Re: Gas
From: "Thomas TerBush" <[EMAIL PROTECTED]> > The government here in Japan has a sly "solution" to this problem. Here the government maintains a stable gas price target by fluctuating the tax. > As the price of oil changes, the government adjusts the tax to keep prices around US$4.50 a gallon. Since there's no price change, no one complains (well, I complain, but I'm definitely in the minority here in every way).< If the supply of oil is fixed in the short run, then a tax on the sales price of oil should not affect the price to the consumer and just affects the profits of the seller. So perhaps the government has not really provided a solution at all, but just fools the public into thinking so. Since Japan imports all its oil, even in the longer run, if the tax is reduced, the demand would not change, so would the price not be affected? Where would the supply-side effect come from? Fred Foldvary
Re: Gas
On Sun, 17 Sep 2000, Bryan Caplan wrote: > > Where would the supply-side effect > > come from? > > Just because the world supply is fixed, does not mean that one country > can't reduce after-tax prices by cutting taxes. Inelastically supplied > to the world, elastically supplied to individual countries. > Prof. Bryan Caplan [EMAIL PROTECTED] If the product we are talking about is gasoline, it seems to me the oil is refined locally with imported oil. If gasoline itself is imported, then yes, the supply is elastic. But if the gasoline is all refined with Japan, then in the short run, if refineries are running at full capacity, it seems to me the supply of gasoline is inelastic, if not fixed. Fred Foldvary
Re: some history
> I remember hearing a talk a very long time ago by someone > who had tried to estimate the costs and benefits to Britain > of the empire, and concluded that on net it cost more than > it was worth. > David Friedman Because of British colonization, including of North America, English is now the predominant language. That saves many English speakers the costs of learning and using a foreign language, an on-going benefit. I wonder if such benefits have been included. The cost/benefit to the British includes having their former colonies, including the United States, as allies during the world wars. This may be a net loss, since if the Germans had not lost W.W.I, they would not have started WWII. The US-influenced W.W.I settlements also contributed to WWII - had the Austro-Hungarian empire not been broken up, the Germans would not have started their expansion into Austria and Czechia. So the colonization of the US by Britain and the creation of the USA may have indeed caused a large net loss for the British by contributing to the cause of World War II. Fred Foldvary
Re: The Economics of Chess conventions
> Question: Any other games use economic insights to make playing > and spectating more fun? > -fabio Poker uses two insights: 1. Rent. There are higher and lower valued cards, so a hand (set of cards) acquires a rent, paid by betting. 2. Entrepreneurship. One can win not just by having a highest-valued hand but also by bluffing, making others believe that one has it. The card-player as enterpreneur is successful if he knows the market, i.e. the playing styles of the others and the likely supplies (hands) and demands (likely bets). Fred Foldvary
Re: upward sloping demand curves
On Tue, 26 Sep 2000, Cyril Morong wrote: > My understanding of the upward sloping demand curve is that consumers may > be willing to buy more of a product if the price is higher because the > higher price may signal better quality. If the perception is that it is of better quality, then it is a different product, and the demand curve, which is for just one product, does not slope up. > What about attributes of the product? Isn't that what we really demand? Yes. So the demand curve is for just one set of characteristics. Fred Foldvary
Re: Upward Sloping Demand Curves
> The Role of Price Endings: Why Stores May Sell More at $49 than at $44 > This joint Chicago/MIT study, utilizing a large catalog field test, > found that increasing the price of an item from $44 to $49 may actually > increase demand of that item (quantity demanded for the anal-retentive > on the List) by up to 30%. This paradox is related to the "fact" that > $9 price endings lead to favorable customer price perceptions and > increased customer demand. However, overuse of the $9 price ending > dilutes this effect, as does the simultaneous use of sale signs. > J. Morrison Actually, when the greater quantity is bought at $49, it does indeed increase the demand, not the quantity demanded. When the price is raised to $50 from $49, the Q demanded falls. When the price falls from $49 to $48, it is the demand that shifts in, because the perception is that this is a different good. Try to reduce a price of a good that is familiar and has been selling at $49 to $48 and see if the quantity demanded declines. People won't knowingly throw away money unless they enjoy the throwing. Fred Foldvary
Re: Upward Sloping Demand Curves
> Very often for water bills, you have to pay more per unit once your > consumption goes above a certain level. This might make it seem like > the price goes up because your quantity demanded goes up(which reverses > the causality) and would mean an upward sloping demand curve. > Cyril Morong At a lower price the consume would be willing to buy more water, but the regulated utility is offering the first amount at a subsidy, creating a large consumer surplus. The price only goes up because it is controlled by regulators. In other cases, it is the opposite: large users get a volume discount. Fred Foldvary
Re: This year econ nobel prize?
On Mon, 9 Oct 2000, fabio guillermo rojas wrote: > Any guesses on the econ nobel prize this year? > -fabio My guess is that it will be James Heckman and Daniel McFadden. Fred (Of course it was easy to guess after the awards were announced.)
Re: Periodic redistribution
On Wed, 18 Oct 2000, Daljit Dhadwal wrote: > Before the Communist revolution in Russia, around every 10 years(I think) > land was equally divided up and distributed to the peasents. Also, under > some religions debts have to be foregiven every so often. What's the > rationale for this type of periodic redistribution? I'd appreciate a reference for this land redistribution in Russia. Fred Foldvary
Re: Top 10 Economic Puzzles
> What are the big unsolved puzzles of economic empirical research? > -fabio How much is the total land rent of the United States or any other country, and how much would that rent be if all taxes having an excess burden were eliminated? Fred Foldvary
Re: Externalities of Beauty
> The following story is from the BBC website. Is > this another blow against the invisible hand? > Daljit No. First, physical inequalities are inevitable no matter what the economic system. Second, beauty is not just physical but is also greatly influenced by behavior. A happy face, nicely groomed, will be more beautiful than a dishevelled sad face. Natural beauty is a Pareto-irrelevant factor; the relevant factor is outer beauty enhanced by inner beauty and improvements. > > "When the concept of 'most beautiful' in the > > world tends to be the same for everyone, it > > becomes more and more difficult to make more > > people happy." That's unwarranted. Beauty fades and is only one of many factors in the production function for happiness. Fred Foldvary
Re: garbage collection
> One of my students came to me with a puzzle. In his community, garbage > collection is a fairly competitive industry. New residents are given a > flyer listing 15 different collection companies. They generally charge > about $15/month for one collection per week. > Why are there so many collection companies? It would seem like there > would be economies of scale. > Andrew Sellgren Is there no product differentiation? Some firms could offer more frequent pickups, separate recyclable pickups, different day of the week, different methods of billing, better responses to complaints, allow for different size cans, etc. Monopolistic competition could then persist. What does the flyer say? Fred Foldvary
Re: Whither Wittmanian Public Choice?
> Why does Donald Wittman's (cfr "The mith of democratic failure") arguments > are ipso facto ruled out as "naive panglossian view of the markets" by some > scholars? > Who else is doing political economy work in Wittmanian lines? Who has > elaborated the best rebuttal to Wittman? > Etch Charles Rowley and Michelle Vachris reubutted Wittman in their chapter on "The Virginia school of political economy" in Beyond Neoclassical Economics, ed. Fred Foldvary (Edward Elgar Publishing, 1996).
