- John Tierney on neuroeconomics.
- Charles Murray on education and IQ: Part I, Part II, Part III.
- John Stossel on the trade deficit.
2) Reactions to Charles Murray's paper by Arnold Kling and Seth Roberts.
3) Promoting Economic Communication by Don Boudreaux:
The economic way of thinking -- to use the title of my favorite textbook -- is essential for grasping the complex reality that we call economy and society. Also essential is clear and compelling communication of economic insights to a broad audience.
Alas, too few good economists have excelled at talking crisply and vividly to non-economists. The great communicators -- Milton Friedman, Walter Williams, Thomas Sowell, Steven Landsburg, Russell Roberts, and (of course) Frederic Bastiat -- are the exceptions.
We here at GMU Economics are doing our share to help remedy the problem: Russ Roberts teaches a graduate seminar each year for students who wish to enhance their skills at translating their economic knowledge into compelling prose.
Another effort underway along these general lines is being sponsored by the Market-Based Management Institute (along with the Association for Private Enterprise Education). Here's the link to their Economic Communication Contest.
I urge students to enter, and professors to alert promising students to this opportunity.
4) Why Economists Are Still Grasping For Cure to Global Poverty by David Wessel (HT Mark Thoma) (emphasis mine)
Economics has made great progress, but it's still waiting for its 'germ theory of disease.'" That probably overstates the challenges remaining to public-health warriors -- avian flu, AIDS/HIV, malaria and all -- but not the shortcomings of economic understanding of what poor countries should do to achieve sustained growth.
Why aren't more poor countries catching up faster?
One view, articulated by Ms. Krueger, is that so-called Third World governments and their First World advisers applied sound economic principles incorrectly or without sufficient attention to the reality. Policies to encourage exports and shield embryonic industries from imports until they got rolling sounded good, for instance, but bred corruption, infantilized industries and created politically powerful vested interests that blocked needed change.
Another view is that poor countries got bad advice and paid the price, but that today's experts know much more than their predecessors. "We don't have recipes, or a checklist," Mr. Edwards says. But, he says, we do know the ingredients: educating workers, accumulating capital and investing it widely, improving productivity. Even he concedes economists are better at dissecting success stories -- China, for one -- and identifying particular reasons for each one's success than generalizing to advise struggling countries what steps to take to boost living standards for the masses.
A third view is that earlier economists focused on the wrong thing. Mr. Johnson, among others, argues that what really matters is having solid political, legal and economic institutions -- courts, central banks, honest bureaucrats, private-property rights -- that allow entrepreneurs to flourish. Imposing what seem to be sound economic policies on corrupt, incompetent or myopic governments is doomed. Building strong institutions is a necessary prerequisite. In this camp, there is a running side argument about which comes first: the institutions or the educated people who create them. Was the Constitution key to U.S. success, or was it Jefferson, Madison and Hamilton?
Technological advances and the spread of markets likely will boost the overall income of the world significantly over the next 25 to 50 years. "But," Mr. Johnson warns, "at least half the world's population will likely not participate fully" -- unless his crowd finds better ways to spread prosperity along with better health to poor countries.
5) Professor Productivity by Richard Florida:
I've always found university rankings to be wanting. In research I conducted years back with Wesley Cohen, an economist at Duke University we, concluded that the only objective measure of quality we could find was faculty productivity.
Now comes this incredibly helpful tool, the "Faculty Scholarly Productivity Index," produced by Academic Analytics and financed by the State University of New York at Stonybrook. The Index rates faculty members' scholarly output at nearly 7,300 doctoral programs around the country, tracking books, journal articles, journal citations, awards, honors, and grants received.
One thing is clear: no one university dominates; indeed, it's surprising what a wide number of universities have leading departments. Have a look here.
6) Solving Social Security With A Stroke of the Pen by Arnold Kling:
With the stroke of a pen, an increase in the age of government dependency for today's young workers would make Social Security and Medicare solvent. If longevity were to hold at current levels, then raising the age of government dependency to somewhere between 72 and 75 probably would eliminate most or all of the surge in entitlement spending projected for later this century. However, because longevity is likely to continue to increase, the age of government dependency needs to be indexed to longevity going forward.
7) A list of Tyler Cowen's articles in the NY Times and Slate.
8) David Altig asks Are We Really Less Dependent On Oil?
The facts are the facts on the fairly dramatic increase in energy efficiency in US production, but if there has been a declining impact on economic activity, that looks like a fairly recent development.
Of course, as I have noted here before, it's possible that the correlation of energy price spikes and recessions in the 70's, 80s, and 90s was just a coincidence. But it's also possible that the run up in energy prices over the past five years has indeed had a significant negative impact on economic activity, despite the fact that the tipping point into recession has not yet arrived. Let's call the effect of energy shocks on the economy an open question.
As for a decline in dependence on foreign oil, it hasn't happened. Here's an updated version of a picture I showed some time ago, capturing energy consumption relative to GDP versus production relative to GDP:
As I wrote in my earlier post:
As we entered the latest series of oil shocks in 2002, energy efficiency -- measured by the quantity of energy usage per inflation-adjusted dollar of GDP -- had fallen significantly from 1970s levels. Energy dependence -- measured by the gap between consumption and production per unit of GDP -- has, on the other hand, remained remarkably constant. That says to me we should not be so quick to dismiss analogies with the situation in the 1970s.
The headline to Professor Goolsbee's article was "A Country Less Dependent on Oil is Free to Make Other New Year's Resolutions." I think maybe we shouldn't change that resolution just yet.
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