Wednesday, January 31, 2007

The End of Poverty

Jeffrey Sachs believes that with a little help we can get rid of poverty.

Tuesday, January 30, 2007

Gary Becker on Reforming the American Health Care System

"In thinking about reforms it is crucial to recognize that the American system has many strong features that should be preserved, such as the predominant role of private physicians, private hospitals, and private HMO's that compete against each other for patients and health care dollars". Read the article here.

Saturday, January 27, 2007

Why Globalising Capitalism is Hated

"Globalising capitalism is opposed by two major groups - the cultural nationalists in the third world, who fear the westernisation it may bring and the New Dirigistes, proponents of the “third way’” in the West who bear the ancient hatred of capitalism on their sleeves. Why this continuing hatred of, and guilt about, a system which promises unprecedented global prosperity?" See the article of Deepak Lal

Thursday, January 25, 2007

How Economists Think

Here is a chapter of David Friedman's book Price Theory on how economists think

Wednesday, January 24, 2007

Phelps on Dynamic Capitalism

"Instituting a high level of dynamism, so that the economy is fired by the new ideas of entrepreneurs, serves to transform the workplace--in the firms developing an innovation and also in the firms dealing with the innovations. The challenges that arise in developing a new idea and in gaining its acceptance in the marketplace provide the workforce with high levels of mental stimulation, problem-solving, employee-engagement and, thus, personal growth. Note that an individual working alone cannot easily create the continual arrival of new challenges. It "takes a village," preferably the whole society". Read the article here

Tuesday, January 23, 2007

What's Bringing Oil Prices Down?

According to James Hamilton in his blog Econbrowser the changed positions of speculators seem to be a big part of the explanation.

Krugman on Health Care

The Marginal Revolution has a recent op-ed of Paul Krugman on health insurance.

Milton Friedman: Free to Choose

Watch Milton Friedman's Free to Choose series online.

Monday, January 22, 2007

Financial Institutions for Low-Income People

Robert Shiller writes about financial innovations that may help finance low-income people and increase their savings.

Game Theory and War and Peace

In an article published in the American Political Science Review Bruce Bueno de Mesquita shows how game theory and political economics are important tools to help understanding conflicts between nations.

Sunday, January 21, 2007

Military-Economic Transactions tend to Corrupt Business

According to Robert Higgis: "In countries such as the United States, whose economies are commonly, though inaccurately, described as "capitalist" or "free-market," war and preparation for war systematically corrupt both parties to the state-private transactions by which the government obtains the bulk of its military goods and services". Read the rest of the article Here.

Saturday, January 20, 2007

Hayek and Orwell

In the prologue of the American edition of The Road To Serfdom, Hayek acknowledges the kindness of George Orwell in reviewing his book. Here is the review. Orwell concludes: "Capitalism leads to dole queues, the scramble for markets, and war. Collectivism leads to concentration camps, leader worship, and war. There is no way out of this unless a planned economy can somehow be combined with the freedom of the intellect, which can only happen if the concept of right and wrong is restored to politics". Aparently Orwell did not fully understand Hayek's argument.

Friday, January 19, 2007

Ph.D. Comics

Have a laugh at phdcomics.

Great Economists: Buchanan and Tullock

Picture of Gordon Tullock [left] and James Buchanan [right] authors of the classic "The Calculus of Consent". The picture was copied from the excelent blog Adam Smith lives.

Globalisation, Technology and Wages

Does globalisation increase wage inequality?

Fear and Work

"Our own and others' research have identified two types of factors that lead people to feel more or less safe speaking up: individual differences and contextual factors.Individual differences include personality dispositions such as one's level of extraversion or proactivity, or one's developed skills such as how to communicate in ways that don't evoke defensiveness, and also personal concerns about job security and/or mobility. These factors tend to be seen as applying across situations. For example, a person with greater communication skill might be more likely to speak up despite an unfavorable context.In contrast, context refers to organizational factors, outside the individual, that provide cues about how voice is likely to be received. Leader behavior is one such contextual cue. Aspects of organizational culture and structure also matter, such as the degree to which an organization is hierarchical or egalitarian, or has explicit mechanisms for inviting upward input (e.g., suggestion boxes, regularly-scheduled meetings, surveys).Our research adds the finding that specific features of the situation in which voice is contemplated, such as the size and formality of the venue and level of hierarchy present, also matter, as does the degree of demographic similarity between the speaker and the intended target of his or her communication". See the rest of the interview with Harvard's professor Amy Edmondson here.

Thursday, January 18, 2007

World Bank's Problems

The Economist analyzes some criticisms put forward on the World Bank's performance: "They accuse the leadership of taking “new and untested results as hard evidence that its preferred policies work”; and of then using this research to “proselytise on behalf of bank policy”. This has a cost, the inspectors point out. “Placing fragile selected new research results on a pedestal invites later recrimination that undermines the credibility and usefulness of all bank research.”"

Wednesday, January 17, 2007

Open Source Science

"Is there a model for encouraging large-scale scientific problem solving? Yes, and it comes from an unexpected and unrelated corner of the universe: open source software development". See the interview with Lakhani here.

Are Economic Agents Rational?

The Economist has the answer from neuroeconomics.


Ariel Rubinstein gives his answer to Freakonomics.

Tuesday, January 16, 2007

A Natural State

A Conceptual Framework for Interpreting Recorded Human History
Douglass C North, John Joseph Wallis, Barry R. Weingast
NBER Working Paper No. 12795Issued in December 2006

Abstract: Neither economics nor political science can explain the process of modern social development. The fact that developed societies always have developed economies and developed polities suggests that the connection between economics and politics must be a fundamental part of the development process. This paper develops an integrated theory of economics and politics. We show how, beginning 10,000 years ago, limited access social orders developed that were able to control violence, provide order, and allow greater production through specialization and exchange. Limited access orders provide order by using the political system to limit economic entry to create rents, and then using the rents to stabilize the political system and limit violence. We call this type of political economy arrangement a natural state. It appears to be the natural way that human societies are organized, even in most of the contemporary world. In contrast, a handful of developed societies have developed open access social orders. In these societies, open access and entry into economic and political organizations sustains economic and political competition. Social order is sustained by competition rather than rent-creation. The key to understanding modern social development is understanding the transition from limited to open access social orders, which only a handful of countries have managed since WWII.
See the paper at