>> >What are the big unsolved puzzles of economic empirical research?
>> 1) Why do people live so much longer today than they used to?
>
>Granted technological change and increased wealth, why is this such
>a mystery?
Robin could do a better job of explaining than I can, but the question is one of
proximate cause. Having money doesn't make you healthier. Medical technology has
improved, but the measurable effects are minor compared to the huge gains in life
expectancy (or so I'm told).
>> 2) Why are some nations rich and others poor?
>
>Are you claiming that we have little or no knowledge about this topic?
No matter how much knowledge we have it is still a big mystery. I would put it a
little differently. There are lots of good explanations for why countries developing
in isolation from each other wouldn't have the same level of GDP per capita, but it is
hard to understand why GDP per capita hasn't converged more (at all?) in the last
century. That would be my first choice for the biggest mystery in economics. Four
others would be:
2) Why doesn't trade equalize the returns to factors in different countries?
3) Why are wages for apparently similar workers in different firms so different?
4) Why are exchange rate movements so unrelated to movements in fundamentals?
5) Why do people vote (or engage in other socially useful but individually wasteful
behavior)?
William T. Dickens
The Brookings Institution
1775 Massachusetts Avenue, NW
Washington, DC 20036
Phone: (202) 797-6113
FAX: (202) 797-6181
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AOL IM: wtdickens
