Economics Roundtable

On Sunday, the US hit the debt limit, triggering the Treasury to engage in “extraordinary measures” to keep the government paying its bills.

The ensuing debate could go one of two ways. We saw the bad way in August 2011. Congress held the debt limit for ransom in exchange for deficit ...

What do people mean when they say that the government is not nearly as good as the market at allocating scarce resources? A story from today’s New York Times offers an anecdote from Obamacare:

The Obama administration said Monday that it was cutting payments to doctors and hospitals after ...

According to US Senate investigators, Apple paid no corporate income tax to any national government on $74 billion in overseas income from foreign units over the past four years. Two key points: First, investigators found no evidence Apple did anything illegal. Second, Apple concedes the entities didn’t pay corporate ...

The foolish do the best in a strong market

“The trend is your friend, until the bend at the end.”  So the saying goes for those that blindly follow momentum.  The same is true for some amateur investors that run concentrated portfolios, and happen to get it right for a while, ...

Does pre-tax inequality matter? I ask because of a dispute between Aditya and Tim. Aditya says that inequality is back at 1920s levels - which is true if we consider the share of the richest 1% - to which Tim replies that the relevant ...

Every investigative journalist occasionally dreams of what she might be able to do with monster resources and subpoena power. The answer looks something like Carl Levin, whose latest report on Apple’s tax strategies is Pulitzer-worthy stuff. When Apple CEO Tim Cook testifies in front of Levin today, ...

I've written before about the solution to the invasive species--find/create value for the invader, then let human nature take over and the tragedy of the commons will eradicate the unwanted visitors. Or, you could just rely on completely insane people...

What would you do if you came ...

游客对世界文化遗产保护资金支
付意愿的研究

U.S. home values continued to climb in April, increasing 0.5 percent from March to $158,300, according to the April Zillow Real Estate Market Reports. Home values were up 5.2 percent year-over-year, marking the ...

Advances in Portfolio Risk Control: Risk! Parity?
Winfried G. Hallerbach (Robeco) | May 1, 2013
Spurred by the increased interest in applying “risk control” techniques in an asset allocation context, we offer a practitioner’s review of techniques that have been newly proposed or revived from academic history. We discuss ...

In response to this post, Paul Krugman writes:

Suppose that I could wave a magic wand (or play a few notes on a a Magic Flute) and suddenly increase all German wages by 20 percent. What do you think would happen to the value of the euro against the ...

Daniel Klein of George Mason University has conducted one of the broadest studies with the Google search engine…On the subject of individualization, he found that the word “preferences” was barely used until about 1930, but usage has surged since. On the general subject of demoralization, he finds a long ...

… is from page 227 of Thomas Sowell’s magnificent 1980 volume, Knowledge and Decisions (original emphasis):

When all else fails, believers in this vision [of market economies as systems of exploitation] point to specific activities by capitalist nations that have behaved in ways that are regarded as morally wrong.  Whatever the merits ...

Professor Karlson brings us the story of what happened to a University of Illinois chancellor who resigned following a scandal.�

(I would amend the professor's suggestion a little. If scandal-ridden administrators must be returned to the university to "teach," then let them teach three sections a semester of Freshman ...

Brown seems to be the winner.

(I'll use this as an excuse to note that one of my formers colleagues told me about a popular cheer at Brown: "What's the color of shit? Brown, brown, brown!")

�

Since we last looked at the S&P 500's expected trailing twelve-month earnings per share some three months ago, the future for the S&P 500's forecast earnings has become considerably brighter going forward. Which is good, because it also suggests that the U.S. economy ...

According to the CBO, under the President’s budget, the deficit hovers around 2% of GDP, and debt-to-GDP stabilizes through 2023 at levels lower than today’s.

In a positive sign of improvement in credit conditions for America’s small and medium-sized companies, the chart above displays the significant decreases over the last three years in the delinquency rates and charge-off rates for business loans at all U.S. commercial ...

We are, as they say, live:

The Unemployed Need Bold, Creative Moves from the Fed

I'm not as happy with the Fed as I could be.

The chart above is based on data from the Department of Education for bachelor’s degrees by academic discipline and the sex of the graduating students for the college class of 2011 (most recent year available). Here are some observations:

1. ...

