This is Nathanael Smith's Typepad Profile.
Join Typepad and start following Nathanael Smith's activity
Join Now!
Already a member? Sign In
Nathanael Smith
Recent Activity
Becker and Murphy, writing skeptically about Adam Smith's hypothesis that "the division of labor is limited by the extent of the market," argue (here) that: Every reasonably large metropolitan area has several, often many, persons who have essentially the same specialized skills and compete in the same market. Pediatricians in the same HMO or psychiatrists who work out of a Psychoanalytic Institute have closely related skills and seek patients in the same geographic market. Any publisher in a major city has access to many copy editors and translators with very similar skills. The division of labor cannot be limited mainly... Continue reading
Posted Apr 5, 2010 at Wealth of Nations
Dan Dorfman: Drowing in Debt and Deficits In his commentary, Weiss, the head of Weiss Research in Jupiter, Fla., challenges the view of some market observers that the sovereign debt crisis is mostly behind us, that America's federal deficit is turning into a non-issue and it's back to business as usual. In particular, he took note of last month's deficit of $221 billion, the most the U.S. has ever experienced in a month in its history. Ever since America's Declaration of Independence, he wrote, deficit spending, a recurring theme in Washington, invariably returns with a vengeance, especially during wartime. But... Continue reading
Posted Mar 19, 2010 at Wealth of Nations
Nathanael Smith is now following The Typepad Team
Mar 15, 2010
Posner, in a post on the stimulus, mentions Ricardian equivalence: The stimulus has not, not yet anyway, “crowded out” private investment because there is so little demand for such investment at present even though interest rates are extremely low. The Barro-Ricardian Equivalence hypothesis implies that people are reducing their consumption and investment in anticipation of having to pay increased taxes in the future to repay the money borrowed to finance the stimulus. There may be something to this, but probably not much, because no one knows the form and incidence of taxes or other measures (inflation, devaluation, curtailment of government... Continue reading
Posted Mar 10, 2010 at Wealth of Nations
There's an interesting debate about faith-based aid organizations at Chris Blattman's blog, here and here. Of course, if it is the case that Christian faith-based organizations tend to be fairly effective at helping the needy, as Nick Kristof at the New York Times and Chris Blattman suggest, it's hardly surprising in view of the message of the New Testament (e.g., the parable of the Good Samaritan). Continue reading
Posted Mar 9, 2010 at Wealth of Nations
Iraqis may prove war was a mistake worth making (Washington Examiner) The Iraqi people have proven to be a tenacious bunch. Our forefathers had to wait 12 years after the Declaration of Independence to have their first direct congressional elections. The Iraqis have now completed their second legislative elections in just seven years. It would not have been possible without the unstinting sacrifices of the American military and the support of the citizens of the United States. But neither would it have been possible without the sheer cussedness of the Iraqis. Iranian meddlers and al Qaeda terrorists tried to delegitimize... Continue reading
Posted Mar 9, 2010 at Wealth of Nations
In a large literature on the empirical determinants of economic growth, the work of Jeffrey Sachs stands out as one of the most successful efforts. This paper summarizes a conclusion Sachs has published in several places. Key result: We start with the simplest specification, writing the log level of per capita income as a function of three underlying geographical variables: (1) Tropicar, the percentage of land in the geographical tropics; (2) Pop100km, the proportion of the population within 100km of the coastline; and (3) LDistance, the minimum log-distance of the country to one of the three core regions, measured specifically... Continue reading
Posted Mar 9, 2010 at Wealth of Nations
Brandon Fuller channels Jagdish Bhagwati on foreign aid: In reviewing Dambisa Moyo’s Dead Aid in Foreign Affairs, Jagdish Bhagwati takes an interesting look at the history of development aid. He traces the changes in the way economists viewed aid as well as changes in the tactics used by aid advocates. He also notes that while many development debates are still aid-related, recent large-scale development success stories, such as those in India and China, have a very different relation to development aid—almost none at all. Bhagwati’s essay focuses on development aid rather than humanitarian aid. Humanitarian aid seeks to alleviate human... Continue reading
