Results for “thaler”

68 found

Corruption aside, which is certainly not the case in Sweden, a Nobel committee can:

a) promote a political agenda,

b) further its own reputation, the reputation of the associated prizes, and the reputation of the science under consideration, or

c) criticism minimization, which is close to b) but looks at the left-hand tail of the opinion distribution rather than the mean.

I favor a mix of b) and c), at least for the economics prize; for more detail see my book What Price Fame?

Factor c) decreases the chance of Paul Krugman and also, I am sorry to say, Gordon Tullock, who is more than willing to say what he thinks.  b) decreases the chance of Oliver Hart and many other theorists.  Wilson and Milgrom, whose work has been used to design auctions, stand a better chance.  The work of Hart and Tirole is of very high quality but I am not sure it would add luster to the prize.  How many people can understand it, and has it influenced policy?  And has the work of Paul Romer, and associated ideas of increasing returns, stood the test of time?  If we remove Africa from the data set, the world appears to exhibit growth convergence over time.

I’ve already picked Fama and Thaler as my prediction for this year.  I also think Oliver Williamson is more likely to get it than most top economists think.  Bhagwati fits the bill, but it brings up the awkward question of whether he should be bundled with Krugman (trade theory) or Tullock (rent-seeking).  Keep in mind that the Nobel Committee members are not Harvard-MIT insiders, and they have more of an outsider’s perspective on what is likely to endure.

Greg Mankiw considers what a prize committee should maximize.  Does the prize encourage swinging for "home runs" when more people should be hitting for "singles"?  I don’t think Nobel Prize prospects spur many great contributions to economics in the first place; the best scientists have strong internal and external motivations in any case.  Nobel Prizes do motivate lobbying trips to Sweden; one Harvard economist in particular is well-known for these "vacations." 

I see the welfare-maximizing use of the Nobel Prize as generating more publicity for economics, attracting more people to study the science, and giving the science greater credibility in the eyes of politicians, the public, and media.  That means the committee should give prizes to economists who are articulate, intelligible, scholarly, and work on topics of real world interest.  So far they have done a great job; let’s hope for another first-rate pick.

The Economics prize will be announced October 9.  Here are speculations from last year.  Here are further plausible picks.  Gordon Tullock deserves it.  I predict Eugene Fama and Richard Thaler as deserving co-winners for their work in empirical finance.  Fama will win it for first proving (1972) and then disproving (1992) CAPM, the Capital Asset Pricing Model.  Thaler will win it for developing behavioral finance and a better account of how irrationalities manifest themselves in asset markets.  Kenneth French, a co-author of Fama’s, might be a third pick.  My greatest fear is that they pick Lars Svensson (I believe he is Norwegian, but still that is not a bad name for winning a Swedish prize), and somebody asks me to explain his work.

I believe I have never once predicted this prize correctly.  Last year I said Thomas Schelling, the co-winner with Bob Aumann, deserved the prize but might not ever get it.  What do you all think?

Addendum: Chris Masse points me to bookie odds on the Peace Prize.

The Why Not? guys, Ian Ayres and Barry Nalebuff, have another great idea (Forbes, reg. req.).  Instead of earmarking lottery revenues to education (which is mostly a charade since money is fungible), why not earmark the revenues to private retirement accounts?

A lottery savings ticket would look just like
a lotto ticket, scratch like a lotto ticket, cost a buck and pay out
the same prizes. The only difference would be that half the revenue
would be earmarked for a personal retirement savings account rather
than for education. There would still be about a third for prizes and
the remainder for administering the game.

Setting up a personal retirement account would
be no more difficult than setting up a mutual fund. Players would
receive a swipeable card that would automatically credit a portion of
each losing ticket to the player’s retirement account…

Some 20 million Americans spend at least
$1,000 a year on lottery tickets. For these heavy purchasers the new
tickets would increase their personal savings by $500 a year. Invested
over 40 years, these savings tickets would generate an expected
retirement nest egg of $200,000. This is a lot of money for the mostly
not very prosperous crowd who buy lottery tickets every week.

The biggest defect of the idea is that by lowering the price of lottery tickets it will increase the quantity demanded.  Nevertheless, I don’t think the elasticity is that high and I am confident that savings would go up.

It is incredible that many poor people spend more on lottery tickets than on retirement.  My non-bleeding heart libertarian friend would point out that this shows how much poverty is due to irresponsibility and he would probably be right.