I did an interview with James Stafford of OilPrice.com:

Energy and Economic Growth

It covers a few other topics as well.

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com.

American companies have gotten the message from the market: borrow as much ...

Do public employees have greater job security? And if so, how much is it worth?

As part of my broader work on public sector pay, I’ve looked at whether public employees have greater job security than private sector workers and how this job security should be counted into public–private pay comparisons. ...

...in Detroit

Here is striking photo of a pile of by-product of processing Canadian tar sands oil, from NY Times:

As we endure the slow, uneven recovery from the “Great Recession,” there is ...

I LOVE the history of the shipping container. Nothing could be more confounding to our usual ideas about innovation, stagnation, and technology.

Imagine for a moment that you're standing on the docks at a major port in the early 1950s. You see some evidence of technological progress around you: mechanical cranes ...

TODAY'S recommended economics writing:

• Do big cities help college graduates find better jobs? (Liberty Street)

• Do peer effects have inegalitarian implications? (Marginal Revolution)

• Boom or bubble? (New Yorker)

•�The liquidationist urge (Paul Krugman)

• The biggest mistake 60-year old men make about the economy (Atlantic)

• The ...

One has to pity Ben Bernanke during the remainder of his tenure as head of the Federal Reserve, which is due to terminate in January 2014. For his bold experimentation with unorthodox monetary policy has not worked out quite the way he had anticipated. And this puts him in a ...

Several of my colleagues on the Harvard faculty have recently been casualties in the cross-fire between fiscal austerians and stimulators.   Economists Carmen Reinhart and Ken Rogoff have received an unbelievable amount of press attention, ever since they were discovered by three researchers at the University of Massachusetts to have ...

Jeff Frankel says:

�... Alberto Alesina�has not been receiving his “fair share of abuse.”� His influential papers with�Roberto Perotti��(1995,�1997) and�Silvia Ardagna�(1998,�2010)�found�that cutting government spending is�not�contractionary and that it may even be expansionary ...

More here.

Ezra Klein links to a New York Federal Reserve Bank study that shows that few college graduates are working in a field related to their major:

Here’s some�interesting new data�from the Federal Reserve Bank of New York. ...

You will find it here, at MRUniversity.com.  We have recorded videos covering, annotating, and explaining every single chapter of Smith’s masterwork Wealth of Nations, along with some coverage of surrounding historical material.  Having to explain a book “along the way” is a very interesting way to read, and ...

From Christopher Weaver and Anna Wilde Mathews:

Employers are increasingly recognizing they may be able to avoid certain penalties under the federal health law by offering very limited plans that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held expectation that the law would ...

Fashion models are almost twice as likely to get their visas as computer programmers, by one rough measure.

Here is more, and for the pointer I thank Andrew Rowe.

Any policy in place on March 23, 2010, the day health reform was enacted, falls ...

From today’s WSJ editorial “Red Tape Record Breakers“:

“For two decades, Wayne Crews of the Competitive Enterprise Institute has tracked the growth of new federal regulations. In his 20th anniversary edition to be released tomorrow, he’ll report [the following] ...

From today’s WSJ editorial “Red Tape Record Breakers“:

“For two decades, Wayne Crews of the Competitive Enterprise Institute has tracked the growth of new federal regulations. In his 20th anniversary edition to be released tomorrow, he’ll report [the following] ...

James Kwak:

Liberty for�Whom?, by James Kwak: ...Corey Robin's fascinating article�on nineteenth-century European culture, Nietzsche, and the economic philosophy of Friedrich Hayek..., in very simplified form, goes like this. For Nietzsche, and for other cultural elitists of late-nineteenth-century Europe, both the rise of the bourgeoisie and the specter of the ...

Mr. Tyler’s entire home was only 78 square feet. And while his “Midtown mansion,” as he called it, was a far cry from the lavish town homes and shimmering penthouses that have spawned a thousand lustful television shows, a video tour posted on YouTube of Mr. Tyler’s little room ...

When Nerds Double Down: The Economics of Star Trek... originally appeared on About.com Economics on Monday, May 20th, 2013 at 12:51:14.

Permalink | Comment |

In nominal terms, the Dow Jones industrial average is up about 30% since January of 2000. Adjusted for inflation, however, it’s more or less flat. To me, that back-of-the-envelope calculation hints that the Fed’s quantitative easing has not created some sort of dangerous stock market bubble.