Re: fairness
On Fri, 8 Dec 2000, John A. Viator wrote: >When conducting question and answer sessions for large audiences, > why do speakers often try to distribute their attention (pick > questioners) randomly? If one chooses questioners according to location or in some ordered sequence, it is not purely random, and it is therefore perceived as biased. If one chooses for example only from those in the back seats, it discriminates against those who came in earlier or preferred front seats. The perception of bias is eliminated by making the sequence of questionners appear to be purely random, any person having an equal chance of being picked. Fred Foldvary
Re: fairness
> If the audience is randomly distributed, then even a > sequential selection of questioners gives everyone an equal chance of > being chosen. > John True, but in fact, typical audiences are not randomly distributed, as the early comers may sit closer to the front or at the edges of the rows. A sequential selection is then not random because the questions themselves have a sequence and the early questions can set the agenda for the latter questions. Fred Foldvary
Re: Pocket Change
> A friend of mine noticed that men tend to carry rather large > amounts of change in their pockets compare to women. > Any economic explanation of why this is? > -fabio It seems to me we need more data to warrant the premise, than just "a friend of mine noticed". Fred Foldvary
Re: Property values
> Anybody know where I might find a time series index of the aggregate value > of property in the United States? > Eric Crampton Try the Balance Sheets for the US Economy, Federal Reserve Board. Fred Foldvary
Re:
> > Has anyone come across a paper available on the net dealing with debt default by a government > > to their own central bank. From: "Alexander Guerrero" <[EMAIL PROTECTED]> > I would say; it is not really a default, but a money financing budget deficit. If the government defaults on its debt at time T1, the budget deficit has already taken place before T1. Therefore, the default at T1 is itself not a deficit. The default reduces the budget expenses of the government, so after T1 it can more easily have a balanced budget, and if it does so, the default has helped eliminate future budget deficits, especially since the government will not easily be able to borrow funds after T1. If the central bank is forced to buy government debt after T1, then it is not an independent central bank, but in effect a branch of the treasury department issuing fiat currency. Fred Foldvary
Re: More Guns, Less Crime?
On Fri, 19 Jan 2001, Girard wrote: > Why not look at the statistics? Here are some : > Percent of households with a handgun: > United States 29% > United Kingdom 1 > > Murders committed with handguns annually: > United States 8,915 > United Kingdom 7 > > Murder rate (per 100,000 people): > United States 8.40 > United Kingdom 1.97 > > Who needs long dissertations to prove that guns kill? Nothing is proved. This is post-hoc ergo propter-hoc. Culture is a key variable here. Given the culture, the freedom to defend oneself may well be correlated with lower crime rates. Vermont in the US has the most liberty in self-defense and low crime rates relative to other states. Fred Foldvary
Re: More Guns, Less Crime?
On Fri, 19 Jan 2001, Girard wrote: > Why not look at the statistics? Here are some : > > Percent of households with a handgun: > > United States 29% > Finland 7 > Germany 7 > Canada 5 > Norway 4 > Europe 4 > Netherlands 2 > United Kingdom 1 These data are incomplete. Let's put Switzerland and Israel, in and use the data for all firearms. Both have high rates of arms, and low crime. Fred Foldvary
Re: your mail
On Wed, 31 Jan 2001, [iso-8859-1] markjohn® wrote: > i would like to ask to all the economists out there if the railroad system > of the country really matters in its development, even with the other good > transport facilities like better paved roads and freight. Yes, the railroad system does matter, because much of goods is transported via rail, and assuming that interventions have not skewed the market significantly towards railroads, the fact that much is transported thereby demonstrates in fact that railroads matter. It is more productive to have one engine pulling many cars than to have many separate engines if the cars are all going to the same place at the same time, and the steel rails and wheels provide less friction and more efficient transit than rubber and road. Fred Foldvary
Re: The paint market
> Consumers also derive utility from attriobutes of paint other than simply > colour. i.e branding, lifestyle association eg idyllic country cottage lilac > etc that may make the price differential justifiable. > David Often a professional painter will buy the paint and enter it as an expense, which is a small fraction of the total painting bill, so the painter is not that price sensitive, and prefers a known brand that he is familiar with to a cheaper one even if he thinks it may be similar, so that he avoids any complaints about the paint. The customer will not complain about a few dollars difference in the price of the paint when he is paying $20+ per hour for labor. Fred Foldvary
Re: The paint market
Why, if financial markets are efficient, do some closed-end mutual funds sell at a discount from the market value of the securities (stocks, bonds, etc.) owned by the fund? Fred Foldvary
Re: U.S. income & wealth inequality
> If everybody gets equally to what he produces, there still might be some > redistribution for the top downwards due to charity. > Krist van Besien But there is also income from land rent, which is independent of what one produces with labor. Fred Foldvary
Re: Growth, Wealth, and Race
> Sachs has popularized a strong finding: Distance from the equator > explains a great deal of the variation in income *levels* between > countries. The further from the equator, the richer countries are. So how do you explain the ancient Mayan, Azctec, Inca, Egyptian, Zimbabwe, and East Indian civilizations? This "finding" seems to be a historical concidence stemming from Europe having firearms and conquering the tropics. Fred Foldvary
Re: Growth, Wealth, and Race
On Fri, 16 Feb 2001, Bryan D Caplan wrote: > Circle the globe. The only civilization I can see that ever emerged > around the equator was the Inca. And their effective climate was not > equatorial due to high elevation, as far as I understand. Most of the equator crosses water, but if you expand the area to the tropics, there were civilizations in India, Cambodia, Bali, Central America, Zimbabwe, and elsewhere, with remains in stone today. What is the source for the statement that the Aztecs had a lower standard of living than the Spanish? Fred Foldvary
Re: Growth, Wealth, and Race
> fabio wrote: > >2) The real question is whether the current distribution of wealth is > >typical or not. If you did the same study 1000 AD, would you get the same > >picture? > > This is indeed the right question to ask. There seem to be just too > many possible explanatory variables and too few independent data points > at the moment. The solution: get more data points! > Robin Hanson [EMAIL PROTECTED] http://hanson.gmu.edu The earliest high civilizations seem to have been in the warmer areas: Central America rather than where the US and Canada now are; Egypt and Mesopotamia rather than further north in Europe; India rather than Siberia. Australia had low-tech aboriginies until the Europeans came. A curious aspect of history is how the Vikings evolved from warring invaders to peaceful social Scandinavian democrats. The book and study Economic Freedom of the World indicates that policy is the dominant variable in economic growth; Singapore and Hong Kong rate high even though they are in the tropics or nearby. Fred Foldvary
Re: the justification for urban planning
--- Ben Berry <[EMAIL PROTECTED]> wrote: > Markets ... don't do well in things like supplying housing in > proper configurations and locations because housing is a durable good that once sold is relatively permanent (30-100 years or more).< It depends on the particular market. If a housing development is owned by a corporation and leased to occupants, then the corporation is able to redevelop it later when demand warrants a higher density or different use. Spencer MacCallulm has written on this, calling such corporate communities "entrecoms" (forthcoming chapter in a book on policy justification edited by myself and Dan Klein). > Since they won't be living in the places more than 5 or > 10 years they don't care if the place is ugly to most people or shoddily constructed.< The main cause is government. In private community associations there are often covenants that prohibit ugly exteriors. As for shoddy construction, would this not reduce the market value of the building and liability in case of fire or earthquake? On the other hand, cheap construction makes it less costly to tear down and rebuild. > Related to this is the famous prisoner's dilemma > nobody invests and the neighborhood continues its downward > spiral. The dilemma is solved by contractual agreements, such as the covenants of the residential association. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
--- Kristjan Kanarik <[EMAIL PROTECTED]> wrote: > Has anybody read/heard about a tax which does have a positive > effect on economic growth? Yes. Land-value taxation promotes growth by having less excess burden, and by inducing more productive use of suboptimally used land. You could also force growth by taxing leisure, but that would distort choices and lead to less overall economic benefits. See the book "Land and Taxation" as well as "Land Value Taxation Around the World" (Vol 59 (5) supplement, 2000), American Journal of Economics and Sociology). Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Tax with positive growth effect
--- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > Well before yo tax "idle" land, you must be "sure" that the land > is "wasted", No, the whole rationale for taxing land value is that it does not matter what the site owner does with the land. Those who "waste" it will have to pay the same rate as those who maximize rental income. > And, believe me, this is something which has been > always very difficult to assess. How do you know? Insurance companies manage to appraise land value, because they don't want the insured to collect on that if the building burns down. > The big > question is : Does the land lord like to have idle land? If he does, fine; let him pay for that consumption. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
RE: Tax with positive growth effect
--- Alexander Guerrero <[EMAIL PROTECTED]> wrote: > How do you estimante market value? With respect to land value, besides monitoring sales and rentals of undeveloped land or sites such as parking lots, one estimates the cost of replacing the building, subtracts depreciation, and that amount is subtracted from the prevailing market prices in that neighborhood to estimate the land value. > and what kind of land you are talking about All land. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Austrian school and universalist economics
> Roger Garrison has made a very good cause for the Austrian > school to remain a separate school. He classifies schools as being > labour-based (Keynesian), money-based (Monetarists) and capital- > based (Austrian). > Pierre le Roux Austrian economics is not specifically capital-based, as there is much more to it, and has more fundamental features, but as a distinction from other schools of thought, indeed Austrian capital-goods theory has not been integrated into the mainstream and hence makes Austrian theory distinctive. As to one's approach to economics, is it not the best course to attempt to integrate the warranted theory from all schools to create a universalist school? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
> Whereas if there were no tax (i.e. if it was voluntary), individual businesses would be reluctant to use their money that way, even if they knew that everybody would be better off if everybody invested their share into the collective fund > (prisoner's paradox). > Gustavo Does the prisoners' paradox not disappear when the game is on-going and the participants may communicate? Why would a trade association with mutual benefits not work? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
--- [EMAIL PROTECTED] wrote: > For a very brief period of time several places in South Carolina > tried to tax idle land. The accessor would try to figure out what the most valuable improvement to the land would be and then asses based on that. It was a horrible failure. > What did happen is that landlords would throw up the absolute cheapest building that he could in order to avoid the assesor coming up with some idea.< > Mitch That is an incorrect way of assessing land value. The correct way to estimate the land value based on its best use is to use typical neighboring land values. The particular improvements of the particular plot under consideration should be utterly ignored. The site owner would then have no incentive to put up something just for show. Hong Kong is an example of successful public revenue from land value or rent. Under the UK colonial government, the government there obtained much of its revenue from leasing sites, which in turn were leased for 99 years from China until 1997. The rental revenue enables the administration to have low taxes (they could have zero taxes). Sidney, Australia, is among several cities world-wide which exempt improvements from the real-estate property tax, taxing only the land value. It does not seem to me that there have been any ill effects there or other cities that exempt improvements. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
> > No, the whole rationale for taxing land value is that it does not > > matter what the site owner does with the land. >What you are proposing is a kind of capital tax. I do not have >anything against it, but your face the economic consequences of >taxing "capital". No, because land is not capital. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Tax with positive growth effect
>> cost of replacing the building, subtracts depreciation, and that >> amount is subtracted from the prevailing market prices in that >> neighborhood to estimate the land value. > I agree, but you are talking about is price of land, not its value; > that is market price!!!The difference makes the difference. > Alexander Guerrero I don't understand what difference you are referring to. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find a job, post your resume. http://careers.yahoo.com
Re: Austrians and markets
--- Mark Steckbeck <[EMAIL PROTECTED]> wrote: > the recent post by Dan Klein > pertaining to changing the name of the school (let's put the old wine in new > wineskins) > Mark Steckbeck I think your interpretation of Dan Klein's proposal is not what he intended. As I understand it, the proposal is not just to rename the school, but to create a new movement composed of Austrians as well as other pro-freedom scholars not affiliated with Austrianism, but also also not glued to the mainstream formalist methodology. The institutions (societies, journals) would be based some of the current Austrian ones because these are the major free-market ones that currently exist and that could create the basis for the new movement. This would not just be a new wineskin but a new vintage of wine. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Find the one for you at Yahoo! Personals http://personals.yahoo.com
RE: random nobel
--- [EMAIL PROTECTED] wrote: > who is spence? Michael Spence is at Stanford University. >From the Nobel press release: Michael Spence identified an important form of adjustment by individual market participants, where the better informed take costly actions in an attempt to improve on their market outcome by credibly transmitting information to the poorly informed. Spence showed when such signaling will actually work. While his own research emphasized education as a productivity signal in job markets, subsequent research has suggested many other applications, e.g., how firms may use dividends to signal their profitability to agents in the stock. F.F. = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: 2001 Economic Nobelists
> Stiglitz would have liked to get the prize for the Modigliani-Miller > theorem but that one was already taken. > Alex Stiglitz also helped develop the "Henry-George Theorem". Joseph Stiglitz, 1977, "The Theory of Local Public Goods," in Economics of Public Services. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: VS: looking for public choice views on the welfare state
> public choice view on / explanation of (the > development of) the welfare state. Have you seen: Richard Wagner, To Promote the General Welfare, 1989. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Make a great connection at Yahoo! Personals. http://personals.yahoo.com
Re: Local news
> Why is local news done by television stations when most other > local programming (soap operas, game shows, talk shows) is contracted > out? Or to phrase the question differently: why do local tv stations > do *any* of their programming? > Fabio I don't see why this is puzzling. A news show is only shown once, and only locally, so there does not seem to be any economies of scale or savings in transaction costs in contracting it out. Secondly, there is a pyschological identification between news programs and viewers that is not present in other programs. TV is, after all, a media for news, and if it is contracted out, then it is not really the station's news presentation, and thus there would be a less personal relationship with the station. That is why national broadcasts also do their own news. It is e.g. CBS news, which creates an emotional bond with CBS and its anchormen. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Buy the perfect holiday gifts at Yahoo! Shopping. http://shopping.yahoo.com
Heterodox conference
FYI: CALL FOR PAPERS 4th ANNUAL CONFERENCE OF THE ASSOCIATION OF HETERODOX ECONOMICS 9-10 JULY 2002 Dublin, Republic of Ireland All economists are encouraged to come together and hear a diversity of papers on topics not well represented in mainstream economics. Papers from a plurality of perspectives and topic areas are encouraged -- for example, Post Keynesian Economics, Marxian Economics, Labour Process Theory, Institutional Economics, Feminist Economics, Evolutionary Economics, History of Economic Thought, Business History, Social Economics, Input- Output Analysis, Economic Policy, Interdisciplinary Economics, Sraffian Economics, Economic philosophy-Methodology, Austrian Economics, Georgist Economics, Historical Economics, Postmodern Economics, etc. Please send copies of a 250-word abstract for your proposed paper to: Avis Lexton, Faculty of Social Sciences, The Open University, Walton Hall, Milton Keynes U.K. MK7 6AA Or email: [EMAIL PROTECTED] as the initial point of contact Deadline for submission: 30th January 2002 = [EMAIL PROTECTED] __ Do You Yahoo!? Buy the perfect holiday gifts at Yahoo! Shopping. http://shopping.yahoo.com
Re: Increased Demand for an Economics Degree
