Bryan Caplan's Blog, page 47

The Persistence of Poverty: Karelis’ Puzzle

I first heard about Charles Karelis’ The Persistence of Poverty when it was published in 2007.  I didn’t just fail to read it; after hearing summaries of its thesis, I considered it too absurd to read.  Now that I’m writing a book on poverty, however, I felt duty-bound to go through the whole book.  When I did, I wasn’t just pleasantly surprised.  I was astounded.  The Persistence of Poverty is an awesome book.  So logical.  So concise.  So direct.  So insightful.  So beautifully written.  W...

Sweetness and Light: A Tale of Sugar Regulation

Tales of Weird Regulation, from Chad Syerson’s “What Determines Productivity?” (Journal of Economic Literature, 2011):

Benjamin Bridgman, Shi Qi, and Schmitz (2009) show how regulations in place for decades in the U.S. sugar market destroyed incentives to raise productivity. The U.S. Sugar Act, passed in 1934 as part of the Depression-era restructuring of agricultural law, funded a subsidy to sugar beet farmers with a tax on downstream sugar refining. Refiners were compensated for this tax by...

The Persistence of Poverty Book Club (Part 1)

Starting on Monday, I will be writing a long series of posts on Charles Karelis‘ utterly original book, The Persistence of Poverty.  I’d compare him to a left-wing Robin Hanson – gnawingly thought-provoking even when he’s mired in error.  (Don’t miss Robin on Karelis, by the way).

The Persistence of Poverty is so well-written and concise you can finish in two hours.  And used copies cost less than $2.00 on Amazon.  So give it a try, and see you Monday!

P.S. Charles says he will be happy to a...

The Persistence of Poverty Book Club

Starting on Monday, I will be writing a long series of posts on Charles Karelis‘ utterly original book, The Persistence of Poverty.  I’d compare him to a left-wing Robin Hanson – gnawingly thought-provoking even when he’s mired in error.  (Don’t miss Robin on Karelis, by the way).

The Persistence of Poverty is so well-written and concise you can finish in two hours.  And used copies cost less than $2.00 on Amazon.  So give it a try, and see you Monday!

P.S. Charles says he will be happy to a...

Socialism Sucks, and Everyone Ought to Know It

Today my friends Bob Lawson and Ben Powell have released their new Socialism Sucks: Two Economists Drink Their Way Through the Unfree World.  Intellectually, EconLog readers will know the score, but Socialism Sucks embeds good economics and economic history within an irreverent travelogue.  Modern socialist rhetoric is so ahistorical and otherworldly that it’s great to hear reports about what North Korea, Venezuela, and Cuba are actually like.  Along the way, Lawson and Powell thoughtfully e...

The Bayesian Prisoners’ Dilemma

Suppose someone sends you a new article claiming X.  Intuitively, we think, “This will either make you more likely to believe X, or have no effect.”  Once you understand Bayesian reasoning, however, this makes no sense.  When someone sends you an article claiming X, you should ask yourself, “Is this evidence stronger or weaker than I would have expected?” If the answer is “stronger, ” then you should become more likely to believe X.  However, if the answer is “weaker,” then you should become ...

Fernandez-Villaverde, Spain, and Gravity

In a follow-up to yesterday’s post, I asked Jesus Fernandez-Villaverde two follow-up questions.

My first question: “Suppose Spain had been in South America.  Would the same policies still have worked nearly as well?”

Jesus replied: “Yes if a free trade agreement with US and Canada had existed.”

I then inquired: “So the gravity model just isn’t that important here?  Opening your economy when you’re surrounded by rich neighbors seems a lot more fruitful than opening your economy when you’re sur...

Fernandez-Villaverde on Spain’s Economic Success

Last week I asked:

Why is Spain so much richer now than almost any country in Spanish America?  Before you answer with great confidence, ponder this: According to Angus Maddison’s data on per-capita GDP in 1950, Spain was poorer than Argentina, Chile, Mexico, Peru, Uruguay, and Venezuela, and roughly equal to Colombia, Bolivia, Costa Rica, Cuba, Ecuador, Guatemala, and Panama.  This is 11 years after the end of the Spanish Civil War, and Spain of course stayed out of World War II.

Via email,...

Winship Psychoanalyzes Economic Pessimism

I’ve spent years telling Tyler Cowen that conventional price indices are upwardly biased, so his stagnationist views are wrong.  And he’s spent years replying that my views are sadly out-of-date.  In this piece, the highly up-to-date Scott Winship unequivocally reaffirms the classic view that indices are indeed upwardly biased.  Indeed, the old Boskin Report was probably too cautious:

The chart shows that from 1969 to 2012, the PCE and my extended C-CPI-U series indicate that prices rose by a...

The Discouraged Suitor

Labor economists occasionally have a crisis of faith.  After years of scrutinizing the unemployment rate, they suddenly remember… discouraged workers.  Who are they?  They’re people who want a job, but aren’t officially unemployed because they aren’t actively searching for work.

This is a serious problem – and a serious flaw with official unemployment rates.  True, we should not forget the Prideful Worker Effect – the workers who say they want a job, but refuse to do any job for which they’re...