First Trust’s Brian Wesbury and ...

In my weekly National Review column out today, I wrote about the really great commencement speech Fed Chairman Ben Bernanke gave over the weekend at Bard College at Simon’s Rock. It was a gentle counter to the much-discussed “new normal” stagnationist arguments put forward by economists such as ...

A recent�Free exchange column�discusses the European Central Bank's troubles in providing support to peripheral economies (summary�here). We are inviting experts in the field to comment on the piece and related research. Michael McMahon, a macroeconomist at the University of Warwick commented�here. Gilles Moec, co-head of European economic ...

Amidst all the positivity coming out of Yahoo and Tumblr, any self-respecting pundit is going to want to pour cold water on the whole deal. Especially since billion-dollar mergers almost never work out very well. But here’s the weird thing: the more I look at this tie-up, the more ...

Here’s a letter to the Wall Street Journal:

Gordon Crovitz reports that Pres. Obama’s “longtime adviser David Axelrod last week blamed a too-big government for the scandals: ‘Part of being president is that there’s so much beneath you that you can’t know because the government is so vast’” (“Big Government Loses ...

A 2010 jetties study from the legislature found the cost of building jetties from $3.5 million and $10 million, and that up to another $2 million would be spent every year for maintenance that included replacing sand washed away from ...

Travel on all roads and streets changed by -1.5% (-3.7 billion vehicle miles) for March 2013 as compared with March 2012. Travel for the month is estimated to be 248.8 billion vehicle miles.

The US economy slowed in April for the second time in as many months, “led by declines in production-related indicators, according to today’s release of the Chicago Fed National Activity Index, a weighted average of 85 economic data sets. But the deterioration has yet to make a conspicuous dent ...

1. Does parenting suffer from a cost-disease?

2. Ezra Klein interviews Bill Gates about public health and development.  Excellent piece.  Gates, by the way, is now the world’s richest man once again.

3. College enrollment is falling more than had been expected.

4. “The french fries arrive soggy.”

5. ...

A family can get implicitly taxed 238% on that additional $501.

The thing is, I don’t even need to tell you what the topic is.  The original source is here.

The most expensive hospital in America is not set amid the swaying palm trees of Beverly Hills or the luxury townhouses of New York’s Upper East Side.

It is in a faded blue-collar town 11 miles from Midtown Manhattan.

Based on the bills it submits to Medicare, the Bayonne Medical ...

What Tyler calls a liquidity leak, I call markets at work. The ECB provides enough stimulus to get all of the Eurozone going but it all leaks to Germany. Fine. The German market heats up. German wages and rents rise. Retired German doctors start considering the virtues of a flat in Lisbon ...

1. T. J. Clark, Picasso and Truth: From Cubism to Guernica.  I guess I had to read this one, but it did deliver as I had promised.  Excellent color plates, and overall a very good book (the best?) on what makes Picasso special.

2. C.P. Snow, Variety of ...

1. Memoir of an internet troll.

2. Photo of Iceland, via GH.

3. Restrictions on doctor-owned hospitals.

4. How Laura and John Arnold wish to give away their money (recommended, and cameo by Steve Levitt).

5. “…the Colorado cannabis industry is purely cash-based…”  You also can take on-line classes ...

Natasha and I have finished watching the first season, and I am pleased to report it is one of the few TV series I like.  It pretends to be about “two Soviet KGB officers posing as an American married couple in the suburbs of Washington D.C. in order to ...

They’re signing up as we speak for a two-year degree course in heavy metal music (believed to be the first of its kind), which begins in September in a college in Nottingham.

…The degree organisers are loftily talking up the course by using terms such as “culture” and “context”. They point ...

So far this is the must-see movie of the year, directed by Sarah Polley, Wikipedia entry here, and yes it has plenty of social science.  Descriptions involve spoilers, so I will desist.  If you’ve already seen the film read this to be clued in.

For jazz players, there is a negative relationship between earnings and having a BFA or a MFA.

The quotation is from here (pdf), the original source is Thomas M. Smith, pdf of the underlying paper here.  There are other interesting results in this paper as well.  Do note that ...

