Re: why aren't we smarter?
In a message dated 12/7/03 12:40:04 PM, [EMAIL PROTECTED] writes: >Your story does have a certain plausibility. But you'd need to argue that >the huge increase in IQ that has been documented during this last century >isn't really an increase in intelligence. And doing that makes it harder >to take Jewish IQ as relevant data. American Jews tested below average on Army intelligence tests conducted around the turn of the last century (1900), and a century later American Jews test substantially above the average. Were the Jews who fled the Nazis so much smarter than the Jews who came before that their small numbers could raise our average from below to well above the national average? Or has the national average fallen because of the crumbling public education system or the influx of (name the disfavored immigrant group of your choice). I do wonder about the meaning of IQ tests. I test out in the top 1% of the IQ distribution but have been singularly unsuccessful. Although it's anedotal, I know many other unsuccesful high IQ people as well. Clearly high IQ and success don't automatically go hand in hand. David Levenstam
Re: Why is a dollar today worth more than a dollar tomorrow?
In a message dated 12/7/03 4:03:55 PM, [EMAIL PROTECTED] writes: >So the question is, why at the zero rate was there not greater demand to >borrow? The answer may well be that the expected future inflation and >real >interest rates were highly uncertain, and the transaction costs of getting >and exiting from a loan were high, and there was a high level of risk >aversion. What counts is not just the cost of borrowing but also the >expected return on the borrowings, and if business conditions are bad, >then >the demand for loanable funds may be low because of uncertain earnings >or >asset appreciation. The inflation part of the nominal interest has to >be >paid in actual dollars, and so high rates of inflation may well deter >demand. A low real rate of interest induces more borrowing, other things >equal, but with higher inflation and greater business uncertatainty, other >things may not be equal. In other words, a person won't borrow even at a 0% rate of interest if he expects a negative rate of return were he to invest any funds he borrowed? DBL
tax credit for housing?
--- Tigger <[EMAIL PROTECTED]> wrote: > I support an alternate way for the gov't to support housebuying: > 50% tax credit on house payments (interest and principle), with > some lifetime maximum ($2, 3, 400 000?). > Tom This tax-credit subsidy will add to demand and further increase the price of housing, which then requires a bigger credit. The credit reduces tax revenue, and so for a given budget, other taxes get increased, so the result is further distortion of prices and a greater excess burden on the economy. This treats the symptom rather than cure the cause. Fred Foldvary = [EMAIL PROTECTED]
Re: Real wages constant since 1964?!
The inflation in real estate prices is a big problem, and is likely to be bigg. I support an alternate way for the gov't to support housebuying: 50% tax credit on house payments (interest and principle), with some lifetime maximum ($2, 3, 400 000?). The churning of mortgage loans in order to keep high interest payments in order to keep a larger deductible has to have lots of negative influences. I don't see any big reason the gov't should hugely subsidize houses of more than $800 000. The huge mortgage payment subsidies is one of the worst welfares for the rich. I don't like the Left's desire to punish, er, tax the rich -- but I also don't like the Reps wanting to use gov't to give the rich welfare. This idea comes from a desire to see a flat rate tax, like Russia has and Slovakia will be getting (1.1.04) -- until a different system of helping workers afford homes is put into place, a flat rate tax will be really unlikely in the US. Tom - Original Message - From: "Fred Foldvary" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Saturday, December 06, 2003 2:41 PM Subject: Re: Real wages constant since 1964?! > > If you measure wages in desk calculators instead of dollars, I'm sure > > they've gone up substantially! ;-) > > --Robert > > And if you measure wages in units of a real-estate price index, they have > gone down substantially! > Fred Foldvary > > = > [EMAIL PROTECTED]
Re: Why is a dollar today worth more than a dollar tomorrow?
--- John Morrow <[EMAIL PROTECTED]> wrote: > By the way, there have been times and places where the measured real > interest rate was essentially zero; I think this happened in Japan in > the 1990s. So the question is, why at the zero rate was there not greater demand to borrow? The answer may well be that the expected future inflation and real interest rates were highly uncertain, and the transaction costs of getting and exiting from a loan were high, and there was a high level of risk aversion. What counts is not just the cost of borrowing but also the expected return on the borrowings, and if business conditions are bad, then the demand for loanable funds may be low because of uncertain earnings or asset appreciation. The inflation part of the nominal interest has to be paid in actual dollars, and so high rates of inflation may well deter demand. A low real rate of interest induces more borrowing, other things equal, but with higher inflation and greater business uncertatainty, other things may not be equal. Fred Foldvary = [EMAIL PROTECTED]
Re: why aren't we smarter?
On 12/1/2003 Wei Dai wrote: > I argue that (a) can be an equilibrium. We are rather smart in some areas, > but the mechanisms in us that allow that are not up to the task of faking > being dumb in other areas - we are actually dumb in those other areas. This > is/was an equilibrium because people who tried to fake often got caught. I don't disagree that this occurs to some degree. But there must be a limit to how smart you can be in one area and still be dumb in another. I suggest we have already reached it, because otherwise the facts are hard to explain. Your story does have a certain plausibility. But you'd need to argue that the huge increase in IQ that has been documented during this last century isn't really an increase in intelligence. And doing that makes it harder to take Jewish IQ as relevant data. Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu Assistant Professor of Economics, George Mason University MSN 1D3, Carow Hall, Fairfax VA 22030- 703-993-2326 FAX: 703-993-2323
Re: Why is a dollar today worth more than a dollar tomorrow?
In a message dated 12/7/03 1:02:09 AM, [EMAIL PROTECTED] writes: >I recall a Japanese econ grad student telling me that in fact real interest >rates were negative for some span and people were STILL saving in the late >nineties in Japan. He also blamed several bubbles at the time (notably, >real estate in Japan) on this. Interesting if true... (Anyone know the >details and can they justify the connection without resorting to framing >biases of investors?) We had negative real interest rates in the US during some of the inflationary period from 1968-1982, particularly from 1978-1981. The S&Ls got hit precisely because rates of inflation greatly exceeded the rates on their home mortgages. All this time they were reporting nominal net income but were really suffering large real loses, and when they paid nominal dividends they were actually repatriating capital. It's no wonder that by the end of the period they were all grossly undercapitalized. David Levenstam
