Re: Rawls and Nozick
Armchairs, Funny how Nozick and Rawls, intellectual rivals in the 70s, happened to die in the same year. Who can you say, in this day and age, are taking their place? -JA
Economists job market/search costs
(If this is not truly armchair material, I apologize in advance) Dear Armchairs, Advice for novice economics graduates is not scarce in several sources. As a fourth year phd student from Mason, however, there are some questions that I have not seen addressed very much--and here I want to profit from the considerable armchair audience familiarized with the demand and supply of George Mason (or similar programs) graduates. 1. Once you are almost ABD, what is the opportunity cost of prolonging your graduation one more year, as opposed to just taking your chances at the job market right now? Typically, the advise given is to check with your advisor, and whenever he says "go", one must go into the market. Which is fine, but, 2. What is the opportunity cost of trying the job market "prematurely", and, worse comes to worse, just cancel the job search if nothing appealing comes about and then try again the year after that? Other advice is that the more (or the stronger) the publications, teaching, and research record, the better your chances are in the market. Surely, but, 3. What is the benefit, at the margin, of going into the market with say one, two, or zero publications? (For instance, perhaps the market is so tight that the marginal benefit is not that big--after all, low-tier institutions may not be that different.) Finally, other advice is to be patient and realistic. Even a non-ideal placement is a good place to start, and from there it's up to yourself to move up--or not. But, 4. What increases the chances of better placement in the future more, one more year as a grad student (doing papers, teaching, etc.), or one or two years of work in X-institution? Again, if this posting is off-mark, I apologize. Otherwise, I'd appreciate any comments. Thanks, -An economist who cannot "do the math" of going into the market. :-)
Partisan fiscal policy
Armchairs, As the US recession looms larger and longer, Bush and his folk are found in the uneasy position of trying some active fiscal policies... In a very simplistic macro view, raising public expenditures or lowering taxes (in the short run) were both considered "expansionist" fiscal policies--at least in the sense that both increase public sector deficits... they are equivalent policies. However, in real world policymaking, republicans prefer lower taxes and democrats would rather have more expenditures... as if they were different policies. Does this partisan/ideological asymmetry have any real effect? Is the equivalence for real... in the short run... in the long run? Do people perceive them as different too? More practically, what is easier to get, lower taxes or higher expenditures? Does this apply to the federal as well to the state level? any reactions? -JA
Securities exchanges shutdowns
Armchairs, I was told that in the late 1960s, early 1970s, there were occasions when securities exchanges shut down because they were unable to keep up with all the paper they were generating (especially with clearing and settlement). This backlog may have forced exchanges to innovate their back offices, or to embrace new technologies and so on... Does any of you know if this shutdowns were true or where can I find some related information? I wonder if similar shutdowns have occurred in more recent times. I am digging for some citations and dates here but I am not old enough to remember! -JA
Silly business regulations
Armchairs, This is from the latest economist issue: Margarine is regulated to be whit color in Quebec Can you think of an American example that can top this? Quebec's silly business regulations Low-fat spat Mar 28th 2002 | MONTREAL From The Economist print edition Margarine of any colour, as long as it's white EUROPE is famous for its plethora of consumer-coddling business regulations. Silly rules have also taken hold in that little piece of Europe in North America, French-speaking Quebec. One local law, for instance, limits large supermarkets to four employees on Sunday, the idea being to promote small stores (whose prices are higher than the supermarkets'). But that looks positively sensible compared with Quebec's rules concerning what you spread on your toast. Margarine is yellow in every Canadian province except Quebec, where it is its natural colour, white. It is against the law to sell yellow margarine because, says the Quebec government, people might be fooled into thinking it is butter. Who could be behind such a thoughtful rule? Step forward Quebec's dairy industry, which is out to protect butter from the, er, spread of margarine. While Quebec has only 24% of Canada's people, it is home to 38% of its dairy cows. Among those who find the law unpalatable is Unilever, a consumer-goods giant that has 60% of the local margarine market. In 1997, it challenged the ruling by importing some of the illegal yellow stuff to a supermarket in Alma, a remote town north of Quebec City and home to the then premier, Lucien Bouchard. The yellow margarine was seized. Unilever sued, arguing that the ban violates international laws, including the North American Free-Trade Agreement, which is popular in Quebec. This week, the case went before the Court of Appeal, but a ruling could be months away. Unilever says the ban is costly, and points out that the dairy industry dyes butter to give it the same colour all year round. But Quebec's government is standing by its colour discrimination. Even the name suggests white, not yellow, say officials: margarine, invented by Hippolyte Mège-Mouriès in France in 1869, is named after the Greek word for pearl.
