Category Archives: The dismal science

A Tip on Making Better Group Decisions

Since I assume many readers work in large organizations, I pass this post from Eliezer Yudkowsky at the Overcoming Bias blog as one of those rare bits of practical advice that isn’t overwhelmingly difficult to implement and can make a real difference in the quality of outcomes: From pp. 55-56 of Robyn Dawes’s Rational Choice […]

Brad DeLong Argues That Central Banks Should Cut Interest Rates

It’s always dangerous for mere mortals to take issue with Serious Economists, but let’s start with Brad DeLong’s thesis (hat tip Mark Thoma): The fact that there is even a small liquidity crunch for banks implies larger liquidity crunches for less intensively regulated financial institutions, and even greater liquidity crunches for manufacturing and real-estate companies. […]

Update From the Man Who Popularized "Minsky Moment"

George Magnus, senior economics adviser at UBS and the person responsible for bringing economist Hyman Minsky to the public’s attention, invokes him again in a good piece in the Financial Times. In keeping with his affinity for the world view of the dour economist, Magnus depicts our current credit crunch as a Minsky moment and […]

Martin Wolf Defends the Fed

Normally, I have the highest regard for Martin Wolf, the Financial Times’ lead economics writer. He is forthright, data-driven, articulate, sober, and insightful. However, I take issue with his current article, “The Federal Reserve must prolong the party,” and see its failings as symptomatic of the state of economics. In brief, Wolf argues that the […]

Minsky Moment Deferred?

John Authers of the Financial Times thinks the markets got a lucky break this week, and deferred a so-called Minsky moment, which he discussed in a noteworthy piece earlier. By way of background, economist Hyman Minsky observed that creditors become more lax about lending standards during times of stability. He divided borrowers into three types: […]

"Peculiar Libertarian Beliefs"

A little weekend levity, courtesy Economic Investigations: That recessions are always and everywhere caused by the government. (That’s because they mostly know only one theoretical account/scenario for such an event.) That the seigniorage caused by a 3% annual rate of inflation plays a big role in politics and that it’s big enough to motivate a […]

"Perils of Inflation Targeting"

We’ve been skeptical of inflation targeting, no doubt as a result of seeing Paul Volcker use monetary targets very effectively. Witness the proof of the pudding, namely, asset bubbles, deteriorating credit quality, and increasing inflation (at least in overall CPI, although core CPI is better behaved). But serious economists have only started looking into this […]

Market and Government Co-Dependence

The notion that markets need rules, and therefore rulemakers, which generally implies some form of government oversight, is anathema to libertarians. But as we have stressed before, the markets that the public at large thinks of as well-functioning, like the US stock markets, are in fact highly regulated and would not exist without it. So […]

Debunking the Notion That Unions Hurt Productivity

A neat little analysis by Ross Eisenbrey at the Economic Policy Institute may be difficult for union foes to explain away. It shows the proportion of workers covered by collective bargaining agreements in major European countries and the US and then shows productivity growth country by country in the same group 1979-2005. Despite being the […]

"Is international labor mobility necessarily good?"

Faithful readers, I hope you’ll forgive the comparatively skimpy posts this early morning. I had to spend some time with a buddy who had just learned that one of his closest friends is dying. Generally, I give trade economics a wide berth, because once you get past simple two-country, two factor models the discussion gets […]