The differences between the most and least productive companies can be startlingly high. By one estimate, in the US alone the most productive firms in a sector can be more than two to four times more cost-effective than the least productive ones. Given the size of those discrepancies, any expansion of trade or innovation that makes […]
It is wonderful to put inefficient firms out of business
It is wonderful to put inefficient firms out of business
31 Aug 2024 1 Comment
in applied price theory, econometerics, economic history, entrepreneurship, history of economic thought, industrial organisation, survivor principle Tags: creative destruction
Fiscal and monetary policy
27 Aug 2024 Leave a comment
in budget deficits, business cycles, econometerics, economic growth, economic history, financial economics, fiscal policy, history of economic thought, inflation targeting, macroeconomics, monetary economics, politics - New Zealand Tags: monetary policy
Over the last few years, The Treasury seems to have been toying with bidding for a more significant role for fiscal policy as a countercyclical stabilisation tool It seemed to start when Covid hubris still held sway – didn’t we do well? – and the first we saw of it in public was at a […]
Fiscal and monetary policy
Roger Pielke Jr. details ‘The Top Five Climate Science Scandals’: Study claiming no ‘climate crisis’ retracted ‘for not for being wrong…but instead for expressing views that are politically unhelpful’
18 Aug 2024 1 Comment
in econometerics, economics of education, energy economics, environmental economics, global warming Tags: climate activists, climate alarmism
What matters is what happens when mistakes are made.
Roger Pielke Jr. details ‘The Top Five Climate Science Scandals’: Study claiming no ‘climate crisis’ retracted ‘for not for being wrong…but instead for expressing views that are politically unhelpful’
Finally, exchange rate models seem to work pretty well
14 Aug 2024 Leave a comment
in budget deficits, business cycles, econometerics, economic history, financial economics, history of economic thought, inflation targeting, macroeconomics, monetary economics, politics - USA Tags: exchange rates, monetary policy
Exchange-rate models fit very well for the U.S. dollar in the 21st century. A “standard” model that includes real interest rates and a measure of expected inflation for the U.S. and the foreign country, the U.S. comprehensive trade balance, and measures of global risk and liquidity demand is well-supported in the data for the U.S. […]
Finally, exchange rate models seem to work pretty well
The Creation of Ride-sharing and the Creativity of Markets
10 Aug 2024 Leave a comment
in applied price theory, econometerics, economic history, economics of regulation, income redistribution, industrial organisation, labour economics, labour supply, law and economics, occupational choice, politics - USA, property rights, Public Choice, public economics, regulation, rentseeking, survivor principle, theory of the firm Tags: barriers to entry, creative destruction, taxi regulation
The idea behind Uber first arose, the story goes, on a snowy evening in Paris back around 2008, when Travis Kalanick and Garrett Camp found themselves stuck in Paris on a snowy evening, unable to find a taxi. They wondered “What if you could request a ride simply by tapping your phone?” They co-founded Uber based…
The Creation of Ride-sharing and the Creativity of Markets
Basic income, again
09 Aug 2024 Leave a comment
in applied price theory, econometerics, labour economics, labour supply, poverty and inequality, unemployment, welfare reform Tags: universal basic income
This week’s column for the Stuff papers covered the excellent new US work testing the effects of a UBI. From November 2020, 3000 low-income people were randomly assigned into two groups for three years. One thousand people each received $1000 per month in unconditional funds for three years. Two thousand people each received $50 per month.Both…
Basic income, again
Frank DiTraglia on how to read econometrics papers
31 Jul 2024 Leave a comment
in econometerics, history of economic thought
Reading economics research papers is hard work when you are doing it for the first time as a graduate student. That’s why I try to get as many undergraduate students as possible engaged in some ‘inspectional reading’ (a term I learned from Marc Bellamare’s book Doing Economics, which I reviewed here), through the Waikato Economics Discussion…
Frank DiTraglia on how to read econometrics papers
The Minimum Wage, Rent Control, and Vacancies or Who Searches?