Re: growth in the past 20 years
I recently found this exchange over the same subject--I think it is very interesting to see how people on opposite sides simply talk past each other... -JA Are global poverty and inequality getting worse? March 2002 ROBERT WADE VS MARTIN WOLF http://www.prospect-magazine.co.uk/ArticleViewT2.asp?Accessible=yes&P_Article=10242
States' ideology measures
Armchairs, I know that most political surveys include some sort of ideological self-placement index. Is there any source of "ideology measures" at some disaggregated level for the US? (I am thinking of state, or regional levels for the last couple decades) Any suggestion would be most welcome... -JA
Campaign finance changes
Armchairs, What can legislators possibly aim at when changing campaign finance laws? What determined the 70s wave of campaign finance reforms... what changed in the meantime, and why the issue regained interest again? I know that contributors intentions are also a bit puzzling, but how can one explain the rationality of legislators limiting their own funding abilities? -ja
Re: Economics of rank
I dont think any sociologist would be so surprised to hear that economists are just "discovering" that, all else equal, we are status-seeking individuals... I'd say that too much Becker-Stiglitz modelling of economic-man make us forget this all too easily. -ja
Corporate giving
Armchairs, The ongoing Enron-gate has again spiced up the campaign finance debate. One side question also arised, however: Whatever position we have on corporate contributors and campaign finance, how does that position extrapolate to corporate contributions to research institutions, think-thanks or universities? Some free marketeers are proud not to depend on government funding--but what can they do if they found themselves being funded by a crooked company? I mean, if some legislators are trying to back off from receiving Enron money, should other parties react the same or not? and why? -JA
Financing redistribution
Armchairs, Most "social security" redistribution programs --like pensions, medical benefits, etc.-- are financed by payroll taxes. What would happen is some of this redistribution programs were financed by capital-income taxes? Would retirees become net contributors instead of net beneficiaries? What other implications are there? I just read somewhere that this was a puzzle... but is it? -JA
Daylight savings politics
Armchairs, What is the story behind Arizona not implementing daylight savings time? How would you measure the costs and benefits of such policy? In Mexico, daylight savings were introduced some 4-5 years ago. People didnt like it. And now the new president came with a politically "good idea": to reduce the savings period from 7 to 5 months to "satisfy those who were not comfortable". But northern Mexican states now feel in disadvantage with their intensive trading partners in border US states who do apply the full 7 month period. But then again, the also new governor of Mexico city (from a different party than that of the president) also got a "good idea": Daylight savings is authoritarian and disrupts people's everyday lives, hence, he is considering to cancel the whole savings thing in Mexico city... --a city where, to make things even more nonsensical, 35% or so of nationwide economic activity is held and which is sorrounded by some other 10 states who do follow the daylight savings program.
International returns to schooling
Armchairs, When you try to measure returns to schooling in a cross section of countries, how do you account for the fact that school coverage varies from place to place? --ie, the percentage of population attending basic school varying from place to place... Is there a direct relationship between the share of population attending school and the distribution of skills within that population sample? --I woud think that if 10% of a given country population attends high-school, their skills' distribution will probably be different from one where 60 % does so...
CA electricity shortage
Hi armchairs, I just read today's Krugman editorial on the NYT regarding the deregulation of electricity issue in California. As many sharp members of this list do reside in CA, I wonder what their reactions are... Here is an excerpt from Krugman --the complete opinion is in this link: http://www.nytimes.com/2000/12/10/opinion/10KRUG.html "Maybe California power companies aren't rigging electricity prices. But they clearly have both the means and the incentive to do so — and you have to wonder why the deregulators didn't worry about this, why they didn't ask seemingly obvious questions about whether the market they proposed to create would really work as advertised. And maybe that is the broader lesson of the debacle: Don't rush into a market solution when there are serious questions about whether the market will work. Both economic analysis and British experience should have rung warning bells about California's deregulation scheme; but those warnings were ignored — just as similar warnings are being ignored by enthusiasts for market solutions for everything from prescription drug coverage to education."