--- markjohn <[EMAIL PROTECTED]> wrote: > With the recession going on, suddenly, more high school students would want > to take economics as a degree. This hypothesis stemmed from the observation > that more people I know would want to take it. Is there any "economic" > answer to this? Yes. Your sample is most likely too small to warrant a general conclusion that more want to take economics. Also, data alone cannot create a hypothesis. You also need to apply some theory. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Buy the perfect holiday gifts at Yahoo! Shopping. http://shopping.yahoo.com
Re: The Median Voter Theorem and Adoption Law
--- Bryan D Caplan <[EMAIL PROTECTED]> wrote: > ... Does the > median voter really want the system we have, where basketcase biological > parents can take their crying offspring away from impeccable adoptive > parents? How about the de facto efforts to avoid trans-racial > adoption? Etc.? I rarely expect the median voter to agree with me, but > this seems like a case where a comfortable majority of normal Americans > dislike the existing rules. The median voter theroem is not supposed to explain all legislation, since public choice theory also states that there will be rent seeking and privelege seeking by concentrated interests at the expense of the general public. The special interests can in some cases be the predilections of government officials, since voters are ignorant of many laws until they happen to apply to them. The median voter explains some laws, but not all, and probably not most. Most folks are not concerned about adoption law unless they themselves are going to adopt, and it is not a high priority in elections. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/
Re: The Median Voter Theorem and Adoption Law
--- Bryan Caplan <[EMAIL PROTECTED]> wrote: > I'm highly dissatisfied with interest group explanations. Simple > reason: Most of the policies traditionally blamed on interest groups are > in fact *popular*. Adoption laws seem like a case where existing > policies are not popular, though perhaps I'm wrong on that count. Cato's "Policy Analysis" 420 (Dec 12, 2001) studied voter initiatives and found that tax-and-expediture limitations passed by voters are more restrictive than such legislation by representatives, and they cause per-capita state spending to decrease. At least in this respect, the interests of the voters do not seem to coincide with the legislation by the reps. Also, it does not seem to me that if they knew about it, most voters would approve of agriculture subsidies and price supports. Why would the median voter want a higher price for sugar and subsidies for the owners of sugar beet farms? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/
Re: Only Economists Tell the Truth?
--- Robin Hanson <[EMAIL PROTECTED]> wrote: > Social science > would be vastly easier than economists make it out to be if we could > usually just ask people why they do things. But economists are generally > skeptical of this approach, Social science does have a great advantage over biological-behavior science in that we can ask our subjects of study what they are thinking and feeling. This makes up for not being able to do as extensive experiments on them as do those who study animals and plants. More of this should be done, taking into account the fact that of course people lie to pollsters and also, many folks don't really know why they do many things, at least beneath the superficial reasons. Economists can also figure much behavior out from common observation and introspection. But perhaps a major reason why we don't rely so much on asking, is that economics is more concerned with the means towards goals than on why folks have the goals that they do. We presume the means involve economizing, and then there is really no need to inquire personally beyond that; Max(U) given constraints C does the job, perhaps too abstractly. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE video emails in Yahoo! Mail! http://promo.yahoo.com/videomail/
Re: Photographers
> for the negatives - but the photographers always react with horror to > this suggestion and refuse. > Alex Ask them how much is the least they would accept in payment for the negative, before you have the picture taken. Go and ask several photographers. If they say "I don't sell negatives," offer $10,000. He will probably say OK. Then tell him you will be asking other photographers, and so, what is the least he would accept? You could also mention that if you can't get the negative, you will scan the photo into your computer. The quality won't be as good as with a negative, and folks might think it is the fault of the photographer. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
> What about e-mail spam? The technology seems to prohibit an effective ban > on spam, yet neither an economic nor legal solution seems > available. Any thoughts on whether spam can be reduced via > some sort of economic or technical mechanism? > Fabio I don't have specific expertise on email technology, but as one who has done computer programming, it seems to me that the simple solution is to require a field in the email headers that would be set to 1 if the email fits the legal definition of spam and 0 otherwise. Software could then easily handle the spam. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
--- "Ole J. Rogeberg" <[EMAIL PROTECTED]> wrote: > A problem with Fred's solution is that the most obnoxious spammers would > probably set their field to the "non-spam" when they sent out spam, But if it were illegal, with stiff fines, for a spam message to have the field set as non-spam, that would decrease the volume. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
--- Eric Crampton <[EMAIL PROTECTED]> wrote: > While we're at it, why don't we make it illegal for people to kill each > other. If it were illegal, with stiff fines, we'd surely get rid of > murder. Do you deny that we have less murder with laws penalizing it than if we had no such laws? If so, do you wish to eliminate all criminal codes? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: Spam: Legal, economic or technical problem?
> AOL is the most popular ISP (I think) and Hotmail must be up there in > popularity for email accounts- and this is the case even though those > two are notorious for giving out their banks of email addresses to > spammers. In addition, selling these names is good because it makes the > service cheaper- you may not like spam, but you do like a free email > account... > Jason Hotmail is free to email users, but they can also designate a junk-mail filter level, which puts spam in a junk-mail folder, which is eventually deleted if the user does not. The Yahoo site gets a lot less spam, in my experience. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: drink prices
> > (1) Where else do people buy things without knowing the price first? > Hotel phone calls. > Also, in restaurants people often order drinks before they see the menu. > Prof. Bryan Caplan There are also many situations where the price can change, and alter prior price agreements. Suppose you hire a carpenter to fix a stairway. He quotes you a price. But halfway thru the job, the carpenter discovers rotten pieces that were not previously known, that have to be replaced, and the price increases. You have already contracted and paid some of the expenses; most folks will just go along with reasonable price changes. So often, in such cases, we really don't know the final price. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Great stuff seeking new owners in Yahoo! Auctions! http://auctions.yahoo.com
Re: The Economics of Military Stop-Loss Policies
--- Strobl Maj Michael R <[EMAIL PROTECTED]> wrote: > The military's current stop-loss policy prevents certain service members > from leaving the service at the end of their normal enlistment contract. Question: when one enlists today, is it clear in the contract that the enlistee may be subject to stop-loss? Was stop-loss in the contract in the past, when those now subject to that policy enlisted? If the stop-loss policy was not in effect, and if the contract did not provide for this policy, then yes, it acts as a draft. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Send FREE Valentine eCards with Yahoo! Greetings! http://greetings.yahoo.com
Re: privatize parking spaces - market failure?
--- "Gustavo Lacerda (mediaone)" <[EMAIL PROTECTED]> wrote: > What if cities decided to privatize on-street parking spaces? > > I imagine that this could be a market failure in mixed > residential-commercial neighbourhoods. The reasoning is that most cars > spend the night at residences and the day at business locations. The market solution would be electronic parking meters that flexibly charge just enough to avoid congestion at any time of day or night. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: privatize parking spaces - market failure?
--- Gustavo Lacerda <[EMAIL PROTECTED]> wrote: > Are you suggesting a system that is sensitive to the market conditions at > the exact moment in time (i.e. dynamically priced)? Yes. > but such a system would be hard to implement. The technology already exists. > Can you > think of an existing analogous system in a similar market? Toll roads that charge according to how much congestion there is. Computer systems where users bid for time. Any kind of auction system for renting a resource during some time. > Would there be a bound to the charge per time? No. The charge should be just high enough to eliminate congestion so that there is usually a parking space within one or two blocks. > The parking spaces would be > more attractive if they offered some sort of guarantee. The guarantee is to be able to find a space. That is what the parkers would pay for, the highest bidders getting the space during those times. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: privatize parking spaces - market failure?
