ecocomics
Where Graphic Art Meets Dismal Science

Disproportionate Response Man
by ShadowBanker
20 Oct 2011 at 4:37pm
A great entry from Saturday Morning Breakfast Cereal:

The Becker-Posner Blog
Welcome to the new Becker-Posner Blog, maintained by the University of Chicago Law School.

The Embargo of Cuba: Time to Go- Becker
by Gary Becker
4 Mar 2014 at 12:53am

The US embargo of Cuba began in 1960, a year after Fidel Castro turned this island toward communism. It was extended to food and medicines in 1962, the same year as the showdown with Russia over the installation of missiles there. The embargo has prevented American companies from doing business with Cuba, and discouraged tourism to Cuba. The American government also tried with quite limited success to prevent other countries from trading with Cuba.

In general economic embargoes are undesirable because they interfere with free trade among countries. Yet a case could be made for an embargo against Cuba. Castro not only allowed Russian missiles to be installed in Cuba, just 90 miles from Florida, but was also actively trying to interfere in other countries by sending troops and so-called advisers. The aim of the embargo was to impose economic hardship on Cuba that would force Castro to drop these international actions, and possibly even lead to the toppling of his government and the end of communism in Cuba. Castro did stop his international adventurism, but he and communism remained firmly entrenched for decades.

The Cuban economy has done badly, and has fallen behind the economies of many comparable countries. For example, in 1959, Cuban per capita income was above that of Taiwan, another island close by a hostile super power. Cuba?s two main exports were sugar and tobacco, while Taiwan?s were sugar and rice. At that time, Taiwan began its transition toward a private market system and globally oriented economy, whereas Cuba abolished private property and the government took charge of the economy with central planning and central organization. Since then Cuba?s economy has fallen far behind Taiwan?s as Taiwan has taken advantage of world markets to grow at a remarkable rate while Cuba has chugged along with very slow growth. Cuba?s per capital income is a fifth or less of that of Taiwan. Sugar and tobacco remain important exports of Cuba, while Taiwan has shifted toward complex electronic and industrial goods. Fidel Castro was a charismatic leader who mesmerized audiences with his oratory, but he utterly failed to deliver the goods to the Cuban people.

Cuba?s weak economic performance is in small part due to the embargo since the US would be a natural important trading partner for Cuba, as it is for other nearby Caribbean countries, and for Mexico and other Central American countries. Yet communism itself is the main cause of its poor economic performance. One can say this with complete confidence since communism has utterly failed as an economic system in every country where it has been tried.

One only need look at the difference between the economies of South and North Korea for a clear natural experiment on the disadvantages of an economic system with no private property and central direction of the economy. Prior to the Korean War, the backward part of the Korean economy was in the south and the advanced industrial part was in the north. The roles are now radically reversed since the South and its private enterprise system is far ahead economically (and in other dimensions as well) of the North.

In the last decade, with Fidel Castro ailing and his brother Raul taking over leadership, the Cuban government has begun to realize what the Cuban people long ago learned, that communism is responsible for the vast majority of its economic weakness. Despite the opposition of hardliners, Cuba is allowing very small-scale private firms in retailing and other sectors, and houses can be bought and sold to a limited extent. These are only baby steps away from communism, but they put Cuba on a slippery slope toward a more market-based economy that will be hard to reverse.

Free trade is a principle that the United States should follow except in extraordinary circumstances. Cuba under Fidel, especially in his early days, may have provided enough of these circumstances to justify the embargo. Since Cuba no longer provides any significant threat to American interests, there is no sense in continuing to punish the Cuban people with an embargo on trade, nor to provide excuses to its leaders for the poor performance of the Cuban economy.

It is time to end the embargo on the export and import of goods and services between the United States and Cuba The Cuban people will benefit almost immediately. This may just be the time when such a move puts added pressure on the Cuban government to end its failed experiment with communism.

EconomistMom.com
…because I’m an economist and a mom–that’s why!

Doomsday for the Cliff Deal
by economistmom
21 Dec 2012 at 1:22pm
All over an unwillingness to convince his colleagues to let tax rates come back up (as scheduled) on (even) the very richest, any “deal” between Boehner and Obama is off –at least until after Christmas: House Speaker John A. Boehner threw efforts to avoid the year-end ?fiscal cliff? into chaos late Thursday, as he abruptly […]

Marginal REVOLUTION
Marginal REVOLUTION
Small Steps Toward A Much Better World

Tuesday assorted links
by Tyler Cowen
17 Jan 2017 at 5:50pm

1. How much parsimony is there in behavioral economics? 2. The last time a foreign power successfully intervened in an American presidential election. 3. Beatrice Cherrier is a new and noteworthy figure in the economics blogosphere. 4. Arnold Kling on economics and culture. 5. Scalpers with Trump event tickets are getting burned. In fairness, it […]

The post Tuesday assorted links appeared first on Marginal REVOLUTION.

xkcd.com
 xkcd.com: A webcomic of romance and math humor.

