Mexican money is making a run for the border – the northern border.
Gruma, the world’s largest tortilla company, unveiled plans Friday to build a
major factory in Panorama City, part of a growing influx of Mexican spending in
the U.S. …

From the LA Times.  Thanks to the ever-vigilant Mark Thoma for the link.

Tim Harford, The Undercover Economist, reports:

Rent exhaustion is no economists’ fantasy – go to any place with
rich tourists and poor locals (Dar es Salaam, the first African city I
visited, fits the description nicely), and you’ll see lots of people
waiting for the one generous tip or overpriced taxi fare.  If the
tourists become more generous or gullible, the local guides don’t get
richer, they just multiply.  The bigger paydays become less frequent.

Tyler
Cowen – an economics professor with a popular blog – argues in his
forthcoming book, Discover Your Inner Economist, that for these reasons
you may wish to give money away by wandering around a poor country, far
away from the tourist trail, and handing cash to people who look busy.

Vicious fights over prime begging spots are yet another example of rent exhaustion in this context.  If the begging spot is worth say $50 a year, beggars will devote up to $50 a year to keep the spot.  Here is my previous post on whether you should give money to beggars.

In New Approaches to Ranking Economics Journals (or here) the authors rank journals based on citations from a larger sample of journals than has been used in the past, they distinguish overall journal impact from the impact per article and they break down impact into impact within economics, impact within all of social science, impact within policy and impact outside of economics. 

When impact is measured by citations from journals within economics, journal impact and impact per article are pretty much what you would expect with the AER, QJE, JPE and Econometrica all scoring highly.

Expanding the citation list to all social science, however, has some big effects especially on impact per article.  Most notably, the Journal of Law and Economics has the highest overall impact ranking per article.

Frankly, I was thrilled to see the JLE rank so highly since I have published a number of papers in that journal.  Come to think of it, the latter obviously explains the former!  Note, by the way, that the citation list does not include law journals so if anything the JLEs impact may be under-weighted.

Kudos must also go to Robert Barro, Ed Glaeser and Lawrence Katz, the editors of the Quarterly Journal of Economics, which is the only journal to rank in the top 5 categories no matter how you break down the data.      

Here is a previous post on Great Editors.  Thanks to Healthcare Economist for the pointer.

Here is his long post, his introduction reads as follows:

The question, if I understand is correctly, is whether I
think trade policy–and in particular trade policy which departs from free
trade–can ever do some good in a world where purely political motives and
rent-seeking are rampant.  My answer is
yes, but let me build my case point by point.

Here is one of his closing paragraphs:

…let me note the irony in how a discussion on free
trade among economists quickly ends up being a debate on its politics–that is,
a debate on whether this or that trade policy which on economic grounds is
actually desirable can also be politically feasible.  We are way beyond our area of expertise.  Your
hand-waving is as good as mine.

Here is my original query.  Read his whole response, comments are open, do let us all know what you think…

This paper by Sebastian Edwards sounds about right to me:

In this paper I use historical data to analyze the relationship between crises and growth in Latin America.  I calculate by how much the region’s GDP per capita has been reduced as a consequence of the recurrence of external crises.  I also analyze the determinants of major balance of payments crises.  The main conclusion is that it is unlikely that Latin America will, on average, experience a major improvement in long run growth in the future.  It is possible that some countries will make progress in catching up with the advanced nations.  This, however, will not be the norm; most Latin American countries are likely to fall further behind in relation to the Asian countries and other emerging nations.  Not everything, however, is grim.  My analysis also suggests that fewer Latin America countries will be subject to the type of catastrophic crises that affected the region in the past.  Latin America’s future will be one of "No crises and modest growth."

Here is a non-gated version.

Politics works better in some areas than others.  Fairfax County has wonderful parks, libraries, and schools.  French politics has brought about a good health care system.  There are many other examples.  The mechanisms are various and often involve accident.  Sometimes governments luck into good institutional arrangements.  Sometimes a far-sighted visionary is at work.  Tiebout competition, or efficient Beckerian bargains across interest groups, may kick in.  Sometimes the median voter rules, that median voter is a good judge of outcomes, and what is good for the median is good for the nation as a whole.  Sometimes venal interest groups control politics, yet the desires of those groups happen to coincide with welfare maximization.

We can, in principle, rank policy areas along a spectrum.  Assign a "10" to the most efficient policy-generating areas and assign a "0" to the least efficient.  Don’t worry too much about what the scale means, this is Blog Land.

Where do you put trade restrictions along this scale? 

I give them a 1.5, at best a 2.  I think trade restrictions are hardly ever generated by processes which coincide with the general welfare.  I view trade restrictions as almost always motivated by the classic, crude "diffusion of costs, concentration of benefits"  logic.

If we redefine the problem more broadly, it could be said that trade policy as a whole gets an 8 or a 9.  Most of the wealthier countries, agriculture aside, have fairly free trade, as they ought to.  But what if we focus on evaluating only the quality of the trade restrictions?  How good are the restrictions we get in tracking the ideal welfare-improving restrictions?

I say 1.6438.  That is why I think Bhagwati is essentially correct to be fighting "the last war."  What is your number?

For Nasdaq,
the difference between buy-and-hold and dollar-weighted returns is even
larger. An investor who bought the Nasdaq index in 1973 and sold in
2002 would have earned an average yearly return of 9.6 percent. But the
typical investor in Nasdaq earned only 4.3 percent over this period.
This is true not just in the United States – the same thing occurred in
18 of 19 international markets that Mr. Dichev examined.

That’s Hal Varian, who argues that actively trading investors are excessively swayed by what is in the news, thus earning less than random returns.  If you can’t restrain your trading, at least chuck your newspapers and magazines.