Re: Equity premium puzzle
Can you refer or explain succintly what those 3 candidate explanations are? -Etch A. Tabarrok wrote: << 1) The Equity Premium Puzzle - or why are the returns on stocks so high relative to bonds. We are close to solving this in that we have about three good answers now but no test to say which is correct. >>
Re: Assassination
In a message dated 10/5/00 5:54:21 PM Eastern Daylight Time, [EMAIL PROTECTED] writes: Harry Browne, the libertarian candidate, said that the way a free society would handle war is to offer a prize to the person or persons who assassinated the leader(s) of the opposing country. (..) This principle seems entirely reasonable to me. Indeed, the only reason I can think of why we don't do this is that it would work so well that our own leaders would fear for their lives. >> ...And what makes you be sure that actual prizes are not given to succesful military (perhaps secret) operations? ...Bodyguards surely behave as if that were the case... ...Maybe I've seen too many Bond movies... :) -Etch
Whither Wittmanian Public Choice?
Armchairs, The tide has been changing in recent decades, and it seems to me that the discourse on "market failures" is fading... But what about "political market failures" --if politics can be seen as a market, that is. The public/social choice pessimism on collective decision making looks pretty much like a "failure" kind argument... but is that the case? Why does Donald Wittman's (cfr "The mith of democratic failure") arguments are ipso facto ruled out as "naive panglossian view of the markets" by some scholars? Who else is doing political economy work in Wittmanian lines? Who has elaborated the best rebuttal to Wittman? Etch
Teacher's income
Armchairs, Here's a question that puzzles me every now and then. People from all walks of life tend to complain that their salaries are (injustly) low. Ok, why not complain, right? But when I think of professors, particularly university faculty and --if you push me harder-- economics faculty, I just get wonder: Are they really being underpaid as they often complain? Who else other than "economists" to understand why their wages are whatever they are? Yet I hardly have found an explanation despite the fact that economists like to "explain" every single fact of life they come about... So, are professors really underpaid? (if such statement makes any sense at all). What's beneath and beyond the popular saying: "life as an academic will not make you rich, but it will be fun"? What's to the other usual saying: "if you are so smart... why aint you rich?" What's beneath the general public opinion that "teachers are uderpaid"? What kind of people self select themselves to pursue academic careers?
De gustibus disputandum?
Hi armchairs, I have a rather naive question that I hope you dont find inappropiate for this list: Stigler & Becker's "De gustibus non est disputandum" (1977) piece is in almost all core microeconomics reading lists I am aware of... and many may consider it as the (almost) definitive word in choice theory treatment of preferences. But what is the cash value of the approach nowadays? We hear from choice anomalies in almost all fields of economics, game and decision theory, etc, so I wonder if the argument set forth in that piece still holds water, if at all...
Re: IEM Mexico's Gaf?
In a message dated 8/4/00 2:39:56 PM, [EMAIL PROTECTED] writes: << The IEM really messed up the Mexican election - giving a 70% chance of winning to PRI the day of the election. Big shock, or big failure of betting markets? >> If you see the IEM graphs, both the winner-takes-all and the vote-share, it is evident that the Mexican race was pretty tight, as most opinions polls mentioned throughout this year, giving only a 1 or 2% lead to the PRI candidate (Labastida) over the PAN's Mr Fox. It was only until June that the winner-takes-all graph diverged to a 70% likelihood of the PRI (the incumbent party) winning. This coincided with the last minute announcements of the PRI bureaucracy that they were about to apply their "heavy machinery" in full (their plethora of tricks, bribes and coercion attempts, that is) to avoid losing. Most Mexicans, including me, thought that was the end of Mr Fox race... I mean, this was a 70+ year old beast! Ex post, the clue in the polls seems to be the "undecided" electorate, which amounted to roughly 18% on average in serious polls. Some say that this electorate already knew they would vote for Mr Fox, but were afraid to express it... So, my take is that Mr. Fox winning was a shock, locally and abroad. I wonder how good has the IEM been in the past with structural breaks or drastic changes of regime --as the Mexican case can be considered.
