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Category Archives: Economics principles

Saving Private Hayek

UPDATE: 3:30pm links to other reviews (all great) of the Fukuyama review at end of this post

F.A. Hayek continues to be the most mis-characterized economist of all time.  As if Glenn Beck were not doing enough damage, now even someone I greatly respect — Frank Fukuyama– has gotten Hayek wrong yet again. In a review of a new edition of the Constitution of Liberty in the NYT book review, Fukuyama says at the end:

In the end,

Also posted in Books and book reviews, Uncategorized | 28 Comments

Skeptics and thermostats

UPDATE 12:50PM: Please assume I’m an idiot (see end of post)

Many have suffered from being in a building where there was a centralized thermostat for the whole building (or the whole floor), with the predictable result that some rooms are way too hot or way too cold. (Sounds like a metaphor, watch for it…)

Things were even more extreme in the former Soviet Union, where there were centralized heating plants for a whole city, and the hot…

Also posted in Big ideas | 26 Comments

Complexity, Spontaneous Order, blah, blah, blah…and Wow

UPDATE: Thanks to the commenters who confirmed the “hostile reactions” thesis while disavowing hostility :>)… By the way, I am surprised nobody has yet mentioned that blogs, Twitter, Facebook, etc. are superb examples of Spontaneous Order.

I was surprised by hostile reactions to mentioning complexity on the Ivory Coast coup debate. Of course, I dish out hostility like water myself, so it’s only fair that I got accused of mindlessly mumbling complexity to sound trendy.

Regardless…

29 Comments

Substitutability: there is no substitute for learning this wonky concept if you want your project to succeed

The debate we had on the HDI brought up the seemingly drop-dead boring jargon “substitutability.” Surprise! This actually turns out to be a USEFUL concept.

Consider two extremes in an everyday example.  For producing the output: “weird music that Bill listens to,” my iPod and my iPhone are perfect substitutes, so one is redundant for this purpose (forget about other purposes for now). For producing this same output, headphones and the iPod are NOT…

Also posted in Academic research, Aid policies and approaches | Tagged | 9 Comments

Development is Uneven, Get Over It

UPDATE: out of 188 recorded songs on all Beatles albums, how many are now hits on iTunes? See end of post.

This a 20 minute extemporaneous talk at UNICEF headquarters in New York on the topic of “Inclusive Growth”. After the talk, there is a question, comment, and response session with the audience.  The full video is an hour, if you are really a masochist. (Try this link if the video player above doesn’t work.)…

Also posted in Aid debates, Democracy and freedom, Human rights | Tagged , , | 6 Comments

The US Map of Prices of Pot

UPDATE: just got the question on Twitter: “what does this have to do with development?” Answer: nothing, except that you will never understand development if you are so quick to ask that question.

When I first saw this map, I immediately thought legalize pot! what a great teaching tool for my Intro students! So students, please explain using the concepts of supply, demand, and transport costs (including in this case smuggling costs)…

Also posted in Maps | 13 Comments

Our China who art in heaven, hallowed be thy growth rate

UPDATE 4: thanks to all the critics on this post, too bad I couldnt get Chinese censoring technology to work:)

UPDATE 3: 9:30am Sat 10/9: links to Nobel Peace Prize and Charter ’08

UPDATE 2: 1:30pm. New Yorker writer Evan Osnos generously replies to my criticisms (see end of post)

SCOREBOAD UPDATE 10 AM 10/8: understanding key to China’s future development: Nobel Committee 1, New Yorker 0; Liu Xiaobo 1, Justin Lin, 0.

A writer

Also posted in Democracy and freedom | Tagged , , , | 34 Comments

Growing cars in Iowa

[T]here are two technologies for producing automobiles in America. One is to manufacture them in Detroit, and the other is to grow them in Iowa.

Here’s the detailed technology by which you grow cars in Iowa:

First you plant seeds, which are the raw material from which automobiles are constructed. You wait a few months until wheat appears. Then you harvest the wheat, load it onto ships, and sail the ships eastward into the

Tagged | 14 Comments

Welcome to economics, all you students (and aid workers)

Today, for the first time in my professional career I taught Principles of Economics. I’ll be teaching this all semester long and giving occasional reports from the classroom.

The officially required duty of all Principles instructors is to first define economics. Here is the definition from the 18th edition of McConnell, the most popular text on the market and actually the exact same text I used in my own first econ class 35 years ago:

Economics is

30 Comments

Manhattan’s Non-Market Economy

Tyler Cowen has a great NYT column today about the harmful distortions caused by “free” parking.

Manhattan offers plenty more ammunition to his case. Both sides of most crosstown numbered streets (17th, 18th, etc.) are devoted to “free” parking, which adds to traffic gridlock by creating one-lane streets, frequently blocked by delivery vans or by stopped taxis. Those using those “free” slots have to expend a lot of effort to keep moving their cars…

Also posted in In the news | Tagged , , | 8 Comments