Economics

Archive for Economics

Follow-Up on GDP and “Potential GDP”

Karl Smith graciously gave an answer to my earlier request, asking for clarification of how government economists would handle a scenario in which “real GDP” had shot up 10% because of massive investment in oil drilling infrastructure. Specifically, when people discover next year that there’s no oil there after all, then obviously (other things equal) […]

Waiting for Godot Deflation

It’s that time of the month, when the BLS gives us the official price statistics. Relying on both the PPI and the CPI releases, here’s the breakdown. From August 2010 to August 2011, we had the following increases in these categories: Consumer Goods +3.8% Finished Goods +6.5% Intermediate Goods +10.3% Crude Goods +18.4% It’s weird. […]

The Importance of Selection Effects

A neat puzzle from Alex Tabarrok, who is clearly in the top 50% of my ranking of MR bloggers: During WWII, statistician Abraham Wald was asked to help the British decide where to add armor to their bombers. After analyzing the records, he recommended adding more armor to the places where there was no damage! […]

Real Working Economists Bask: Computing Actual and Potential GDP

OK, I know some actual, professional economists read this blog. It is your embarrassing pleasure that you have to hide from your friends, like how I listen to the early Madonna when I’m by myself in the car. (“Crazy for You” is just a great song.) So here’s a little thought experiment, and I’d like […]

Daniel Kuehn Falls Into My Gnome Trap Headfirst

I actually have to get a bunch of “real work” done before flying to Vienna this weekend, and I’ve yet to earn the luxury of blogging a full response to Karl Smith on this gnome business. But for now, let me just point out that Daniel Kuehn tried to jump in on the action, and […]

A Qualified Defense of Don Boudreaux

I don’t know Don Boudreaux personally, and to be honest I wonder why he writes so many letters to the editor. But I want to give a qualified defense of him, because lately our friendly neighborhood Keynesians have been calling foul (e.g. here and here). I’m not defending the tone of Boudreaux’s stuff; of course […]

Maybe Krugman Isn’t Taking Sumner to the Prom After All

This is like watching Sam and Diane on the old Cheers. One day it’s Krugman, Sumner, and Milton Friedman versus the world, the next it’s this (HT2 a reader whose email I just lost): Nor does focusing on nominal GDP instead of M2 or whatever really bridge the gap. The point about M2-based monetarism was […]

Left- and Right-Wing Anarchists Agree: Gene Callahan Can’t Read

[UPDATE: Gene emailed Graeber, explained things the way Gene was looking at them, and Graeber said, “OK he misread your post.” Yet all I did was claim that Gene said fiat money preceded commodity money; that is the title of Gene’s post, after all. I’ll let Gene decide if it’s appropriate to reproduce his full […]