New history of economic thought blog
What could be a better name than AdamSmithLives? The writer is Sandra Peart, professor of economics at Baldwin-Wallace College and sometimes visitor at George Mason. My colleague David Levy will be guilted into contributing as well. Here is a post on exaggerated reporting about New Orleans, and its parallels in the history of economic thought. Here is the mission statement. Welcome to the blogosphere!
More Nobel Prize ideas
1. Nobel prize in environmental economics to Weitzman, Nordhaus
2. Nobel prize in trade theory to Bhagwatti and Dixit
3. Nobel prize in President Bush praising to Krugman and David Brooks
4. Nobel prize in behavioral stuff to Richard Thaler
5. Nobel prize in contracts to Hart, Holmstrom, and Oliver Williamson
6. Nobel prize in development economics to Dasgupta and Deaton
7. Nobel prize in finance to Fama
8. Nobel Price in mechanism design to Milgrom, Myerson and Maskin
9. Nobel prize in family economics to Mincer and Pollak
10. Prize in Political Economy to Alesina, Persson and Tabellini
11. Prize in Modern Macro to Barro and Sargent
More sexual Giffen goods
These demand curves are the exception rather than the rule, but nonetheless they appear to exist:
One sex worker…explained why she no longer offered her favorite clients free sex or cheaper rates: "They pretend to be flattered, but they never come back!…There was one client I had who was so sexy, a tai-chi practitioner, and really fun to ****. Since good sex is a rare thing, I told him I’d see him for $20 (my normal rate is $250). Another guy, he was so sexy, I told him "**** for free." Both of them freaked out and never returned…They don’t believe they can have no-strings-attached sex, which is why they pay. They’d rather pay than get it for free."
That is from The Purchase of Intimacy, by Viviana Zelizer. I take the main point of this book to be yes you can love your prostitute and perhaps you can like your maid as well. A commercial transaction is compatible with holding deeper feelings for the other party.
Here is a Richard Epstein review of the book. I liked the book, but it is sad that the current debate needs such a tract. Here is my previous post on Giffen goods.
My macro class has been asking me what kind of exam they can expect
Try this question:
"Simon Grant and John Quiggin argue that taking the equity premium seriously–-the well-known fact that the average annual historical return of stocks is seven times that of government bonds and other debt-–has many implications, the most robust of which is that recessions are extremely costly even if they don’t lower average consumption and that macroeconomic stabilization policies are more important than has been thought."
True or false, and why? Under what conditions is your answer wrong (always the proper query)? Here is a relevant link, though registration is required.
Why you buy insurance
I won’t call Bryan Caplan stupid:
By way of analogy, consider these two scenarios:
1. You lose $1000 in some unforeseen way.
2. You lose $1000 in a way your spouse specifically warned you might happen.
The man needs some voodoo flags. In the meantime, here is a testimony to Bryan’s wisdom. And scroll down Econolog to read the whole discussion.
Brad DeLong, polytheist
Ever since the Mexican peso crisis of 1994-1995, I have been well aware that the Gods of the Dismal Science are cruel and capricious, at times punishing small sins against them with disproportionate retribution.
Here is the full post. Here are a few of my voodoo flags. Here are two more. Here is my favorite.
Opportunity cost
Visits to hospital emergency rooms in Boston plummeted during the city’s most nail-biting sports moments, according to a group of local doctors.
The team found that visits went down to as little as 80% of the average for the key Boston Red Sox games that attracted the most TV viewers. But ER visits rose above the average for games that had fewer viewers.
Is it safer to be watching TV, or do people with emergencies simply wait? Here is the link.
What happened to the Orange Revolution?
Remember the democratization of the Ukraine? Anders Aslund offers a sorry update:
For the past eight months…Ukraine’s economic policy has been nothing short of disastrous. Economic growth has plummeted from an annual 12 per cent last year to 2.8 per cent so far this year, driven by a fall in Âinvestment.
The blame for this startling deterioration must lie with the government’s economic policies. By agitating for widespread nationalisation and renewed sales of privatised companies, the government undermined property rights. In addition, it raised the tax burden sharply to finance huge increases in welfare spending and public wages. Very publicly, Ms Tymoshenko interfered in pricing and property disputes, criticising individual businessmen. Chaos and uncertainty prevailed. This populist policy had little in common with the electoral promises of Viktor Yushchenko, the president, about liberal market reforms.
There is much more, read the whole thing.
Check out the new economics podcasts
There are more economist interviews up at Radioeconomics, in convenient podcast format. New offerings include Becker, Posner, Boudreaux, John Palmer, Craig Newmark, James Hamilton, and others.
New Brazilian economics blog
Portuguese is my favorite language to hear sung. I cannot read it, but here is a new Brazilian economics blog, degustibusblog.net. At the very least I know the authors like me. If you insist on something Brazilian in English, do not forget Eduardo Giannetti’s much underrated The Lies We Live By: The Art of Self-Deception. Heading back to Portuguese, here is a classical liberal site, thanks to Tom Palmer for the pointer.
Michael Flynn does not think the singularity is near
Tyler,
I must admit my amusement at finding that Ray’s [Kurzweil] new book still has no e-format.
Sure, we’re gonna get uploaded — but I hope our bionic fingers are
dextrous enough to turn the pages.
Here is my previous post on the nearness of the singularity.
Markets in everything: putting the homeless to work
It is called Bumvertising.
Bumvertising™, or the use of sign holding vagrants to advertise, is a development of PokerFaceBook.com’s
most recent advertising campaign. Homeless men are able to provide a
valuable and tangible service to a company, while receiving an
additional revenue stream in combination with their normal donations
from begging.
Here is a photo gallery of ads. Here is the company’s "economic analysis" of the practice. Here is some nasty language directed against the founders. And it seems you pay the bums with barter:
Through his own effort and the assistance of his marketing team, Mr.
Rogovy developed signs and accumulated the resources that most bums
would find attractive. Money, sandwiches, chips, apples, water, and
other beverages have all been dispensed in order to compensate the
homeless in the Seattle Bumvertising™ campaign.
I have no direct information on how real this practice is, or if it violates minimum wage laws, but the web site appears legitimate. Thanks to Curt Gardner for the pointer. Comments are open if you know more.
Markets and morals
Markets are indifferent to our love. That is why the emotions we feel toward the market are often perceived as negative. She never reciprocates. Worse, she is indifferent.
That is Kevin Depew, from Victor Niederhoffer’s investment site, which Victor describes as "enterprise-oriented." Here is Victor playing squash. Here is a Victor Niederhoffer quotation. Here is Victor on chess, I once gave him knight odds and he beat me.
Recipes for social change
I think the smart thing for the US state department to do today is build a game about Islam but make it a democracy. And set it up so that every 16-year-old from Morocco to Pakistan can go into that world when they get a computer. Not say anything overt about democracy but have them play — have them vote, for example.
I saw this quotation on the ever-excellent kottke.org. Here is his source, on video game economics. Here is the source interview, worth a read. Here is Edward Castronova’s forthcoming book on video game economics.
Addendum: Speaking of kottke.org, they offer a good link on what makes shy people shy, and can they change?
Second addendum: A reader draws my attention to this rather grisly video game.
Blog post headline of the day
"Is it Gouging if Politicians Charge $1000 for Meal?"
That is Michael Giberson, here is the post.