Monday, August 13, 2007
Thursday, August 9, 2007
Bush disses gas tax hike idea
Bush apparently is no pigovian in terms of the gas tax idea....
Granted the idea wouldn't have been revenue neutral (but still, assuming people place good value on bridge safety - it's in a sense giving back to the people...).
Granted the idea wouldn't have been revenue neutral (but still, assuming people place good value on bridge safety - it's in a sense giving back to the people...).
Wednesday, August 8, 2007
US releases Economics Education Report Card
The study conducted by the US. Dept. of Education is the first ever National Assessment of Educational Progress - and is a measure of national knowledge of economics by 12th graders in the US. I saw the Fed Reserve Chair from Minneapolis comment on the results...his assessment is rosier than mine. He says the fact that 42% of the sample were 'proficient' in economics is a "good base." I tend to look at the glass being half empty on this - there's a lot of room for improvement.
About 79% of students scored at the "basic" level - having a rudementary knowlege of some econ concepts. I don't think that is too bad, but again, still a lot of room for growth.
One of the more interesting findings is that males tend to only slightly outperform females in econ. I would expect that to be true given the more mathematical/logical nature of the way econ is often taught. But it's surprising to me how close the genders performed. I would have thought the gap to be much higher. I do think it is meaningful that the gap widens at the higher levels of proficiency - and I would expect this is a foreshadow of college results - as more math is applied to econ in advanced levels, males should tend to increasingly dominate.
The basic "scores" are as follows (discussing micro, macro, and international econ topics):
Download the whole report here.
About 79% of students scored at the "basic" level - having a rudementary knowlege of some econ concepts. I don't think that is too bad, but again, still a lot of room for growth.
One of the more interesting findings is that males tend to only slightly outperform females in econ. I would expect that to be true given the more mathematical/logical nature of the way econ is often taught. But it's surprising to me how close the genders performed. I would have thought the gap to be much higher. I do think it is meaningful that the gap widens at the higher levels of proficiency - and I would expect this is a foreshadow of college results - as more math is applied to econ in advanced levels, males should tend to increasingly dominate.
The basic "scores" are as follows (discussing micro, macro, and international econ topics):
| Market Economy |
| 72% described a benefit and a risk of leaving a full-time job to further one’s education |
| 52% identified how commercial banks use money deposited into customers’ checking accounts |
| 46% interpreted a supply and demand graph to determine the effect of establishing a price control |
| 36% used marginal analysis to determine how a business could maximize its profits |
| National Economy |
| 60% identified factors that lead to an increase in the national debt |
| 36% identified the federal government’s primary source of revenue |
| 33% explained the effect of an increase in real interest rates on consumers’ borrowing |
| 11% analyzed how a change in the unemployment rate affects income, spending, and production |
| International Economy |
| 63% determined the impact of a decrease in oil production on oil-importing countries |
| 51% determined a result of removing trade barriers between two countries |
| 40% determined why industries can successfully lobby for tariff protection |
| 32% identified how investment in education can impact economic growth |
Download the whole report here.
Are there significant externalities to marijuana smoking?
I comment on this at Mike Moffat's blog (about.com).
I think it's pretty obvious that there are some negative and positive externalities...the question is, which is dominant, and is that dominance substantial? I'd love to hear your thoughts on that....
In general though, Mike is right - people who don't support the carbon tax should either help contribute to a solution to our environmental issues, dependency on gas (to live basically), etc...or, just keep silent. Saying the pigou club is wrong without offering an alternative to our current policies (which doesn't appear to be working) is not particularly useful.
This also though points to a general problem with Pigovian taxation (despite its benefits to efficiency) and that is, we almost never know what the social costs or benefits are to an externality - and often our studies can be biased one way or the other, or grossly miscalculating the benefits or cost...this makes using pigovian taxation tricky.
If you under-tax - you may be adding little benefit to reducing a negative externality at the expense of a higher tax that may or may not be passed back to consumers.
If you over-tax, you are likely doing more harm than good.
I think it's pretty obvious that there are some negative and positive externalities...the question is, which is dominant, and is that dominance substantial? I'd love to hear your thoughts on that....
In general though, Mike is right - people who don't support the carbon tax should either help contribute to a solution to our environmental issues, dependency on gas (to live basically), etc...or, just keep silent. Saying the pigou club is wrong without offering an alternative to our current policies (which doesn't appear to be working) is not particularly useful.
This also though points to a general problem with Pigovian taxation (despite its benefits to efficiency) and that is, we almost never know what the social costs or benefits are to an externality - and often our studies can be biased one way or the other, or grossly miscalculating the benefits or cost...this makes using pigovian taxation tricky.