Nevertheless, Adam Smith said the goal of social policy is to create institutions like the market that channel self-interest in ways that redound to the social interest.  Call me a libertarian paternalist, if you must, but I like how lottery savings tickets channel failures of reason and prudence in ways that redound to the individual’s self-interest.

Thanks to Carl Close for the pointer.

Steve Levitt found this list on a blackboard at University of Chicago.  I’m still predicting (as opposed to expecting) Eugene Fama and Richard Thaler for this year’s prize.  Laugh at me when I am wrong, this coming Monday.

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

Books: J. Bradford DeLong: Intermediate Macroeconomics, and Paul Blustein, And the Money Kept Rolling in (and Out)

Real Business Cycles

Stadler, George. “Real Business Cycles,” Journal of Economic Literature, December 1994, 1750-1783.

Long, John B. and Plosser, Charles. “Real Business Cycles,” Journal of Political Economy, 1983, 39-69.

Barsky, Robert and Miron, Jeffrey. “The Seasonal Cycle and the Business Cycle,” Journal of Political Economy, 1989, 503-534.

Prescott-Summers debate, Quarterly Review, Minneapolis Fed., “Theory Ahead of Business Cycle Measurement,” “Some Skeptical Observations on Real Business Cycle Theory,” and “Response to a Skeptic.”

Bils, Mark. “The Cyclical Behavior of Marginal Cost and Price,” American Economic Review, 1987, 838-55.

Romer, Christina. “Changes in Business Cycles,” Journal of Economic Perspectives, Spring 1999, 23-45.

Black, Fischer. “Noise,” Journal of Finance, 1986.

Mehrling, Perry. “Understanding Fischer Black,” you can find this paper at: http://www.econ.barnard.columbia.edu/faculty/mehrling/understanding_fischer_black.pdf

Finance and interest rates

Ross, Stephen. “Finance,” In The New Palgrave, pp.322-336.

Chapters six and seven, “Objects of Choice,” and “Market Equilibrium”.

Jagannathan, Ravi  and McGrattan, Ellen. “The CAPM Debate.” Federal Reserve Bank of Minneapolis,  Fall 1995, 2-17.

Campbell,  John Y. and Vuolteenaho, Tuomo, “Bad Beta, Good Beta,” American Economic Review, December 2004, 1249-1275.

Campbell, John, “Some Lessons for the Yield Curve,” Journal of Economic Perspectives, Summer 1995, 129-152.

Siegel, Jeremy and Thaler, Richard. “The Equity Premium Puzzle,” Journal of Economic Perspectives, Winter 1997, 191-200.

Kocherlakota, Narayana R. “The Equity Premium: It’s Still a Puzzle,” Journal of Economic Literature, March 1996, 42-71.

Lee, Charles, Shleifer, Andrei, and Thaler, Richard. “Anomalies: Closed End Mutual Funds,” Journal of Economic Perspectives, Fall 1990, 153-164.

Keynesian Economics

Cowen, Tyler. “Why Keynesianism Triumphed Or, Could So Many Keynesians Have Been Wrong?”, Critical Review, Summer/Fall 1989, 518-530.

“Symposium: Keynesian Economics Today,” Journal of Economic Perspectives, Winter 1993, 3-82.

“Is There a Core of Practical Macroeconomics That We Should All Believe?” American Economic Review, symposium, May 1997, 230-246.

Taylor, John. “Reassessing Discretionary Fiscal Policy,” Journal of Economic Perspectives, Summer 2000, 21-36.

Bernheim, B. Douglas. “A Neoclassical Perspective on Budget Deficits,” Journal of Economic Perspectives, Spring 1989, 55-72.

Eisner, Robert. “Budget Deficits: Rhetoric and Reality,” Journal of Economic Perspectives, Spring 1989.

Stiglitz, Joseph E. “The Causes and Consequences of the Dependence of Quality on Price.” Journal of Economic Literature, March 1987, 1-48.

Hall, Robert E. “Employment Fluctuations with Equilibrium Wage Stickiness,” American Economic Review, March 2005, 50-65.

Summers, Lawrence. “The Scientific Illusion in Empirical Macroeconomics,” Scandinavian Journal of Economics, 1991, 129-148.

