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Tag Archives: Growth: Causal Factors

Realistic Reforming: Micheal Tanner’s Inclusive Economy, Part 2

Editor’s note: The first part of this review of Michael Tanner’s The Inclusive Economy appeared earlier at Econlog. The reviewer noted that “Tanner’s deep familiarity with the literature truly shines in his chapters on the policy program he recommends. After laying out the failure of redistributive policies, Tanner suggests criminal justice reform and ending the war on drugs; education choice; elimination of zoning and land-use regulation and reduction of property...

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The True CPI Just Jumped

I recently voiced fear of coming inflation.  Yet on reflection, high inflation is already here.  While measured inflation remains low, I’ve been arguing for years that CPI bias heavily distorts official measures.  My point has always been that official measures of inflation are too high, because official measures fail to properly account for rising quality and variety of goods.  In the last month, however, all this has suddenly reversed.  Due to the coronavirus,...

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The Problem of Aggregating Capital

In my recent critique of Paul Romer’s attack on Joan Robinson, I pointed out that Romer was wrong. Even Paul Samuelson admitted that Robinson had won the Cambridge-Cambridge debate. One of the big issues is whether you can aggregate capital. You can’t. But that hasn’t stopped economists from trying. One commenter, Thaomas, says: The Capital controversy is just the index number problem in other guise.  There is not [sic] perfect way to aggregate prices and yet...

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Did Paul Romer Just Call for a Witch Hunt?

The alternative is to make honesty and humility prerequisites for membership in the community of economists. The easy part is to challenge the pretenders. The hard part is to say no when government officials look to economists for an answer to a normative question. Scientific authority never conveys moral authority. No economist has a privileged insight into questions of right and wrong, and none deserves a special say in fundamental decisions about how society...

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Yes, the system is rigged. But how?

The Atlantic has a recent piece on how the optometrist industry is rigged against consumers: In every other country in which I’ve lived—Germany and Britain, France and Italy—it is far easier to buy glasses or contact lenses than it is here. In those countries, as in Peru, you can simply walk into an optician’s store and ask an employee to give you an eye test, likely free of charge. If you already know your strength, you can just tell them what you want. You can also...

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Garett Jones on Open Borders: A Belated Reply

Last November, Garett Jones wrote two responses to my Open Borders.  The first was “Measuring the Sacrifice of Open Borders,” a short paper on the distributional effects of free migration.  I replied here. Soon afterward, however, Garett also wrote me this open letter.  Since I didn’t want to hastily respond to serious criticism, I waited until I had time to carefully respond.  Now I’m ready.  Here’s my point-by-point response.  This format works especially well...

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Some Recollections about G. Warren Nutter

At the midcentury mark, economist G. Warren Nutter (1923–79) provided one of the lone dissenting voices to challenge what had become a matter of conventional wisdom among Sovietologists. Whereas others perceived vibrancy and vitality in the socialist society’s industrial growth, Nutter recognized its long-term economic decline concealed behind a politically crafted veneer of propaganda about socialist industrial prowess. From 1956 onward, he labored on providing a...

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Is the Fall of Unemployment Good?

Is it good news or bad news that the rate of unemployment in the United States has gone back to a 50-year low of 3.5%? It depends on what caused it. Discussing this question will lead us to look at numbers that some may find surprising. Figure 1 and Figure 2 show the evolution of the unemployment rate and of total (non-farm) employment under the previous and current administration. There appears to be little difference. If we calculate the average (compounded)...

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Hive Mind and Open Borders

Garett Jones’ new working paper on “Measuring the Sacrifice of Open Borders” has already received much attention.  Before I respond to it, though, let me recount The Story So Far. 1. About a decade ago, researchers such as Michael Clemens started using standard trade models to estimate the economic effects of open borders.  All such estimates were enormous, giving rise to slogans like “Open Borders: “The Efficient, Egalitarian, Libertarian, Utilitarian Way to Double...

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Is the UK about to become Canada?

Overall, I believe the EU has had a positive effect on Europe. Unfortunately, it has become too interventionist in some areas, especially when imposing regulations that are better left to national or local governments. At the same time, in many other areas it has not gone nearly far enough, especially in terms of creating a free trade zone in services. The UK is likely to leave the EU in the near future and there are indications that it may adopt a relationship that...

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