Catch it here, edited by Daniel Klein.  It includes a discussion of freedom and economic growth, a critique of Robert Frank on positional goods, possible bias against The Economic Report of the President, economists in Sweden, and what economists believe on rail transit.

From the National Bureau of Economic Research, here is the latest on the J-curve:

The pattern of international trade adjustment is affected by the
continuing international role of the dollar and related evidence on
exchange rate pass-through into prices.  This paper argues that a
depreciation of the dollar would have asymmetric effects on flows
between the United States and its trading partners.  With low exchange
rate pass-through to U.S. import prices and high exchange rate
pass-through to the local prices of countries consuming U.S. exports,
the effect of dollar depreciation on real trade flows is dominated by
an adjustment in U.S. export quantities, which increase as U.S. goods
become cheaper in the rest of the world.  Real U.S. imports are affected
less because U.S. prices are more insulated from exchange rate
movements – pass-through is low and dollar invoicing is high.  In
relation to prices, the effects on the U.S. terms of trade are limited:
U.S. exporters earn the same amount of dollars for each unit shipped
abroad, and U.S. consumers do not encounter more expensive imports.
Movements in dollar exchange rates also affect the international trade
transactions of countries invoicing some of their trade in dollars,
even when these countries are not transacting directly with the United
States.

Here is the paper.  This asymmetry is no accident but rather stems, in large part, from the central role of the dollar as a reserve currency and a medium for invoice pricing.  When an Asian export is priced in terms of dollars in the first place, exchange rate movements lead to less pass-through.  In other words, to the extent we would see an improvement in our trade balance, from dollar depreciation, it would be vis-a-vis the countries with the highest propensity to consume more American exports.  It would not be with the countries whose exports we are most likely to consume.  This also means that we cannot in every way extrapolate European currency experience to the United States.

The lead article in the August 2006 Journal of Political Economy offers the following abstract:

We solve each household’s optimal saving decisions using a life cycle model that incorporates uncertain lifetimes, uninsurable earning and medical expenses, progressive taxation, government transfers, and pension and social security benefits.  With optimal decision rules, we compare, household by household, wealth predictions from the life cycle model using a nationally representative sample.  We find, making use of household-specific earnings histories, that the model accounts for more than 80 percent of the 1992 cross-sectional variation in wealth.  Fewer than 20 percent of households have less wealth than their optimal targets, and the wealth deficit of those who are undersaving is generally small.

In other words, most Americans are saving enough for their retirements.  The authors (John Karl Scholz, Ananth Seshardi, and Surachai Khiatrakun) stress that their data cover only the early 90s, although if anything they believe this biases their estimates downwards by missing out on later capital gains.  Here is the paper.

Notes: This result does not deny that America may face coming demographic problems for funding social programs, most of all Medicare.  But next time you read that "the U.S. savings rate is zero," think back on this blog post and on that paper.

Georgia corporate pilot Bob Smith  has a soaring sideline:
helping couples join the infamous "mile-high club."  For $299, he’ll
take a frisky twosome past 5,280 feet in a Piper Cherokee 6 fitted with
a mattress.  The hour-long [TC: only?] flights out of Carrollton, Ga., (details at milehighatlanta.com) have lured couples from as far as New York.

Here is the full story.  3/4 of the flights are booked by women, and not by male partners.  Not all couples want their names on the certificate, and yes you get to keep the sheets.

Brad does offer some policy recommendations, but he leaves one out.  If one sees the need for a big sectoral shift at home, yuan revaluation is hardly the most direct policy instrument.  China is neither our leading trade partner nor the leading foreign investor in the United States.  It would have to be the case that the dollar is significantly overvalued and that market prices, not just the pegged Asian exchange rates, are all wrong.  There would be a more direct solution: boost taxes on foreign investment in the United States.  The demand for dollar-denominated assets would fall, the value of the U.S. dollar would fall, and the demand for U.S. exports would rise.  (If we are counting only American gdp, note that this tax brings revenue to the American government, unlike yuan revaluation, which raises borrowing costs and puts a burden on Wal-Mart and on the American consumer.)  Voila!

This would put both Alex and Brad in the odd position of believing that we have not enough foreign labor, but too much foreign capital.

I find it hard to accept that conclusion.  And if we had the requisite betting markets, I find it hard to believe that they would (should?) reflect U.S. economic performance as improving, contingent on such a tax hike.

I introduce a new series of posts, titled as above, just to keep you all on your toes.  And by the way, I’ve long wondered if ATM surcharges aren’t taking advantage of a consumer intransitivity of indifference…you don’t mind losing the first fifty cents but…

We estimate a structural model of the market for automatic teller machines (ATMs) in order to evaluate the implications of regulating ATM surcharges on ATM entry and consumer and producer surplus.  We estimate the model using data on firm and consumer locations, and identify the parameters of the model by exploiting a source of local quasi-experimental variation, that the state of Iowa banned ATM surcharges during our sample period while the state of Minnesota did not.  We develop new econometric methods that allow us to estimate the parameters of equilibrium models without computing equilibria.  Monte Carlo evidence shows that the estimator performs well. We find that a ban on ATM surcharges reduces ATM entry by about 12 percent, increases consumer welfare by about 35 percent and lowers producer profits by about 20 percent.  Total welfare remains about the same under regimes that permit or prohibit ATM surcharges and is about 17 percent lower than the surplus maximizing level.  This paper can help shed light on the theoretically ambiguous implications of free entry on consumer and producer welfare for differentiated products industries in general and ATMs in particular.

The core intuition is that a given ATM often has monopoly power ex post, once you are there and need the money.  Lower fees mean fewer machines but that still might be better than facing the mark-up.  Here is the paper, whack it down if you can.

Addendum: Don Boudreaux offers commentary and some whacks.