Archive for September, 2011

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Sustainable China

Wednesday, September 28th, 2011

As many of you know, Lawrence received a grant from the Luce Foundation to explore a program we call Sustainable China: Integrating Culture, Conservation, and Commerce.  Thursday and Friday we will be hosting two visitors from the Karst Institute at Guizhou Normal University in Guiyang, China.  They will be giving a  talk on Friday afternoon at 3:10 in Steitz 102 and are available for Q & A after the talk.  Please below for details or green posters in various spots in Briggs Hall.

Sustainable China:  Integrating Culture, Conservation and Commerce

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Ren Xiaodong

Professor at the Institute of South China Karst and Director of the Community-Based Conservation and Research Development Center at

Guizhou Normal University

“Integrated Management of Nature Reserves in Guizhou Province”

Professor Ren will discuss efforts to incorporate a variety of stakeholders in the management of the Chishui Nature Reserve.  The reserve is a national treasure as well as the source of water for the Moutai Liquor.

Zhou Zongfa

Vice Dean Institute of South China Karst and Professor in School of Geography and Biological Science at Guizhou Normal University

“Use of Geographic Information Systems (GIS) for the study of Karst and Caves in Guizhou Province”

Professor Zhou will address how GIS systems help identify the characteristics of sedimentary rocks in China which will assist decision-makers in evaluating the effects of and planning for future economic development in Guizhou Province.

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Friday, September 30th

3:10pm

Steitz Hall 102

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Less than Peak Perfomance

Tuesday, September 27th, 2011

Following an earlier post on Daniel Yergin’s piece in the Wall Street Journal (promoting his new book), I came across James Hamilton‘s response to Yergin’s basic argument.  I use Hamilton as a primary source for teaching the resources piece of my Environmental Economics class, and he is an important player in the public debate.

Next up, we have a Michael Gilberson post that provides an overview of the issues and going through Hamilton’s critique of Yergin.  I find his response particularly useful because he gets at why peak oil might be an issue worth worrying about, and also has a section devoted to “supply and demand: boring and relevant.”  He prefaces his supply and demand discussion with this:

Hamilton draws attention to the slow rate of the supply response relative to demand growth. He is right, this is where the action is with respect to understanding recent oil market developments … and nothing about what he said depends upon whether the peak in world oil production did happen in 2005 or 2007, or will happen in 2011, or won’t happen until 2100 … and framing remarks as about peak oil distracts attention from the real issues.

Indeed.  For those of you who attended the LSB session on petroleum last year certainly know that people with money in the energy industry pay very close attention to supply and demand fundamentals.

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Sustainable Energy without the Hot Air

Monday, September 26th, 2011

Sustainable Energy - without the hot airEsteemed alumnus Thomas Baer has been making the rounds on campus, visiting the I&E class and delivering a nice Science Hall Colloquium earlier today (here’s his bio).  Dr. Baer gave a rundown of his perspective on renewable energy technologies, particularly solar energy, and even more particularly solar energy made with silicon.

I’ll spare you the details of the role of photonics (since I didn’t quite understand those details), but I will second his recommendation of David MacKay’s excellent Sustainable Energy Without the Hot Air. I bought several copies of this and generally loan them out to anyone interested in energy policy.  Indeed, I was working with another colleague on developing a course around the book prior to moving to Lawrence a couple of years back.

If you haven’t borrowed my book already, you can download a copy here.

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Posted in Economics Resources | 1 Comment »

September Newsletter, Report from the Chair

Monday, September 26th, 2011

The Economics Department Newsletter is up and ready for action.   Though I am not the Chair, I am privy to his Report.

Here’s the teaser:

Report from the Chair

Marty Finkler imageMarty Finkler, professor of economics and John R. Kimberly Distinguished Professor in the American Economic System
Like a shark, the Economics department has to move forward in order to survive. The department has added new personnel, helped launch the Lawrence Scholars in Business program, and is introducing a new Innovation & Entrepreneurship emphasis to its curriculum. Department Chair Marty Finkler runs down these activities and invites your input.
Read more…

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Calculus Review

Monday, September 26th, 2011

For those of you who need a little refresher, tell them the good people on Briggs 2nd sent you.