Posted Mar 9, 2010 at Wealth of Nations
Bryan Caplan asks "How Normative Should Economics Be?": Almost all economists take one of the following three positions on normative economics: 1. Economics should never be normative. Economics is about what is, not what should be. 2. Economics should be normative about government policy, but not individual behavior. Economics is about identifying sound policies, not saving souls. 3. Economics should be normative about both government policy and individual behavior. Economics is about identifying sound decisions in every walk of life. (Of course, there is a fourth logically possible position - economics should be normative for individuals but not for government... Continue reading
Posted Feb 17, 2010 at Wealth of Nations
Anne Applebaum writes about the Greek default: I have seen America's future, and it is Greece. By this I do not mean that the Midwest will soon be covered with ancient ruins or that Texans will swap hamburgers for feta cheese. I mean that the ongoing Greek financial crisis is the same kind of crisis the United States might face a few years from now if we continue to make the same kinds of mistakes the Greeks have made over the last decade. For those who haven't followed this saga, let me reassure you that the story is quite straightforward:... Continue reading
Posted Feb 17, 2010 at Wealth of Nations
Nicholas Kaldor wrote in "The Irrelevance of Equilibrium Economics": Indeed it is the deep underlying belief, common to all economists of the so-called " neo-classical " school, that general equilibrium theory is the one and only starting point for any logically consistent explanation of the be- haviour of de-centralised economic systems. This belief sustained the theory despite the increasing (not diminishing) arbitrariness of its basic assumptions-which was forced upon its practitioners by the ever more precise cognition of the needs of logical consistency. In terms of gradually converting an " intellectual experiment " (to use Professor Kornai's phrase) I into... Continue reading
Posted Feb 3, 2010 at Wealth of Nations
I just finished reading The Stag Hunt and the Evolution of Social Structure. It's a brilliant little book, full of interesting simulation results that emerge when populations of agents play simple games with each other, such as bargaining, the prisoner's dilemma, a division-of-labor game, and the stag hunt. In some cases the interaction structure is allowed to vary; in some cheap talk is allowed; in some local interaction and neighborhoods are important; in some there is imitation of successful strategies. The author, Brian Skyrms, does a great job of bringing the whole topic down to earth. I've never seen evolutionary... Continue reading
Posted Jan 30, 2010 at Wealth of Nations
Aid efforts in Haiti are being condemned in some quarters as military occupation. The Telegraph reports: The French minister in charge of humanitarian relief called on the UN to "clarify" the American role amid claims the military build up was hampering aid efforts. Alain Joyandet admitted he had been involved in a scuffle with a US commander in the airport's control tower over the flight plan for a French evacuation flight. "This is about helping Haiti, not about occupying Haiti," Mr Joyandet said. Geneva-based charity Medecins Sans Frontieres backed his calls saying hundreds of lives were being put at risk... Continue reading
Posted Jan 28, 2010 at Wealth of Nations
A lot of people are using the Haitian earthquake as a pretext for immigration advocacy. David Henderson of EconLog has started the Henderson Let Em In Club, and Arnold Kling links to Bill Easterly, who has some facts: Of all the Haitians who live either in the United States or Haiti, and who live on more than $10 per day—at U.S. prices, adjusted for the fact that things are cheaper in Haiti—how many live in the U.S.? (That’s a barebones poverty standard, just one third of the U.S. “poverty line” for a single adult.) 82 Percent of Haitians above this... Continue reading
Posted Jan 25, 2010 at Wealth of Nations
I just set up a blogroll here, after searching around a bit for all the blogs on economic growth theory that I could find (plus some others). There actually aren't very many, so maybe there's a niche for me to fill after all. One of the blogs is written by maybe the world's top theorist of economic growth, Paul Romer. It's a very strange but interesting blog. He outlines his big idea in this TED talk. I support the idea of charter cities-- basically, promote economic development by creating new "charter cities" on uninhabited land, but with good rules, and... Continue reading