If you under-tax - you may be adding little benefit to reducing a negative externality at the expense of a higher tax that may or may not be passed back to consumers.
If you over-tax, you are likely doing more harm than good.
Monday, August 6, 2007
Book Review Pending
I am currently reading Steven Cohn's: "Reintroducing Macroeconomics: A Critical Approach."
The book is a heterodox economic critique of mainstream macro thought that is taught in today's classes. I hope to use the book along with Mankiw's mainstream text to help with a point-counterpoint way of teaching this fall.
I can imagine that will be difficult as I tried somewhat last year to broaden the discussion beyond the mainstream (to include some post-keynesinan ideas, contributions of psychology, ran some class experiments...) to some success, but also some confusion by the students.
I still don't know how best to broaden the scope while simultaneously cover all the necessary mainstream topics for the common final exam. It may be impossible; I don't know. Anybody with any thoughts please let me know. Look for my review of Cohn's book in a week or two.
The book is a heterodox economic critique of mainstream macro thought that is taught in today's classes. I hope to use the book along with Mankiw's mainstream text to help with a point-counterpoint way of teaching this fall.
I can imagine that will be difficult as I tried somewhat last year to broaden the discussion beyond the mainstream (to include some post-keynesinan ideas, contributions of psychology, ran some class experiments...) to some success, but also some confusion by the students.
I still don't know how best to broaden the scope while simultaneously cover all the necessary mainstream topics for the common final exam. It may be impossible; I don't know. Anybody with any thoughts please let me know. Look for my review of Cohn's book in a week or two.
Thursday, August 2, 2007
Another example of economics stumbling over itself
As a follow-up to my most recent post, I came across this which talks about when it is rational to vote in elections. This is just something I came across, and I'm sure there are others. This has been a hot topic in economics and game theory for more than a decade now.
In fact, I remember one of my econ profs during my undergrad days talking about this talking and talking about how he was completely dumbfounded by the idea that people voted - he just didn't understand why they would. Afterall, "rational" people think at the margin, and voting is hardly an excercise where one vote counts for much.
And I remember thinking at the time, "uhh, what's so hard to understand? Do economists really think people really go to vote JUST for the purpose of hoping to help enact X legislation or install Y governor? How ridiculous.
People of course vote for numerous reasons including: something to do, feelings of patriotism, feelings of community, an excuse to take off work and not feel guilty... ie, the additional costs of transport, lost wage, and/or time are exceeded by the benefits of all the mentioned items plus I'm sure others. Of course voters are rational --- just not confined to the small space that some economists want to put them in. This is just a typical case of an economist's assumption (that a person votes only for reason X) being, well, just plain silly. But notice feelings of community etc are not things easily modeled by math, hence the reason economists tend to ignore that and the like.
In fact, I remember one of my econ profs during my undergrad days talking about this talking and talking about how he was completely dumbfounded by the idea that people voted - he just didn't understand why they would. Afterall, "rational" people think at the margin, and voting is hardly an excercise where one vote counts for much.
And I remember thinking at the time, "uhh, what's so hard to understand? Do economists really think people really go to vote JUST for the purpose of hoping to help enact X legislation or install Y governor? How ridiculous.
People of course vote for numerous reasons including: something to do, feelings of patriotism, feelings of community, an excuse to take off work and not feel guilty... ie, the additional costs of transport, lost wage, and/or time are exceeded by the benefits of all the mentioned items plus I'm sure others. Of course voters are rational --- just not confined to the small space that some economists want to put them in. This is just a typical case of an economist's assumption (that a person votes only for reason X) being, well, just plain silly. But notice feelings of community etc are not things easily modeled by math, hence the reason economists tend to ignore that and the like.
Wednesday, August 1, 2007
Why Can't We All Just Get Along (and learn from each other)
To show the inappropriateness of accusing an entire social science of poor science while ignoring your own science’s shortcomings (…without sin cast the first stone…), I would like to sarcasstically point out the following:
Would a psychologist reduce human market behavior to marginal cost and benefit? Would a psychologist reduce most research to rigid mathematical models while avoiding social situational issues? Would a psychologist look down from their Ivory Tower and bemoan economists as being inferior and less rigourous in their analysis?
Maybe, maybe not...but economists don't seem to have problem doing the same to psychology.
My question - Why can't an economist be more like a psychologist? Why can't economists be more like that.
Would a psychologist reduce human market behavior to marginal cost and benefit? Would a psychologist reduce most research to rigid mathematical models while avoiding social situational issues? Would a psychologist look down from their Ivory Tower and bemoan economists as being inferior and less rigourous in their analysis?
Maybe, maybe not...but economists don't seem to have problem doing the same to psychology.
My question - Why can't an economist be more like a psychologist? Why can't economists be more like that.
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