31 Jul 2024 Leave a comment
in applied price theory, comparative institutional analysis, econometerics, economic history, economics of regulation, income redistribution, labour economics, labour supply, law and economics, minimum wage, politics - USA, property rights, Public Choice, regulation, rentseeking, unemployment, urban economics Tags: housing affordability, regressive left, rent control
In an interesting new paper Federal Reserve economists Marianna Kudlyak, Murat Tasci and Didem Tüzemen look at what happens to job vacancy postings when the minimum wage increases. The vacancy data in our analysis come from the job openings data from the Conference Board as a part of its Help Wanted OnLine (HWOL) data series. […]
The Minimum Wage, Rent Control, and Vacancies or Who Searches?
Current state of knowledge on the Trump tax cuts
25 Jul 2024 Leave a comment
in applied price theory, econometerics, economic history, fiscal policy, macroeconomics, politics - USA, public economics Tags: taxation and entrepreneurship, taxation and investment
That is the topic of my latest Bloomberg column. Here is one summary excerpt: One result: Total tangible corporate investment went up by about 11%. That has been a welcome shot in the arm for an economy that was by some measures suffering from an investment drought. The strong state of the Biden economy may, in…
Current state of knowledge on the Trump tax cuts
The employment effects of a guaranteed income
23 Jul 2024 Leave a comment
in applied price theory, econometerics, human capital, labour economics, labour supply, occupational choice, poverty and inequality Tags: basic income
By Eva Vivalt, Elizabeth Rhodes, Alexander W. Bartik, David E. Broockman, Sarah Miller, Here is the link, but I am still sleeping. Here is the abstract: We study the causal impacts of income on a rich array of employment outcomes, leveraging an experiment in which 1,000 low-income individuals were randomized into receiving $1,000 per month […]
The employment effects of a guaranteed income
Ignore the polls, prediction markets have Trump at 66% chance of winning the election
16 Jul 2024 Leave a comment
in econometerics, politics - USA Tags: 2024 presidential election
CNN Interview of Rutgers Statistics professor, Harry Crane. Below are graphs of the prices of a Trump, Biden, and Harris futures contracts that pays out $1 if they become President. In the last day, the Trump contract has increased by 6¢, indicating a 6% increase in President Trump’s election chances. The blue bars indicate the…
Ignore the polls, prediction markets have Trump at 66% chance of winning the election
Zoning Matters for Rising Housing Costs, Especially After 1980
11 Jul 2024 Leave a comment
in applied price theory, econometerics, economic history, economics of regulation, environmental economics, income redistribution, Public Choice, rentseeking, urban economics Tags: housing affordability, land supply, zoning
From a new working paper “The Price of Housing in the United States, 1890-2006” by Ronan C. Lyons, Allison Shertzer, Rowena Gray & David N. Agorastos (emphasis added): “Zoning was adopted by almost every city in our sample during the 1920s. We see a slightly steeper gradient over the next two periods (coefficients of .48 […]
Zoning Matters for Rising Housing Costs, Especially After 1980
Needed in Empirical Social Science: Numbers
29 Jun 2024 Leave a comment
in econometerics, history of economic thought
By Aaron S. Edlin and Michael Love: Knowing the magnitude and standard error of an empirical estimate is much more important than simply knowing the estimate’s sign and whether it is statistically significant. Yet, we find that even in top journals, when empirical social scientists choose their headline results – the results they put in […]
Needed in Empirical Social Science: Numbers
More impatient people are more likely to commit crime
09 Jun 2024 Leave a comment
in applied price theory, econometerics, economics of crime, economics of education, labour economics, law and economics, occupational choice Tags: cognitive psychology, crime and punishment, criminal deterrence, law and order
Gary Becker’s famous model of rational crime suggests that criminals weigh up the costs and benefits of crime (and engage in a criminal act if the benefits outweigh the costs). Time preferences matter in this model, because the benefits of a criminal act are usually realised immediately, whereas the greatest costs (including the penalties of…
More impatient people are more likely to commit crime
How we know that the sun changes climate (II). The present
06 Jun 2024 Leave a comment
in econometerics, economics of natural disasters, energy economics, environmental economics, global warming Tags: climate alarmism
by Javier Vinós Part 2 of a 3-part series. Part I is here. The effect of the Sun on climate has been debated for 200 years. The basic problem is that when we study the past, we observe strong climatic changes associated with prolonged periods of low solar activity, but when we observe the present, […]
How we know that the sun changes climate (II). The present
Utopia, you are standing in it! 
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