Posted Jan 22, 2010 at Wealth of Nations
It seems a bit ungrateful to name a fallacy after Nobel laureate George Stigler, who perceived and articulated the conflict between the neoclassical conception of markets and the classical ideas of division of labor as clearly as anyone in his generation, and thus paved the way for the literatures on "endogenous growth" and "inframarginal analysis" that I admire and want to build on in my own work. Nonetheless, Stigler's name is associated with a certain idea-- a certain fallacy, as I will argue-- that continues to marginalize the idea that growth might be due to division of labor. Stigler's "The... Continue reading
Posted Jan 18, 2010 at Wealth of Nations
Image
Over at Growthology, there have been a couple of posts about complexity and fragility. "Why should complexity imply fragility?" asks Dane Stangler. He tends to think not: To argue that complexity is equivalent to fragility requires you to increasingly argue backwards for why complexity turns from strength to weakness. The ultimate cause for the collapse of complex societies, as Tainter showed, is not their complexity. It may end up being a proximate cause or contributing factor, but not the ultimate reason. The reason, in Tainter's telling, is the marginal returns curve: at some point, a society's investment in complexity may... Continue reading
Posted Jan 14, 2010 at Wealth of Nations
Image
Laymen and professional economists might be, but for different reasons, mystified by why the contents of this post are important enough to be worth writing. For economists, the genre-- formal analysis of a firm's profit maximization problem-- is familiar to the point of tedium, like a textbook exercise. Such things can be easily done, of course, but not for their own sake. Precisely because they are so easy, they need to be justified by a good motivation. For laymen the mode of analysis may be seem obscure to the point of perversity, ingeniously combining inordinate difficulty with a complete lack... Continue reading
Posted Jan 12, 2010 at Wealth of Nations
Image
Prices! Prices, prices, prices. They're all around us, in shop windows and on supermarket shelves, in advertisements on TV and the internet and newspapers, in private conversations. How many prices does the average person see, or learn about, or transact on, in the course of a typical week? Hundreds? Thousands? Of course some people deal with more prices than other people do. College students are sometimes completely isolated from them, getting prepaid meals in the dining hall and attending prepaid lectures, the bills going to mom and dad. At the other extreme are Wall Street traders who probably see and... Continue reading
Posted Jan 10, 2010 at Wealth of Nations
This blog is a thinkpad for a web of ideas related to my PhD dissertation in Economics at George Mason University. I started the GMU program in fall of 2007 and finished my coursework last spring. The dissertation is the last stage. Since I'm working full time now my target end-date is 2012. Prior to the GMU program, I earned a Masters in International Development at Harvard (2001-2003) and then worked at the World Bank (2003-2004, 2005-2007) and the Cato Institute (2004-2005). I've been blogging for a long time over at a blog called "The Free Thinker"-- I blogged at... Continue reading
Posted Jan 9, 2010 at Wealth of Nations
This blog is a thinkpad for a web of ideas related to my PhD dissertation in Economics at George Mason University. I started the GMU program in fall of 2007 and finished my coursework last spring. The dissertation is the last stage. Since I'm working full time now my target end-date is 2012. Prior to the GMU program, I earned a Masters in International Development at Harvard (2001-2003) and then worked at the World Bank (2003-2004, 2005-2007) and the Cato Institute (2004-2005). I've been blogging for a long time over at a blog called "The Free Thinker"-- I blogged at... Continue reading
Posted Jan 5, 2010 at Wealth of Nations
Public Sandboxes in Second Life Are Second Life "sandboxes" (a) a public good, and/or (b) a commons? First, what's the difference between these two concepts? A public good is generally defined as having two characteristics; it is (a) non-rival, and (b) non-excludable. These are inherent, "technological," so to speak, traits of the good. The commons refers to resources over which no property rights are defined and/or enforced. If fencing is feasible and affordable, a field is not a public good: it is rival, since one herdsman or farmer's use of it either precludes others' use of it, or at least... Continue reading
Posted Oct 5, 2009 at Terraceconomicus Muse