Will Hutton writes:

At least Summers sees some underlying economic dynamism. For techno-pessimists such as economist Professor Tyler Cowen the future is even darker. It is not only that automation and robotisation are coming, but that there are no new worthwhile transformational technologies for them to automate. All the obvious ...

The web site reads:

On May 8th, 2013, the federal government released data on list prices and medicare reimbursements for the 100 most common procedures at over 3,300 hospitals.

This tool allows users to easily search and compare hospital charges.

As reported by the excellent Carola Binder:

Personally, what are the two most important issues you are facing at the moment? 

This question was only asked in May 2012. For the EU as a whole, by far the most common response was rising prices/inflation. In fact, 45% of people in 2012 ...

By now it is well known that hanging out with healthy peers predicts (causes?) good health, and unhealthy peers predict (cause?) bad health, for instance as it applies to weight and diet.  So what might that mean?

But perhaps medical care should indeed be given preferentially to those who, in receiving ...

1. Ryan Avent on liquidity leaks, Paul Krugman also.

2. Some positive results on microcredit.

3. Some not very surprising claims about Joseph Beuys.  I am still waiting for a good book about the massive influence of Rudolf Steiner.

4. Where is the euro breaking point?

5. Is ...

… is from page 129 of Arthur Ekirch’s important (if deeply flawed in places) 1974 volume, Progressivism in America:

An aristocrat who scorned the plutocracy of new-rich money grubbers, T.R. [Teddy Roosevelt] was also a bureaucrat who valued government or military service as opposed to a career in industry or banking. ...

This week’s EconTalk is Richard Epstein talking about the Constitution. My first question:

How has the role of the Constitution changed in the United States since the founding? How has our understanding of it evolved, good and bad? And that, of course, we could spend 7 or 8 hours on, but ...

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) decreased to –0.53 in April from –0.23 in March. Three of the four broad categories of indicators ...

Japan's stock market is on a roll, largely because expectations have dramatically changed this year about the underlying state of macro for the planet's third-largest economy. The iShares MSCI Japan Index ETF (EWJ) is up a potent 24% year-to-date. That's a substantial premium over the 18% gain for US ...

By James Kwak

I feel like I should have something deep and original to say about Corey Robin’s fascinating article on nineteenth-century European culture, Nietzsche, and the economic philosophy of Friedrich Hayek. In addition to the things I’m better known for, I studied European intellectual history at Berkeley, with ...

A McKinsey study finds, "While the young people are qualified—even overqualified, in many cases—to enter the workplace, most of them feel ill-suited to tackle the harsh realities of an evolving job market."

One thing that might help is for schools to offer a lot more career information: "career day" ...

I came across this reminder of one of the Left's patented Who-Cares-About-the-Facts-It-Would-Be-So-Nice-If-T
his-Were-True episodes. Mr. Bellesiles is still an adjunct at Central Connecticut State University--note to the kids: stay away from there, or at least don't major in history there--and he also tends bar.�

While he enjoys making drinks, perhaps ...

Barry Snell, senior at Iowa State. (Link via Instapundit.)

Gun people don’t trust anti-gun people because anti-gunners always talk about�90 percent�of Americans supporting this gun control measure, or 65 percent supporting that one, as if a majority opinion is what truly matters in America. We don’t ...

Almost every high school in the country should be showing this.

This, too: "Swarthmore Spinning Out of Control (With Videos)". And the president of Swarthmore's completely inadequate reply.�

To paraphrase a famous outcry: Have you no shame? At long last, have you no shame? (And bragging about it is an especially nice touch.)

"Rich Manhattan moms hire handicapped tour guides so kids can cut lines at Disney World".

Nancy Pelosi apparently has one:

"Many of the initiatives that he passed are what are coming to bear now, including the Affordable Care Act," Pelosi said in an interview with MSNBC's Chris Hayes. "The Affordable Care Act is bringing the cost of health care in our country down in ...

Insanity, or hope?�It might not be easy to tell.�

(But remember Newmark's Law of Al: bet on Big Al and give the points.)

"English Soccer Team Saves A Penalty Kick, Immediately Scores A Game-Winning Goal In An Insane Ending".

More: "This Is The Most Epic Finish To A Sporting Event So Far In 2013".