--- "Gustavo Lacerda (mediaone)" <[EMAIL PROTECTED]> wrote: > What if you're parked at home, and there is an unexpected shortage of > spaces? If you are "at home" in your garage or driveway, there is no parking meter charge. But if you are in front of your home in a public street with meters, then, yes, you pay the current market rate. It is not your property. > If you're surprised by an $800 charge for an unusually tight night, You need not be surprised if you check what the current hourly rate is. If you leave your car for long periods of time without checking the rate, yes, you could be surprised by the bill, but then you should know in advance that you are vulnerable to a variable charge. Metered parking is supposed to be short term. If you want to park for a long time, either park in your driveway or go to a parking lot or parking structure where they have fixed rates. Your example is extremely unlikely, since at night there is usually plenty of parking. > (A) A system in which the driver gets a short-duration, (say 24h or 10h, > it's the driver's choice) lease for the spot. The price for available > spaces > fluctuates, but once you park (i.e. sign the lease), the terms of the lease > become fixed. That would be fine for a parking structure. But street parking requires availability, which is best met with a dynamic fee that eliminates congestion. Street parking is meant for short periods of time. High rates imply that is what folks are willing to pay. If you are not willing, don't park there. Continuously high rates become a signal to provide more parking. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - Coverage of the 2002 Olympic Games http://sports.yahoo.com
Re: Campaign finance changes
> What determined the 70s wave of campaign finance reforms... what changed in > the meantime, It seems to me that it is in the interest of the elected officials to make voters think that they are limiting the influence of the special interests, while not doing so in substance. Hence the 1970s "reforms" which prohibited direct contributions by corporations yet allowed them to set up PACs which can give unlimited amounts. What changed is that voters now realize, with escalating campaign contributions, that past reforms have not worked, so once again, they will treat the symptoms without changing the cause of the problem. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - sign up for Fantasy Baseball http://sports.yahoo.com
Re: Campaign finance changes
> The real problem is not how to get money out of politics but how to get > politics out of money. > Alex For my analysis of how to do this, see "Recalculating Consent" at: http://www.gmu.edu/jbc/fest/files/foldvary.htm Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Try FREE Yahoo! Mail - the world's greatest free email! http://mail.yahoo.com/
Re: MBA's for senior exec's
> Why do older executives desire MBA's or B-school Ph.D.'s? > Fabio For the same reason most investors need an advisor - for discipline. Old dogs do need to learn new tricks, and the execs could do so on their own, but but most don't have the discipline to do it alone. By taking a class, they put structure into their lives so they have to go to class and do the work. If they just read books or went to seminars ad hoc, they would keep putting it off, since the important but non-urgent tasks tend to get postponed. The degree is then just icing on the cake. In short, taking a class puts the learning into the category of urgent, so it gets done. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - live college hoops coverage http://sports.yahoo.com/
Re: growth in the past 20 years
--- Chirag Kasbekar <[EMAIL PROTECTED]> wrote: > Anybody willing to pick holes in this one? > The Mirage of Progress > The past 20 years have > been an abject economic failure for most countries, In fact, during the past 20 years, some economies (Hong Kong, Taiwan) have grown rapidly while others (Argentina, Zaire) have sunk into decay and poverty. So global averages don't provide any insight. The project "Economic Freedom of the World" demonstrates what theory also concludes, that economies with more economic freedom have greater growth. So it is not trade but domestic interventions that keep economies poor. See http://www.freetheworld.com Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Sports - live college hoops coverage http://sports.yahoo.com/
Re: long-lasting cars
--- "Gustavo Lacerda (from work)" <[EMAIL PROTECTED]> wrote: > By (P1), producing long-lived cars could result in smaller profits (this > would happen in the form of fewer sales). > > Thus the interests of the manufacturer could be in opposition to the > interests of the consumer (this reluctance to change production would be > held up by collusion with the other manufacturers). Does this make sense? No. There would be a profit opportunity for a company to make long-duration cars, and eventually only those would be produced. It is technically possible to make cars that deteriorate in one year, but we don't see these in the market today. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Movies - coverage of the 74th Academy Awards® http://movies.yahoo.com/
Re: Securities analysis
> what's everyone's opinion here on fundamental vs. technical analysis? > Dan Information does not instantly get propagated to all participants in a market, so there are profit opportunities for those who study market patterns. There may be changes in volume and price preceding a major trend. Investors Business Daily, for example, features articles on it. It is probably not complete nonsense, but for the non-professional investor, he best stick with Modern Portfolio Theory and not time the market. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://http://taxes.yahoo.com/
Re: re : securities analysis
> This possibility was made all too clear to me when I took a $20,000 > short position in Amazon.com - - a year too early. > William T. Dickens But those who bought long-term put options (LEAPs) on Amazon could lose no more than than their financial investment, and the put options could be held or others bought until the downturn, with no margin calls. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: entropy and sustainability
> Dear armchairs, > who among you knows something new about the consequence of entropy on > sustainability and environmental/ressource economics (books, papers, etc.)? > Steffen I know something: any article on economics with the word "entropy" is likely to be nonsense, unless it itself declares such articles nonsense. Entropy says a closed system will dissipate into unavailable energy. But the earth is not a closed system. It keeps getting solar energy, and therefore the biomass and economic activity can increase indefinitely, so long as the sun continues to shine. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: entropy and sustainability
> Do you mean this even when "entropy" is used in the context of information > theory? > Gustavo No, Claude Shannon's http://cm.bell-labs.com/cm/ms/what/shannonday/paper.html usage, to separate noise from information, regards statistical entropy, a measure of dispersion, a different meaning from theormodynamic entropy, which was the environmental question. From http://www.csu.edu.au/ci/vol03/finalst3/node3.html#SECTION0003 "The entropy is a property of a distribution over a discrete set of symbols. It is strongly sensitive to the number or variety of the symbols and less so to their relative probabilities of occurrence. The entropy of the sequence has a number of equivalent interpretations. It is a measure of the complexity of the random process that generates the sequence. It is the length of shortest binary description of the states of the random variable that generates the sequence, so it is the size of the most compressed description of the sequence. It is the number of binary questions that need to be asked (20 questions style) to determine the sequence. It also measures the average surprise, or information gain, occasioned by the receipt of a symbol. In other words, the entropy measures the complexity or variety of the random variable that underlies a process." Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: entropy and sustainability
--- Anton Sherwood <[EMAIL PROTECTED]> wrote: John Perich wrote: > . . . here's a thought: in six billion years, the sun will burn out, > making all research into sustainability and environmental / resource > economics a waste of time. . . . But what is the present value of something 6 billion years in the future? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: Grade Inflation
It seems to me that an effective remedy to grade inflation would be standardized exams on the subjects taught, prior to graduation. There would be, for example, a standard exam for econ majors, similar to what is done in grad schools. If many universities used the same exams, then that would serve as a signal of knowledge, and also reveal the grade differential relative to test results. That, of course, is why such exams are not being implemented. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: entropy and sustainability
--- Wei Dai <[EMAIL PROTECTED]> wrote: > Economic activity can't increase indefinitely, because eventually we'll > have improved our technologies to the limits imposed by physics I don't see why physics limits all technological progress. For example, someone could write improved software, and that would have nothing to do with physical limitations. Engineering improvements can also be made within current knowledge of physics. Similar propositions apply to biological knowledge. New genetic combinations can be invented within the current knowledge of basic biology. Generally, it seems to me that applications of a science can advance even if the science does not. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: Grade Inflation
--- "Robert A. Book" <[EMAIL PROTECTED]> wrote: > Isn't this what the GRE, MCAT, etc., are for? Granted, they don't > apply to all post-graduate plans, but it's a start. How many employers require applicants having a BA/BS to have taken the GRE etc. before they are considered for hiring? If few do, then it shows the degree and grades are still a sufficient criterion. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: some history! RE: economic history question