Monetary Policy

Blinder, Alan. “What Central Bankers Can Learn From Academics – and Vice Versa,” Journal of Economic Perspectives, Spring 1997, 3-20.

Bernanke, Ben and Mishkin, F. “Inflation Targeting,” Journal of Economic Perspectives, Spring 1997, 97-117.

Aiyagari, S. Rao, “Deflating the Case for Zero Inflation,” Federal Reserve Bank of Minneapolis, Quarterly Review, Summer 1990, 2-11.

“Symposium on the Monetary Transmission Mechanism,” Journal of Economic Perspectives, Fall 1995, 3-96.

Roberds, William. “What Hath the Fed Wrought? Interest Rate Smoothing in Theory and Practice,” Federal Reserve Bank of Atlanta, Economic Review, January/February 1992.

Shafir, Eldar, Diamond, Peter, and Tversky, Amos. “Money Illusion,” Quarterly Journal of Economics, May 1997, 341-374.

Caplin, Andrew and Spulber, Daniel. “Menu Costs and the Neutrality of Money,” Quarterly Journal of Economics, November 1987, 703-725.

Sargent, Thomas and Wallace, Neil. “Some Unpleasant Monetarist Arithmetic,” Federal Reserve Bank of Minneapolis, Quarterly Review, 1985, 1-17.

Wallace, Neil. “A Legal Restrictions Theory of the Demand for “Money” and the Role of Monetary Policy,” Federal Reserve Bank of Minneapolis Quarterly Review, Winter 1983.

Posen, Adam. “Why Central Bank

Independence Does Not Cause Low Inflation: There is No Institutional Fix for Politics,” in Finance and the International Economy, edited by Richard O’Brien, 1993.

Garrison, Roger, “The Austrian Theory of the Business Cycle,” At  href="http://www.auburn.edu/~garriro/a1abc.htm"

Krugman, Paul. “The Hangover Theory,” at http://www.slate.com/id/9593

Cowen, Tyler. Risk and Business Cycles, chapter three.

Savings and social security

Hubbard, R. Glenn and Skinner, Jonathan. “Assessing the Effectiveness of Savings Incentives.” Journal of Economic Perspectives, Fall 1996, 73-90.

Choi, Laibson, Madrian, and Metrick, “Optimal Defaults,” American Economic Review, May 2003, also at ttp://post.economics.harvard.edu/faculty/laibson/papers/optimaldefaults.pdf

Samwick, Andrew. Voxbaby weblog, read the entries on social security.

International Economics

Current issues: http://www.roubiniglobal.com/archives/2005/05/global_imbalanc.html

“If I Believed in Austrian Business Cycle Theory,” by

Tyler  Cowen, on MarginalRevolution.com.

Brad Setser’s WebLog.

Dornbusch, Rudiger. “Purchasing Power Parity,” in The New Palgrave.

Friedman, Milton. “The Case for Flexible Exchange Rates.” In Essays in Positive Economics, 1953, University Chicago Press.

Mundell-Fleming model, see Brad’s book.

The World

Japan

Krugman, Paul R. “It’s Baaack:

Japan’s Slump and the Return of the Liquidity Trap,” Brookings Papers on Economic Activity, 1998, 29, 2, 137-87.

Kashyap, Anil K. “Sorting out Japan’s Financial Crisis,” Federal Reserve Bank of Chicago Economic Perspectives, 2002, 26, 4, 42-55.

China

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Europe

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Developing Nations

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History

Bordo, Michael D. “Essays in Exploration: A Survey of the Literature,” Explorations in Economic History, 1986, 339-415.

“Symposium: The Great Depression,” Journal of Economic Perspectives, Spring 1993, 3-102.

Romer, Christina H “What Ended the Great Depression?” Journal of Economic History, 1992, 52, 4, 757-84.

Here is a searchable link to Brad DeLong’s website: http://www.j-bradford-delong.net/movable_type/2005-3_archives/000084.html

Imagine Cass Sunstein and Richard Thaler writing a co-authored book review for The New Republic. The book is Michael Lewis’s Moneyball, which pretends to be about baseball but is in fact a profound meditation on behavioral economics, management science, and how hard it is to measure value. An obvious question: if it is so hard to measure the performance of first basemen, when there is a slew of publicly available statistics, how about the rest of the economy?

Thanks to Will Baude for the pointer.