18 Nov 2015


Nick Rowe, Potpourri, Tom Woods, Tyler Cowen 18 Comments

==> Tom Woods has had a bunch of interesting episodes lately at his podcast. You know, the one that has 50% fewer hosts and is 50% as cool.

==> Second only to his posts that transformed my understanding of government debt burdens, this is my favorite work by Nick Rowe.

==> Cliff Asness is really interesting; read his interview with Tyler Cowen.

==> Josiah Neeley linked me to this analysis, which (if correct) shows that actually the men have nothing to do with it: apparently the death rate is up for non-Hispanic white women younger than 52. Note that I have no idea if this guy is right, but he seems competent and honest.

==> Von Pepe sent me this panel discussion about the Chicago School.

==> Remember that time when RBC theorists said the Great Depression was caused by shocks to total factor productivity, and the Keynesians laughed at their “Great Vacation” explanation? Awwwwkward.

==> Gene Callahan is developing into an absolutely perfect crotchety old man.

18 Nov 2015

Go Forth and Multiply, Murphy vs. Cowen Edition

Shameless Self-Promotion, Tyler Cowen 16 Comments

My latest at FEE reacts to Tyler’s discussion of China’s one-child policy.

17 Nov 2015

Go Forth and Multiply Bask

All Posts 7 Comments

Hey, can someone locate an “authoritative” forecast on per capita global real GDP growth for the long term? I just need a ballpark figure, like, “The IMF / World Bank / Magic 8 Ball says that per capita real GDP will grow an average of 1.5% annually through 2060…”

The actual figure is not important, I just want something to cite for an argument I’m making. I did a quick google and couldn’t find anything beyond forecasts for the next few years.

16 Nov 2015

Two New Blog Posts on Economic Freedom

*Choice*, Shameless Self-Promotion 4 Comments

Connected with my book Choice, I will have recurring blog posts at the Independent Institute. Here are the first two:

==> “We Need Free Enterprise in Banking”

==> “Schiller’s Irrational Faith in Government Regulation”

16 Nov 2015

In the Long Run, We’re All Earthlings

Immigration, Nick Rowe 31 Comments

In a recent post on the economics of immigration, Nick Rowe engages in the most astonishing example of “use the Cobb-Douglas model to assume away the very problem under discussion and don’t even realize you did it” that I’ve ever seen. Here’s Nick:

When economists disagree with public opinion, I normally agree with the economists. But we ought to think twice when this happens. Maybe, just maybe, public opinion is based not on ignorance but on something that our models leave out. When it comes to immigration policy, I think it is correct to say that elite opinion (which includes economists) in rich countries that are attractive to immigrants is generally more favourable to immigration than is public opinion. The elite finds public opinion a bit embarrassing, and tries to ignore it. They remind me of parents trying to get their kids to eat broccoli: “It’s good for you, and you will like it once you get used to it”.

The basic economics of immigration are quite simple. If we assume constant returns to scale, with output a function of labour and capital, and realise that increased labour creates increased capital (either immediately through capital inflows or slowly through immigrants’ saving), everything expands in proportion. Both supply and demand for labour expand, leaving real wages, per capita income, and the unemployment rate, all unchanged. [Bold added.]

Do you see that?! Marvel at its beauty. If people show up in a capital-rich country with nothing but their bare hands and work ethic, we can treat it the same as if they showed up with 8 tractors.

Later on, Nick starts relaxing assumptions, but he never says, “Oh yeah, it might take a generation or two for people from Africa to reach the level of per capita wealth that the US currently has, so that could depress wages and enrich capitalists only for 60 years tops. Maybe some people who work for wages don’t want to see a drop in their standard of living for 60 years–but they watch ‘Matlock’ too, the rubes.”

Also, I don’t think Nick even uses this approach consistently. Later in his post he writes: “So immigration probably doesn’t matter much for natives; but for immigrants it can sometimes matter a lot.”

But why would it? Wherever the home country of the immigrant is, they have the same Y=F(K,L) CRS production function. And Nick has told us that in the long run, K/L is mean-reverting. So real wages, per capita income, and the unemployment rate should be basically the same all over Earth, give or take. Why would any worker want to move to the US or Canada?

16 Nov 2015

Contra Krugman on Despair

Contra Krugman 21 Comments

A serious subject matter but goofy analysis from Krugman. Plus the bird is the word. (I can hear the bird in the first third of the podcast. Can you?)

16 Nov 2015

A Twist on Genesis

Religious 14 Comments

I’m going through Genesis with my Bible study partner, and it occurred to me that the feminist complaint about the temptation in the Garden can be flipped on its head. To refresh your memory:

3 Now the serpent was more crafty than any of the wild animals the Lord God had made. He said to the woman, “Did God really say, ‘You must not eat from any tree in the garden’?”

2 The woman said to the serpent, “We may eat fruit from the trees in the garden, 3 but God did say, ‘You must not eat fruit from the tree that is in the middle of the garden, and you must not touch it, or you will die.’”

4 “You will not certainly die,” the serpent said to the woman. 5 “For God knows that when you eat from it your eyes will be opened, and you will be like God, knowing good and evil.”

6 When the woman saw that the fruit of the tree was good for food and pleasing to the eye, and also desirable for gaining wisdom, she took some and ate it. She also gave some to her husband, who was with her, and he ate it. 7 Then the eyes of both of them were opened, and they realized they were naked; so they sewed fig leaves together and made coverings for themselves.

So I’ve heard feminist criticism of this account, for the (obvious) reason that it blames everything on the woman.

But look, I can give the story the opposite spin. The Devil had to attack the woman head-on. Once he tricked her, it was a piece of cake to get the husband to go along.

13 Nov 2015

Two Posts on Energy Issues

Climate Change, Oil, Shameless Self-Promotion 7 Comments

A little awkward talking about the UN Climate Change meetings in Paris in light of today’s tragic events, but anyway here are my two latest Institute for Energy Research posts:

==> This one shows that oil prices (adjusted with CPI) are higher now than the 1950-2015 average.

==> Check out the frankness of the UN’s top climate official on the $$ she wants.