> If there was a capitalistic system with very few or no poor people, it's > answer to the question of the poor would be extremely interesting. > Tom Grey Taiwan has develped rapidly while maintaining a distribution of income more equal than that of Sweden. It was able to do this with land reform combined with taxing much of the land rent. A market economy can have both more efficiency and more equity relative to today's economies by shifting taxation off of wages and capital and onto rent. Excessive regulations would also need to be removed. That would go a long way to reducing poverty, without a welfare state. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
RE: economic history question
--- Bryan Etzel <[EMAIL PROTECTED]> wrote: > Would we have seen an increasing level of social unrest had capitalism been > left alone? > Has/was capitalism been saved? There seem to be two different meanings of "capitalism" here. 1) "capitalism left alone" implies a pure market or close to it. 2) "been saved" implies the mixed economy we have always had. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: economic history question
--- Anton Sherwood <[EMAIL PROTECTED]> wrote: > Would social unrest increase if the market were, for once, left alone? No. Leaving the market alone implies reducing marginal tax rates to zero. Wages would be higher and unemployment lower. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
RE: Emotions and Entrepeneurship
> My just comment is that we should not use "irrational expectations" > term in this discuss, because nobody, for sure know the > difference between rationality and irrationality of human beigns. > santosh Economic rationality is different in meaning from psychological rationality. Economic rationality consists of just two things: 1. Economizing: minimize costs and maximize benefits. 2. Consistency: if A is preferred to B and B to C, then A is preferred to C. This transitivity applies only at a moment in time. Economic rationality does not judge ends. It is about consistency of ends and about the means to ends. Economic rationality also does not judge beliefs. Hence, one may be out of touch with reality yet be economically rational. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: entropy and sustainability
> So there maybe physical limits on certain technologies, but are there > limits on human creativity in creating new technologies? We may fill > the capacity of a silicon chip, but what about a chip made of something > organic? or some other yet unthought of way to store info? Certain > ideas may have finite limits, but is the number of idea finite? > Jason There are ultimate physical limits on the speed of data processing, but I don't see why there are any limits on computer programs, and thus no limit to software technology, even given hardware constraints. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Tax Center - online filing with TurboTax http://taxes.yahoo.com/
Re: Tax Leisure via Time Audits?
--- Robin Hanson <[EMAIL PROTECTED]> wrote: > Once upon a time income taxes were difficult to collect, because > income was hard to cheaply monitor. So governments used less > efficient taxes, Not necessarily. Real-estate taxes were not that difficult to collect, and rather efficient. Land has hitorically been used as a tax base. > Income taxes are inefficient, however, because people respond by > substituting leisure and home production for wages. Income taxes are also inefficient because they are complex, requiring tax lawyers and accountants, and million of hours of "home production" keeping records and filling out forms. > But this > inefficiency need only apply if we assume that we cannot cheaply > monitor time spent working for wages. What about taxes on profits? That will always be complex because of the question of what is a deductible expense. > And as the technology of > surveillance improves, it should get easier to monitor this. The technology would need to keep ahead of tax-evading encrypted texts. > Perhaps in the future, the government will randomly check on each > person ten times a year, and see if they are working for wages > at that moment. And if you are working at home? They will need a video camera. > Anyone ever estimated the size of the deadweight loss from the > income tax distortion? The book The Losses of Nations, estimates the US loss conservatively at over $1 trillion per year from all taxes. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Games - play chess, backgammon, pool and more http://games.yahoo.com/
Re: What is a market?
> Imagine that an alien arrives on planet earth and asks you "what > is a market?" What kind of economic system would count as a "market"? > Fabio We can cut through the fog by first defining a market in its purity: A pure market economy exists where all economic activity is voluntary for all persons in the economy. There are neither restrictions nor imposed arbitrary costs on peaceful and honest human action. In a pure market economy, there is free trade, with no taxation of labor, capital, or goods. Restrictions can be enacted if they are clearly necessary for the military defense of the country, especially during times of war. Government revenues are derived from user fees, fines, and rentals. A pollution tax, for example, is not an intervention, but rather prevents or compensates the private imposition of damage to others. Governmental interventions, whether restrictive regulations or taxes, create a mixed economy, a mixture of market and government intrusion. The economies of today are thus mixed economies with skewed markets, markets whose prices and profits are distorted by taxes, subsidies, and restrictions. To understand the market, we need to differentiate a pure market from a market skewed by intervention. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Health - your guide to health and wellness http://health.yahoo.com
Re: What is a market?
> I am trying to think about cultures that don't have the economic > institutions that Western countries have. > Fabio The pure market is trans-institutional. The voluntariness of human action does not depend on any particular institutions. One can have a voluntary society in a primal or primitive hunting and gathering economy. > For example, if the people > of one nation voluntarily adopted Islamic law and did not charge > interest, voluntarily, would that be a market? Yes, if "the people" meant all the people. > Basically, I want > to get beyond "voluntary interaction" and try to think about > the institutions you need in order to have Western style markets. This is a different question than your original question of what is a market. > So if people abolish interest rates, they're abolishing one of the > key market mechanisms. It is impossible to abolish interest rates. All one can do is change who gets the interest and the form the interest payments take. If one loans funds without an explicit payment of interest, then implicitly the lender is gifting the interest to the borrower. If a bank becomes a partner in an enterprise instead of loaning it funds, then the interest is implicitly paid to the bank in the form of profits. > Although it's voluntary, it's certainly missing > something important. No, it is just a different institutional structure for obtaining the interest or shifting who receives it. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Health - your guide to health and wellness http://health.yahoo.com
Re: Ricardian environmentalism
> All "Ricardian evironmentalism" would mean is that the standard discount > rate is applied to future environmental ammenities. How can that be wrong? > I know some environmental economists do actually make this claim -- that > the discount rate should be different for the environment than for other > assets, but I am not impressed. > Mark Wilson Perhaps some environmentalists apply the same discount rate but place a value on the earth's overall natural environment at infinity, so that at any discount rate, the present value of having the natural environment survive would also be infinite. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Shopping - Mother's Day is May 12th! http://shopping.yahoo.com
Re: Fw: Worldwide slowdown in economic growth
> evidence suggest (Cato journal - I believe the fall 1998-issue) that a > tax biurden of around 20 percent of GDP seems to be optimal for > economic growth (provided, of course, that it is spent somewhat wisely). > any higher, and economic growth will be reduced Optimal implies that there will be less growth at rate lower than 20. Why is the optimal tax burden not less than 20? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience http://launch.yahoo.com
Re: Fw: Worldwide slowdown in economic growth
--- Jacob W Braestrup <[EMAIL PROTECTED]> wrote: > I guess the idea is that some state activities: secuiring a market, > prtecting property, etc. promote economic growth... > The share of GDP spent on the "core" activities of the state is > roughlty around 20 percent of GDP > - jacob But some of these activities would be unnecessary in a pure free market, e.g. there would be no need to "promote" growth, because it would not be hampered in the first place. Secondly, even given core spending, this need not be as a tax on general income or sales, hence the 20% would not apply. The optimal rate for growth is a marginal tax rate of zero. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience http://launch.yahoo.com
Re: Fw: Worldwide slowdown in economic growth
