*Regulation and Economic Growth*

by on June 23, 2017 at 1:50 pm in Books, Economics | Permalink

The author is James Broughel and the subtitle is Applying Economic Theory to Public Policy.  I am biased, as James was my doctoral student and this is an adaptation of his thesis, but I think this is a great work and also well-written and fun to read.  It’s the single best piece written on how to think about how regulation impacts economic growth — in particular once-and-for-all effects vs. growth rate changes — and that is one of the most neglected economic policy questions today.

1 Rob June 23, 2017 at 1:54 pm

Most regulation isn’t meant to improve any economic metrics. Its an economic cost for some social benefit. The problem is that the cost of the first is easily measured and often falls on people with means while the second is very difficult if not impossible to measure and benefits people who don’t necessarily contribute financially to think tanks and politicians.

2 Ray Lopez June 23, 2017 at 3:34 pm

That’s right. Cass Sunstein is one authority on this topic. That’s why you get outfits that claim due to global warming there’s no fossil fuel that’s economically feasible, likewise, for fishing, there’s no seafood caught in the wild that’s economically feasible, depending on how you value externalities. At the limit, this thinking is absurd.

This by TC strikes me as metaphysics: “It’s the single best piece written on how to think about how regulation impacts economic growth — in particular once-and-for-all effects vs. growth rate changes” – any mathematician will tell you a response y(x) = f(x) will often have a steady state component (“growth rate changes”) and a component that depends on initial conditions (‘once-and-for-all effects’), so the answer is both, hard to disentangle for the social sciences like economics. Re initial conditions, some studies show that slavery still impacts the Congo and the US south, and Pb/Au/Ag Potasi mines in Bolivia from the days of the Conquistadors still impact poverty today, possibly since Pb is found in Ag and has risks with small children’s IQ, IMO.

3 Lanigram June 23, 2017 at 3:55 pm

Don’t forget the “transient response”.

Then there’s non-linearity, ie the rest of the world. Then you have chaotic systems. I suspect, but cannot prove, that most economic systems are chaotic. We don’t really know where we are going, but we are probably not coming back to here or some other previous point in the phase space known as history.

Enjoy the ride!

4 Troll Me June 24, 2017 at 10:50 am

Economics is a field which tends to have high valuation for different preferences of different people.

There is nothing absurd about a preference for zero use of fossil fuels or zero wild catch of fish. As policy, the costs and benefits do not suggest that these preferences are likely to be represented in their pure form after going through the political process.

5 Let me guess June 23, 2017 at 1:55 pm

Let me guess, the author concludes more de-regulation is needed 🙂

6 Phillip Morgan June 23, 2017 at 6:59 pm

I am a British historian. What I’m doing here, is to see if John Wesley and Thomas Bayes knew each other. Kent to Oxford is 123 miles without traffic.

In June 1720, Wesley entered Christ Church, Oxford. On his return around 1722, Bayes assisted his father at the latter’s chapel in London before moving to Tunbridge Wells, Kent, around 1734


It appears that John Wesley did preach at Turnbridge.

7 prior_test2 June 23, 2017 at 1:59 pm

So, there seems to be a secular stagnation occurring here concerning the terms ‘excellent’ and ‘self-recommending.’

Must be due to some sort of excessive regulatory framework. Maybe a GMU student could publish a paper tracing the decline of such exemplary MR terms, to help us take those small steps to a better world.

8 Ricardo June 23, 2017 at 2:23 pm

It is not “self-recommending” because no one (yet?) knows who James Broughel is.

9 ürior_test2 June 23, 2017 at 2:51 pm

And here I was, thinking ‘self-recommending’ was an immanent quality.

10 prior_test2 June 23, 2017 at 2:53 pm

oops – OK, I do use a German QWERTZ keyboard, and ü is on the right of p.

11 Ray Lopez June 23, 2017 at 4:40 pm

Why don’t you stop using the “umlaut” (ü) and get modern? Or do you think that dropping this bogus character will take away from your national identity? After all, it’s unlikely anybody except grandma will be confused if you replace “ü” with “u”.

Bonus trivia: in the EU about 10-15 years ago, a big deal is whether EU standard keyboards should drop the tilde, “~”.

12 Dave Smith June 23, 2017 at 2:36 pm

4 bucks? I’m going to read it this weekend.

13 dearieme June 23, 2017 at 6:19 pm

“I think this is a great work and also well-written …”: should one take guidance on how well written something is from someone who feels that ‘well written’ benefits from a hyphen?

P.S. The Wealth of Nations is a great work. The Road to Serfdom is a great work. There’s no need to encourage grade inflation of “great” (unless you have a secret ambition to be a sports commentator).

14 Rafael R June 23, 2017 at 6:43 pm

Indeed. Grade inflation there is!

15 Jill Lepore June 23, 2017 at 7:42 pm

I am here to answer Professor Morgan. As I wrote in the New Yorker, history came to be dominated by the cult of “fact.” In response to the hyphen dash question, indeed it is possible the Ibo did not drown themselves in Dunbar creek but rather did fly back to Africa. The slave holder William Mein wrote a letter in which he suggested the slaves rose. In the choice between truth and invention, give me “the” truth.

16 Benjamin Cole June 23, 2017 at 8:45 pm

I hope for a few fat chapters on property zoning….

17 Ricky Tylor June 24, 2017 at 7:33 am

It’s certainly a great work and great to read. I always give priority in reading such masterpiece. I believe we need to have close understanding about economic growth. I manly focus on doing trading and it helps a lot to me through broker like OctaFX who are forever helping me out with doing things due to experts providing day to day market reports plus there are many other benefits too, so l this helps up in working nicely for me in all situations.

18 Bernard Guerrero June 26, 2017 at 2:07 pm

Forget grade inflation, bot inflation (in terms of count) appears to be the hot new thing…

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