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Tag Archives: Growth: Consequences

Alan Reynolds on the Disappearing Middle Class

At this link is a 22-minute talk that economist Alan Reynolds gave at Harvard in 1987. The other participants were John Kenneth Galbraith, Barry Bluestone, Lester Thurow, and Frank Levy. There is so much content in this one short talk that it impossible to summarize without losing a lot of content. It’s also funny and you can see that many people in his audience seemed to enjoy it too. The topic is “The Disappearing Middle Class.” Notice at about the 5:30 point,...

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Henderson on Tom Woods Podcast

Tom Woods contacted me last Thursday morning to ask if he could interview me that afternoon on this 8-minute monologue from Tucker Carlson in which Tucker endorses Elizabeth Warren’s economic plan and claims that libertarians are running Washington. On this latter, who knew? So with minimal prep, I did so. That episode has now come out. It is Episode 1423. It goes a little under half an hour and I was pretty pleased with it. I did make one major factual error. I said...

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Bio of Paul Romer is Online

There are actually two very different phases in Romer’s work on endogenous growth theory. Romer (1986) and Romer (1987) had an AK model. Real output was equal to A times K, where A is a positive constant and K is the amount of physical capital. The model assumes diminishing marginal returns to K, but assumes also that part of a firm’s investment in capital results in the production of new technology or human capital that, because it is non-rival and non-excludable,...

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Helicopters Over Manhattan

Helicopters have been whisking the wealthy from Manhattan to New York’s airports for decades. Now the ride costs as little as $195, and you can book it via a smartphone. Back in 2014, when Rob Wiesenthal founded Blade Urban Air Mobility Inc., a chopper ride to John F. Kennedy Airport—13 miles from Manhattan—started at $3,000, he says. Wiesenthal has been able to chop that price after finding efficiencies in fueling, equipment, and scheduling. This, from Hailey...

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China’s growth—what do we actually know?

Tyler Cowen recently linked to a study of China’s economic growth, which suggests that official figures (roughly 8%) overstate the real GDP growth rate by about 1.8%/year between 2010 and 2016: Using publicly available data, we provide revised estimates of local and national GDP by re-estimating output of industrial, construction, wholesale and retail firms using data on value-added taxes. We also use several local economic indicators that are less likely to be...

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A Strong Indicator of Economic Well-Being

For over a week, some neighbors of mine up the street put 3 nice-looking chairs in front of their house. It was their way of inviting passersby on a busy street to take the chairs. As I said, though, the chairs were there for over a week. I think they were finally picked up by the trash collector. This is a strong indicator of how well people are doing: you can’t even give away medium-quality chairs. I tried something similar a few months ago. I put out an old-style...

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Why I’m an Economic Optimist but Happiness Pessimist

Seven years ago, my mentor Tyler Cowen did an interview with The Atlantic entitled, “Why I’m a Happiness Optimist but Economic Pessimist.”  His point: Though GDP growth has been disappointingly low for decades, the internet does give us tons of free, fun stuff.  The more I reflect on the Paasche price index, though, the more I’m convinced that Tyler’s picture is exactly upside-down.  At least in the First World, the sensible position is economic optimism combined with...

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Peter Berger’s Historical Perspective

I’m going through various books in my library, trying to decide which ones to give to friends, which to donate, and which to discard. I almost offered to give sociologist Peter L. Berger’s 1986 book, The Capitalist Revolution, to a friend but, before doing so, reread sections I had marked up. I’m keeping it. The book has zinger after zinger. Here are two that give historical perspective that might make you appreciate modern dentistry and modern bathrooms,...

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McCloskey on Liberalism

Concretely I mean that the bizarre 18th-century idea of liberalism—which is the theory of a society composed entirely of free people, liberi, and no slaves—gave ordinary people the notion that they could have a go.  And go they did. In the earliest if hesitatingly liberal societies such as Britain and France, and among the liberi in societies still fully dominated by traditional hierarchies such as Russia and much of Italy, or the slave states of the United States,...

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What does it mean to speculate that growth is faster than we think?

Tyler Cowen has a new post that discusses the implications of under-measuring economic growth: Many people suggest that we are under-measuring the benefits of innovation, and thus real rates of economic growth are much higher than we think.  That in turn means the gdp deflator is off and real rates of interest are considerably higher than we think.  Someday we will all realize the truth and asset prices will adjust. Let’s say that view is correct (not my view, by the...

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