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Economics

Holographic GapMinding

November 30, 2010

Hans Rosling -- whose lectures are always fascinating -- is hosting a new documentary for the BBC called "The Joy of Stats." A 5 minute clip has been released on YouTube showing a faux-holographic version of Hans' GapMinder visualization package. The graphic overlay is very well done and lets Hans describe the data in an [...]

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Chicken soup for the global economy

November 8, 2010

Just replace "technology" with "stress": (via Dilbert)

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That Hertz

October 14, 2009

When you rent a car from Hertz, they offer three refueling options for when you return: Do it yourself (market price) Have Hertz do it ($6.89/gallon) Pre-purchase your refill ($2.89/gallon) On the surface, the pre-purchase looks pretty good. As the salespeople point out, "it's 20 cents below the pump!" But the small print is that [...]

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Projections of future losses may appear closer than they are

May 7, 2009

AK pointed me toward this piece from The New Yorker, "Stress Test Results: In Line With Other Estimates," which I excerpt here in its entirety. I've bolded the last sentence: From the moment the Treasury Department announced its plan to stress-test the country’s nineteen biggest “bank holding companies,” the process was dismissed as a whitewash. [...]

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The "less is more" approach

May 4, 2009

When I was in school, we read a paper on "damaged goods" - products which a manufacturer has intentionally disabled in order to price discriminate or drive revenue elsewhere. Now, Jorge Garcia's blog (you may also know him as Hurley), demonstrates the phenomenon in the wild via this accidental economics lesson: Kudos Smarte Carte On the new design. [...]

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On the age of empiricism

May 1, 2009

Caught this on Rortybomb - Barry Eichengreen has penned an excellent piece on the role of models in academia and finance, as well as the growing importance of empiricism (a point with which I particularly empathize).  An excerpt: Maybe so. But amid the pervading sense of gloom and doom, there is at least one reason for [...]

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Economics 101: Market Failure (PPIP edition)

March 25, 2009

Back in Ec 10 we discussed the two principal forms of market failure: moral hazard and adverse selection. Both are forms of information asymmetries, and lead to a loss of surplus and general lack of efficient resource allocation. Moral hazard is the idea that if someone knows they are protected from risk, they will behave in [...]

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Worst Weekend: Roundup

March 23, 2009

Unusually, the NYTimes published three opinions this weekend which all slammed Obama - from authors who usually gush about the administration. I don't back off my own opinion that the Times editorial writers are a bunch of pseudo-populist fair-weather fans, but as usual they manage some salient points in their rants: Let's kick it off with [...]

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What would McKinsey say?

March 11, 2009

The NYTimes' Economix blog has a new post by Ed Glaeser, which reexamines my favorite Dr. Suess book, The Lorax, through a neo-classical lens.  Revealingly, it's titled "The Lorax Was Wrong: Skyscrapers Are Green." And while I found the whole thing a bit overdone, I did enjoy one piece of the analysis: Over the protests [...]

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"We hate you guys."

February 12, 2009

Update!  The FT is reporting that China will buy treasuries after all, according to Luo Ping, a director-general at the China Banking Regulatory Commission: “Except for US Treasuries, what can you hold?” he asked. “Gold? You don’t hold Japanese government bonds or UK bonds. US Treasuries are the safe haven. For everyone, including China, it is the [...]

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But names will never hurt me

February 11, 2009

There is a fascinating debate raging right now among the world's most prominent economists, who are kicking and screaming at each other across newspaper columns, interviews, and their personal blogs. The diatribe was ignited by this January 22 opinion in the WSJ by the esteemed Robert Barro, whose class I was fortunate enough to attend one [...]

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The New Deal or: How I Learned To Stop Worrying and Love The Bomb

February 2, 2009

Would Americans trade a short severe recession for a long and grueling (but not as extreme) depression? Harold Cole, a professor of economics at the University of Pennsylvania, and Lee Ohanian, a professor of economics and director of the Ettinger Family Program in Macroeconomic Research at UCLA, argue in new research summarized in today's WSJ [...]

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We are all Keynesians now

January 31, 2009

NPR has an interesting article titled "Obama Gives Keynes His First Real-World Test."  I'm not convinced that's entirely accurate, it appears to be missing an appropriate disclaimer -- Keynesian economics played a large role in the New Deal (though, the article suggests, not enough of one).  Richard Nixon (yes, him again) famously declared in 1972 [...]

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So you're telling me there's a chance?

January 10, 2009

Reader's Digest has written a brief piece looking at state lottery games and noting that an increased proportion of recession spending is allocated toward these games of chance. Lotteries are excellent laboratories for testing the theories of Israeli psychologist Daniel Kahneman, who won the Nobel prize in economics in 2002.  Kahneman's focus was on the cognitive errors that people [...]

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The RIAA Sucks at Economics. Surprise.

February 26, 2008

Inflation popped up today, as it tends to, and in the course of my reading on the topic I came across a gem of a paper with the brilliantly inspiring title "CDs: A Better Value than Ever." The subtitle, "Prepared for the Recording Industry Association of America, Inc.," made it impossible to ignore. Watching these [...]

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