by Tyler Cowen
on December 4, 2009 at 1:27 pm
1. What do we know about the Great Moderation?
2. The (full) public option would compete with providers.
3. The persistence of poverty.
4. Good essay on marriage.
5. The envelope theorem, Google style.
6. Tiger Woods wife markets in everything, Stepford fact of the day.
re: Tiger and Elin
FakeSteveJobs posted this http://www.fakesteve.net/2009/12/larry-brought-in-as-consultant-for-tiger-woods.html 3 days ago.
Fiction becomes reality.
6. Another example of how little money can buy you if you are filthy rich in America.
I never see anyone point out that the Great Moderation was also accompanied by a significant slowing of growth. From 1950 to 1979– before the early 1980s recessions — per capita real gdp growth averaged about 2.5%. Since 1983 — omitting the snap back from the early 1980s recessions — real per capita gdp growth has only average about 2.0%. You can play with the start and end dates around the early 1980s recessions and slightly change these numbers, But you can not eliminate the point that growth slowed.
This looks like a significant price to pay for less volatility.
Or is the slower growth one of the reasons that growth moderated?
Poor enough people will accept risk in the downward direction rather than smoothing consumption, so they buy lots of lottery tickets. They also commit more crime, so they can have at least some joyous times, and they take lots of “stupid” chances. Yet the poor are not irrational or necessarily dysfunctional in terms of procedural rationality, but rather they are optimizing given constraints. They are taking the Friedman-Savage model very very seriously.
So are you saying that if you took all the credentials, jobs and money away from middleclass people that they would not look for work but would start to buy lottery tickets? Hmmmm.
“So are you saying that if you took all the credentials, jobs and money away from middleclass people that they would not look for work but would start to buy lottery tickets? Hmmmm.”
For the sake of argument, take a very, very conservative position: that poor people are poor because they are less intelligent. They may be less intelligent, but that does not mean they are completely stupid or irrational. A more intelligent person may be able to work themselves out of poverty, but a lesser one not. So they assess their social position and behave rationally. It doesn’t require a high IQ to realize where you stand.
Tiger isn’t paying Elin to be his wife, he’s paying her to not take away the children.
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