At 3:23 PM -0400 10/24/00, Robin Hanson wrote:
Fabio wrote:
What are the big unsolved puzzles of economic empirical research?
What economic phenoma seem pretty darn important, but have not
been adequately explained by current economic theories?
1) Why do people live so much longer today than they used to?
Because the technology available to our genes to make us
phyloprogenitive hasn't caught up with the consequences of
intelligence.
That assumes your question is really "why doesn't the iron law work?"
If it is, instead, "what is the causal link between changes in the
individual's life and longer life expectancy," I suspect a good deal
of the answer is that higher incomes mean we don't have to push
ourselves to the limit so much--take risks of getting killed,
chilled, exhausted, etc. But I don't have any data.
2) Why are some nations rich and others poor?
I think that is less a puzzle--in the sense of a question to which
there ought to be a simple answer that we don't know--than a
complicated problem. We know lots of pieces of the answer--secure
property rights being the obvious one. But since the whole system is
interdependent (why are property rights secure in country X but not
country Y) it isn't surprising that no really clear answer to the
whole question is available.
3) Which kinds of consumption are more vs. less positional?
I suggest an approach based on evolutionary psychology--checked, of
course, against data.
4) Why do people agree to disagree?
Haven't you published a solution to that problem?
5) Why do the young ignore lifestyle advice from the old?
Because the advice is aimed at maximizing people's welfare when they
are old, which means giving no weight at all to utility flows when
young?
6) What exactly do people get out of voting?
What they get out of cheering at a football game--the pleasure of partisanship.
7) What is the functional form of a typical utility function U($)?
Again more a problem than a puzzle.
William T. Dickens suggests (among others):
2) Why doesn't trade equalize the returns to factors in different countries?
Most factors aren't terribly mobile. I expect it does roughly
equalize the return to capital, after allowing for risk and the like,
but I don't have any data.
4) Why are exchange rate movements so unrelated to movements in fundamentals?
Perhaps because they represent changes in estimates of the present
value of flows over long time periods--like changes in stock values.
Let me suggest:
A) Why are there sometimes predictable queues longer than required to
warehouse enough customers to allow restaurantes, theaters, etc. to
operate at capacity in the face of random demand.
B) Why is price control often introduced to stop prices from rising,
almost never to force them to fall, although the costs and the
benefits associated with the two versions are almost identical?
C) Why do people believe in just prices? (related to the preceding)
D) Why is so little spent on political campaigns, considering the
size of the prize?
I have an unpublished piece that proposes solutions to A-C, and have
published some hand waving on D but not much more.
--
David Friedman
Professor of Law
Santa Clara University
[EMAIL PROTECTED]
http://www.daviddfriedman.com/