Made me smile.

This is probably�the point at which I should mention grandparents. Those in their 20s and 30s today have the experience of knowing and, usually, loving their grandparents for most or all of their adult lives. Today, college graduations, weddings, 30th birthday parties, Christenings, brises — these ...

Tell me you would have guessed this. I wouldn't have.

Sweden is viewed as an egalitarian utopia by outsiders, but reality is complex. In some ways Sweden has less social equality than the United States. While the American upper class is largely meritocratic, the upper class in Sweden are ...

Avenues: the World School. $43,000 per year.�

What does that money buy you? This, for instance:

Last winter,�a group of Avenues 4-year-olds ventured out to the 532 Gallery Thomas Jaeckel in Chelsea to view the work of John A. Parks, an English painter, who fingerpainted his childhood memories. Schulman thought ...

Interesting hypothesis. It needs a Ph.D. student in sociology in search of a thesis topic. (Link via Instapundit.)

But there’s actually something a bit more puzzling about the campus-rape panic. College campuses are far from a threatening environment for feminists. Nowadays women outnumber men in every department ...

Kid's got rhythm to spare.

(Link via Michael Greenspan.)

But the 2-year-old singing Pearl Jam is in a whole different category.�

You choose.

Poutine-flavored soda.

"This is an algorithmically-generated non-analytical map of the musical genre-space."

So if you need to know the difference between "atmospheric black metal" and "viking metal" or between "southern hip hop" and "dirty south rap" this may be the place for you.�

I hadn't heard this before.

Clark Kerr, first chancellor of UC Berkeley, once said that the ideal university provided�"sex for the students, sports for the alumni, and parking for the faculty."�

If you have a strong stomach, I recommend Heather McDonald's look at rent-seeking par excellence at the Univ. ...

By Sir Martin Rees:

Scientific forecasters have a dismal record. One of my predecessors as Astronomer Royal said, as late as the Fifties, that space travel was “utter bilge”. Few in the mid-20th century envisaged the transformative impact of the silicon chip or the double helix. The iPhone would ...

Almost every week there is some new awful risk the media warn us of, awful because the sellers are "unregulated". Two examples;

"Wild, unregulated hacker currency bitcoin getting close to mainstream". (I'll admit "wild" is a nice touch.)

"Think Those Chemicals Have Been Tested?"

Unlike pharmaceuticals or pesticides, industrial ...

You have to admit - we were right. Last week was indeed a big week for the S&P 500!

From Monday, 13 May 2013 to Friday, 17 May 2013, the S&P 500 rose by nearly 2%, or 32.35 points, from 1630.77 to a ...

Richard Epstein of New York University and Stanford University's Hoover Institution talks with EconTalk host Russ Roberts about the U.S. Constitution. Topics covered in this wide-ranging conversation include how the interpretation of the Constitution has changed over time, the relationship between state and federal power, ...

Greg Mankiw has a talent for cutting to the chase when it comes to observations of macro and finance and he doesn't disappoint in his latest NY Times column, which summarizes his view on how to answer the question: What stocks should I buy? The Harvard professor explains that ...

(p. 76) After going from room to room, skipping none except the garage (that would be a project in itself), we arrived at a total of 6,000 varieties of things in our house. Since we have multiple examples of some varieties, such as books, CDs, paper plates, spoons, ...

Sunday, May 19, 2013, was one of the saddest and most notorious moments in the sordid history of the federal budget.

Let's start from the beginning.

It's December 2012 and House Republicans are facing a number of politically very difficult and unpalatable choices because taxes will go up automatically on January 1, ...

Germany’s vice-chancellor and economy minister put Berlin on a collision course with Brussels by warning that ...

Don't say you weren't warned. This is Paul Krugman, just a few days under 10 years ago:

Stating the Obvious, by Paul Krugman, Commentary, NY Times, May 27, 2003: "The lunatics are now in charge of the asylum." So wrote the normally staid Financial Times, traditionally the voice of solid ...

It’s tragic that Cooper Union has decided to start charging tuition. The fateful announcement was made by Mark Epstein, the self-aggrandizing chairman of the board of trustees, and was greeted with dismay by thousands of Cooper students, faculty, alumni, and friends.

It’s the trustees who are in charge ...