> BTW, would anyone also > care to comment on Mankiw's text as a replacement for the venerable > Samuelson? > ~Alypius Skinner I use Mankiw. It is straight-forward, readable, and does not get goofy. It is not purely pro-market, but as good a mainstream text as one can find. I don't like the treatment of public goods, but I get around that with in class. > The following is taken from G.Mankiw 'Macroeconomics' Fourth Edition 1999 > The Worldwide Slowdown in Economic Growth > > * An increase in government regulations Yes. > * The world has started to run out of new ideas about how to produce. We > have entered an age of slower technological progress. Refuted by the 1990s boom. > The world wide slowdown in economic growth largely remains a > mystery. Not a mystery. Intervention reduces growth, and innovation increases it. We had a spurt of innovation during the 1990s boom. A large increase in intervention during the 60s and 70s retarded growth. There were some tax cuts after that had a positive supply-side effect. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience http://launch.yahoo.com
Re: 1970s global slowdown
--- James Haney <[EMAIL PROTECTED]> wrote: > I think someone has to mention the nutty supply-side argument on this one. There are several supply-side arguments. Taxes, regulations, litigations, etc., all impose excess costs. > The slowdown in economic growth seems to have coincided with the breakdown > of the Bretton Woods monetary system and the US abandonment of the gold > standard. It's connected, but not causally. The same inflation that led to abandomment of fixed exchanges to gold also helped cause other problems, along with other causes, during the 1970s. But there has been growth since 1982, so fiat money as such may impede but does not substantially halt growth. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? LAUNCH - Your Yahoo! Music Experience http://launch.yahoo.com
Re: In Praise of Pay Toilets
--- John Perich <[EMAIL PROTECTED]> wrote: > why do some public restrooms in restaurants / bookstores require > either coins OR free tokens to use? There are 2 sets of users: customers and free-riding non-customers. It seems the intent is for customers to get tokens and non-customers to pay, so that if someone just walks in off the street, he could not get a free token, but would pay. Some restaurants say that the restrooms are for customers only, and it would be an interesting experiment to find out the minimum payment they would accept to have a non-customer use it. The price would probably be high if the owner instructed "customers only" but is out of the premises, so it would be a matter of how high the bribe would be in order for the supervisor to overturn the instructions. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! - Official partner of 2002 FIFA World Cup http://fifaworldcup.yahoo.com
Re: academic journals
> universities are maximizing something, but it's not clear what. > John Samples Could it be that such universities seek to maximize prestige, or academic esteem? In the academic culture, publishing in "top" journals generates esteem, so that is what is sought. Secondarily, an academic reputation generates esteem among the public. Students then seek out such universities, not because the teaching is good, since it may not be, but because the prestige carries over to degrees and credentials. Thus, the original seed of good and useful research grows into a tree where the fruit becomes an end in itself and is perpetuated by cultural memes which are themselves the end. The question is whether the "top" economic journals do publish the most useful and innovative research and insights, or whether an academic culture has developed that self-perpetuates an illusion. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! - Official partner of 2002 FIFA World Cup http://fifaworldcup.yahoo.com
Re: high school economics
> What would you recommend, a course that shows economics > concisely (and thus covering more topic) or showing it light (with just the > core economic concepts like supply, demand, cost, utility... etc; less > topic but more fun into it)? Similarly, what could be the topics that would > be taught in a year's course? I would cover the core concepts. Topics should include: 1. Basic conceps: utility, scarcity, economizing (optimizing), opportunity cost; factors of production: land, labor, capital goods; what is a "market" 2. Supply and demand; effects of price controls; elasticity 3. Production (cost, law of diminishing returns); accounting versus economic profit. Consumption (e.g. equality of MU/P). 4. Consumer and producer surplus; excess burden (deadweight loss); how the excess burden is affected by the elasticities of supply and demand 5. Theory of exchange; international trade (comparative advantage) 6. The capitalization of local externalities into site rents 7. Public choice 8. Time preference, interest rates (real and nominal), present value, asset prices as a function of yield, discount rate, and tax rate 9. Money and banking; central banking versus free banking; fixed versus floating currencies 10. National income accounting; aggregate supply and demand The macroeconomic determination of output and the price level (including the labor market determination of the real wage; the aggregate production function, and AS/AD) 11. The business cycle 12. Economic growth and development The main concept to be appreciated in economics is the implicit reality that lies beneath the superficial appearance of economic activity. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! - Official partner of 2002 FIFA World Cup http://fifaworldcup.yahoo.com
Re: Amusement Park Lines and Concert Tickets
> Fred Foldvary wrote: > > Has any economist in this forum ever offered money to persons ahead of > > him to advance in a queue? > I would do it if I thought other people wouldn't assume I was crazy or > grifting. The problem is other people don't understand economics. > Prof. Bryan Caplan But why is the problem not that folks do not understand that there would be some mutual gain if one accepted cash in order to switch places with a person who urgently wants to advance in the line, but rather that it is just not culturally acceptable? (Hence, "crazy," but not necesarily grifting.) Why assume it is due to ignorance? This seems to me to be a hypothesis easily tested. In fact, I will test it and report back! (I will print up an official-looking data sheet, and if a subject looks at me oddly, I will explain that this is an economics experiment.) Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Sign up for SBC Yahoo! Dial - First Month Free http://sbc.yahoo.com
Re:
--- markjohn <[EMAIL PROTECTED]> wrote: > Could you please describe in layman's how does fiat money work? Fiat lux means "let there be light" Fiat money means, "let there be money." In the US, the Federal Reserve system (central bank) issues money by increasing bank reserves (deposits), which is further expanded by bank lending, thus determining the money supply, along with the velocity of circulation. Specifically, in effect, the FED's Open Market Committee buys US Treasury bonds in the market. The buyer deposits the FED check into his bank, and his bank then deposits the FED check into its account with the regional Federal Reserve Bank. The FED bank covers the check by increasing the private bank's reserves (deposits). That is how the FED explands money out of nothing. Fred Foldvary Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Sign up for SBC Yahoo! Dial - First Month Free http://sbc.yahoo.com
Re: children and cooperation
--- Robin Hanson <[EMAIL PROTECTED]> wrote: > Let me propose a signaling story. The young try more to signal to > each other that they would be good allies and mates, while the old > are already matched more and need to get along. The young need to > show that they know how to be and are capable of being cooperative, > but they also need to show that they are tough, will defend their > allies, etc. Some adults in tough neighborhoods place much value in "respect," and the slightest offense that seems disrespectful is countered with immediate hostility: verbal threats or violence. Many adults remain unsophisticated in that they do not filter emotions and actions but blurt out the feelings that pop into their minds and often react without first poindering the outcome. Children are this way. They are therefore deliberately taught how to behave in polite society: that one does not hit others or call them bad names. Those so trained learn to be "cool" in reaction. The natural human capacity for sympathy with others is a trait that needs to be developed in order to become part of one's character. Children learn to achieve greater self-control partly from experience but in large part also by being deliberately taught by adults. This pattern then becomes a habit and "second nature". So it seems to me that cooperation is something that, in part, needs to be taught as manners. It is a matter of becoming more conscious and sophisticated in human relations. It does not always happen just from mere experience in interaction, since some never learn cooperation. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Sign up for SBC Yahoo! Dial - First Month Free http://sbc.yahoo.com
options for employees
Can someone explain exactly how employee stock options operate? 1a) In the market, the owner of a stock can "write" a call option on stock he owns, meaning a buyer pays the stock owner a market price for the option. The option buyer is paying for the rights to the future gains from the stocks, the stock owner giving up rights to the gains. 1b) When a firm pays an employee with stock options, A) does the firm in effect write options on stocks held by the firm, or B) does the firm create options by fiat, based on no shares? If B, the employee option owner gains at whose expense? 1c) The true cost to the firm seems to be the market price of the option. Is this what accountants and reformers say would be charged to expenses? 2) When the option is exercised, the option owner pays the exercise price, which I presume is usually very low. a) Does the firm typically issue new shares of stock for this sale, or b) does the firm sell shares that it buys or previously owned? If the firm issues new shares or buys shares, it seems this is a second expense, since issued shares dilute the value of other shares, and bought shares are an explicit cost. Are newly issued shares for options exercised recorded as an expense to the shareholders? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Why do people pick stocks?