Emails
9 Jan 2017 at 5:00am

Greg Mankiw’s Blog
Random Observations for Students of Economics

Parting Words
by  noreply at blogger.com (Greg Mankiw)
6 Jan 2017 at 4:34pm
Here is the exit memo from CEA chair Jason Furman.

Freakonomics
The hidden side of everything

The Men Who Started a Thinking Revolution
by Stephen J. Dubner
5 Jan 2017 at 4:00am

Starting in the late 1960s, the Israeli psychologists Amos Tversky and Danny Kahneman began to redefine how the human mind actually works. Michael Lewis?s new book The Undoing Project explains how the movement they started ? now known as behavioral economics ? has had such a profound effect on academia, governments, and society at large.

The post The Men Who Started a Thinking Revolution appeared first on Freakonomics.

NYT
Economix
Explaining the Science of Everyday Life

The End of Our Financial Illusions
by By Simon Johnson
17 Apr 2014 at 4:01am
Much progress has been made on overseeing the largest banks, but a good deal more must be done to toughen standards and end government subsidies, an economist writes.

Indexed
PUBLISHED WEEKDAY MORNINGS as the COFFEE BREWS. FOR MORE randomness GO TO jessicahagy.info

Getting ideas together.
by Jessica Hagy
12 Jan 2017 at 11:57pm

Share and Enjoy:

The post Getting ideas together. appeared first on Indexed.

Nudge blog
Nudge blog
From Richard Thaler and Cass Sunstein’s “Nudge: Improving Decisions about Health, Wealth, and Happiness”

Italian RECAP?
by nudgeblog
23 Feb 2010 at 3:13pm
Bank of Italy Governor Mario Draghi says “the variety of new (bank) fees makes it difficult for customers to compare the different offers.” He then seems to propose a RECAP-style system of simplification and disclosure. Within days we will submit to the Government a comprehensive regulatory proposal that can lead to clearly stated charges, so […]

Megan McArdle | The Atlantic

Thyucidides on War With Iran
by Megan McArdle
5 Jun 2012 at 4:30pm

Guest post by Mark A.R. Kleiman, public policy professor at UCLA. Professor Kleinman regularly blogs at The Reality Based Community.

I’m grateful to Megan for the invitation to guest-blog, but I’m also somewhat daunted at the prospect of having to replace her usual output in quality and quantity. So, as I have before as a guest-blogger, I’m going to mix some new material with some recycled “greatest hits” from blogs of yesteryear.

So, to start off: In light of the current drumbeat for war with Iran — from lunatics in Tel Aviv and their assistant lunatics on the American right wing — some of what I said a decade ago in the run-up to war with Iraq seems relevant. At the end of the day, I wound up supporting that particular debacle, albeit unenthusiastically. That was a mistake. But at least I never allowed myself to fall into the delusion that war was ever without risks.

***

A blogger who thinks we should go to war quotes Thucydides: “The secret of happiness is freedom, and the secret of freedom is courage.” Here’s the full passage, in a different translation. It’s from the great Funeral Oration of Pericles:

For the whole earth is the tomb of famous men; not only are they commemorated by columns and inscriptions in their own country, but in foreign lands there dwells also an unwritten memorial of them, graven not on stone but in the hearts of men. Make them your examples, and, esteeming courage to be freedom and freedom to be happiness, do not weigh too nicely the perils of war.

The language is magnificent; but the context made it deeply ironic then, and its use now in the pro-war cause is not less ironic. Pericles had just led the Athenians into the Peloponnesian war, and the speech, given after its first, victorious year, is confident of victory, even somewhat boastful. Yet Thucydides’ readers knew that this was to be the high-water mark of Athenian greatness: what was to follow was defeat, conquest, and the imposition of a Quisling government. Later Athens was to regain its independence, but not its hegemony, and its permanently poisoned relationships with the other poleis were to lead, in the next century, to the conquest of all of Greece by the Macedonians under Philip and Alexander.

So when Pericles urges his hearers not to “weigh too nicely the perils of war,” we are meant to hear in the background Thucydides’ sardonic laughter. Pericles took his own advice (or perhaps Thucydides put into the mouth of Pericles words appropriate to his actions), and the result was catastrophe.

Going to war with Iraq may be the safest, smartest thing we could possibly do; reading the arguments made against it is almost enough to make me think so. What worries me is that I do not now see in power men and women who nicely weigh the perils of war. Rather, I think I see a truly Periclean hubris, albeit expressed in much less stirring language.

America is, in many ways, the new Athens. The parallels between the Peloponnesian war and the Cold War are almost eerie: a land-based, insular, impoverished, culturally conservative and backward land power against a wealthy, mercantile, culturally rich, heterogeneous, and innovative democracy. Only this time the good guys won. Let’s not have it go to our heads. A calculating boldness is a virtue; rashness is a vice. There are better uses for the whole earth than to make it our tomb.