> If it is common knowledge that picking stocks is no better than > using an index, then why is stock picking so popular? > Fabio 1) It is not common knowledge to many investors. 2) Some stock pickers indeed do better than average. 3) Investors tend to be overconfident as to their abilities. This is generally found by behavioral economists. > Ie, why do people accept lower returns just for the privilige of > picking the stocks themselves? Besides being overconfident, they enjoy the picking and owning, and some like the thrill of risk. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Defense of Free Trade
> What is the best overall, relatively comprehensive (i.e. not just an intro > to the basic principles) book arguing for free trade/globalization? > John Jernigan One of the best books arguing for free trade remains the classic by Henry George, Protection or Free Trade. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Index mutual funds
> If I want to buy shares in the 500 or so companies on the S&P 500, > Should I not invest in stocks at all until > I've raised that much money just so I can save on commissions and fees? > James Why not just buy an S&P index fund? > I've read in the Wall Street Journal that exchange-traded funds are a > better deal than index mutual funds if you have $30,000. If you are able > to accumulate $30,000 in cash every month, then mutual funds don't make > sense. Why would index mutual funds not make sense? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Why do people pick stocks?
--- William Dickens <[EMAIL PROTECTED]> wrote: > There is another reason howevr. Even the lowest cost index mutual funds > have more overhead then you are going to have if you use a discount broker > and buy and hold ... But it is not wise to just buy and hold. Firms can decline and collapse, as we have observed, and stocks need to be closely watched. In contrast, index funds can be held passively, and one only needs to rebalance occasionally. Individual stocks will need to be sold occasionally, and replaced, which costs fees, aside from the monitoring costs. Even indexes replace firms from time to time. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Why do people pick stocks?
> The S&P 500 has just been purged of foreign firms, which apparently > means that scads of index funds will now follow suit - which strikes me > as a bit silly. > Anton Sherwood, http://www.ogre.nu/ Maybe not. Modern Portfolio Theory segregates a portfolio into various categories, and typically US stocks are a category distinct from international or foreign stocks. By purging foreign firms, the S&P becomes a more suitable vehicle for a domestic US index fund. On the other hand, if companies are increasingly global, so that few large firms are significantly "US", then it would be silly. I don't know if that's the case today. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: if coins were rare
--- Gustavo Lacerda <[EMAIL PROTECTED]> wrote: > If the 95% of the coins in the United States (i.e. 1c, 5c, 10c, 25c) were > no longer in circulation, but bills were left alone, what would happen to the remaining coins? > Would they go up in value? Since the US government would not do this on purpose, we need to presume some scenario such as all the coin mints being blown up and some scary news such as that handling coins causes cancer, and some idiotic group going to banks and collecting the coins for hoarding. Then the news is exposed as a hoax. Supposing something ridiculous like that happens, the coins would remain at face value. The demand for small change tokens would be met with a supply of substitutes, such as postage stamps in small clear envelopes, or private tokens issued by banks. During the US Civil War, there was a shortage of coins, and postage stamps served as currency, and they could easily do so again. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Republican Reversal
> These are all good comments on the Republican reversal. Thus, I take it > that the list agrees that democracy works pretty well in reflecting the > wishes of the voters. > Alex I don't agree. What about the large literature on voter ignorance and rent seeking? Does the typical American agree, for example, that it is good policy to spend billions on farm subsidies, or are they just ignorant and apathetic? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: Republican Reversal
--- Alex wrote: > Yes, I believe that the majority of the American public supports > farm subsidies. Why do corporations, lawyers, unions, and other interests provide candidates and elected representatives with millions of dollars of funds and favors if they just vote to satisfy the median voter? Is the literature on rent seeking empirically irrelevant? For example, if the typical American favors subsidies to sugar farmers and does not mind if the domestic price is over twice the world price, and does not care much if candy-making jobs are moving to Canada, why do sugar farmers contribute funds to candidates if the representatives would vote for the subsidy anyway? Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Autos - Get free new car price quotes http://autos.yahoo.com
Re: take-in/eat out
> Is it just me, or does the discount for take-out dining seem way too > low?> Prof. Bryan Caplan Some restaurants subsidize the sit-downs. Starbucks, for example, charges the same for a latte whether it is to go or to drink at a table. Those who sit for hours sipping a venti latte while working on a laptop using not just a table but the company's electricity are way subsidized by the to-go crowd. Evidently the firm makes enough profit selling 50c coffee for $2 so that those at tables can be subsidized, and moreover, a shop filled with coffee drinkers makes it more attractive (it must be really good), so in a way the table rent seekers too contribute, just not in cash. Likewise a full restaurant may increase the to-go demand. I think this is deja-vu. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Health - Feel better, live better http://health.yahoo.com
median voter and financial scandal
If, as I think is evident, lax accounting rules contributed siginficantly to the currrent financial scandals and stock-market decline, then it must be, if the median-voter hypothesis is correct, that the median voter favored such legal larceny as not requiting options to be expensed or not clearly stating that auditing firms also do consulting with the same firm. Since such legalized deception inevitably leads to this kind of grand larceny, the median voter must now be very happy that he got his wish. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Health - Feel better, live better http://health.yahoo.com
Re: median voter and financial scandal
--- Bryan Caplan <[EMAIL PROTECTED]> wrote: > [The median voter] probably passed the whole year without even remembering > the existence of accounting regulations! The median voter thus favored > the status quo by default. That is somewhat toward my point. But it's not that Mr. Median "favored" the status quo by default. Rather, he was ignorant and apathetic about it. He didn't know enough to favor it or not, and did not have the incentive to find out. Only when disaster happens does Mr. Median become aroused enough to "favor" a policy. As I see it, the three segments of political arousal are antipathy, sympathy, and apathy. Mr. Median "favors" a policy when he is in the first two, and is out of the picture in the last one, apathy. That is when the special interest can have their way. Mr. Median, having lost a fortune, is now antipathetic towards the corporate evil doers, and hence sympathetic towards reform. Only in such cases can the moneyed interests be overcome. Fred Foldvary = [EMAIL PROTECTED] __ Do You Yahoo!? Yahoo! Health - Feel better, live better http://health.yahoo.com