CTL math tutors will be holding several calculus review sessions designed for students who want to “brush up” on critical skills used in classes including: Calculus II and III as well as various chemistry and physics courses.  Workshops will cover the basics of integrals or derivatives and will be held in Briggs 420 at the following dates/times.  If you have questions, please contact Julie Haurykiewicz, CTL Director.  Thanks!

Derivative Reviews:

Wednesday, September 28 at 9 p.m.

Monday, October 3, at 8:30 p.m.  The integraDerivatives

Integral Reviews:

Thursday, September 29 at 8:00pm
Tuesday, October 4 at 7:00pm

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The Piece I’ve Been Expecting about Robert Lucas

Sunday, September 25th, 2011

The Wall Street Journal has a short profile of Robert Lucas,  one of the most influential macroeconomists of at least the past 20 years (when I picked up my first grad macro text).  Lucas is probably best known for integrating “rational expectations” into macro models (he convinced his wife, at least).  He is also the namesake of the “Lucas Critique”  of using past behavior to predict the future.   Here’s a nice summary of his contributions.

Lucas might sound like someone affiliated with the Chicago School, and indeed, that is the case.  Someone you should know.

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Excessive Monetary Easing is Part of the Problem

Friday, September 23rd, 2011

If short term interest rates drop from .1% to .02% does it generate more economic activity?  If long term rates drop from 3% to 2% (or even 1.7% as with 10 year US Treasury Notes), will people want to borrow more given the current economic environment?  Most readers know my pessimism regarding answers to these questions.  The IMF, in its latest global financial stability report, makes the case quite strongly.  Furthermore, as argued previously and by most “Austrians” since Mises and Hayek, overly cheap capital causes a great deal of mis-allocation of capital.  The Financial Times editorial today summarizes the IMF report.

The IMF’s latest global financial stability report says rightly enough that the eurozone crisis, and the row over the US debt ceiling, sparked an increase in risk aversion. But the IMF worries that exceptionally low interest rates are building a fresh credit problem. They have spurred a hunt for yield which, as widely broadcast, has sent too much capital to emerging markets. When capital is too cheap, it is mis-allocated.

The FT editorial concludes:

Either credit markets see reasons for economic cheer that have eluded everyone else, or low interest rates have sparked another round of irresponsible lending.

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Posted in Class Notes, General Interest | Comments Off

Tax them Back to the Stone Age!

Wednesday, September 21st, 2011

Click to Enlarge

Do you think we should increase taxes on the rich?  Most of us do, to the tune of about a 70-30 split in favor of bumping up those taxes.  But what does that mean, exactly?

Reason Online takes up this question by asking people how high someone’s income has to be before they are rich.  Not surprisingly,  the answer depends on who you ask.  If you ask someone with an income less than $50,000, the median response is that $200,000 a year is rich, but even $100,000 seems rich to a significant fraction of that cohort.  On the other hand, if you ask someone who earns between $100,000 and $200,000, the response is that it takes $300,000 before you are rich.

A better survey question might be, should we raise taxes on people with incomes over $200,000?  My guess is you might still get majority support, with substantial defection from those at and round $200,000 a year.

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DS-391 On the Road with Hayek, Reminder

Tuesday, September 20th, 2011

Those of you interested in signing up for the group read of The Road to Serfdom need to turn in your registration forms and get your schedules to Professor Galambos or me so we can coordinate a meeting time.  We will likely have our first meeting during the first week in October and cover the first 50 or 60 pages of the book at that time.

If you have any questions, stop by Briggs 2nd for some answers.

Here is our previous post on the group, including some auxiliary and supplementary materials.

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Blooming entrepreneurship

Tuesday, September 20th, 2011

If you’d like to find a shining example of an entrepreneur who is a Lawrentian (and an Economics major to boot), I suggest you google Abir Sen. The most recent news item that will show up is this Bloomberg report announcing that WellPoint, the largest insurer, is buying most of Bloom Health, which Abir founded and has been leading as CEO. Before this venture, he co-founded RedBrick Health, another innovative health care company. But wait, there is more. From the Bloom Health website:

Before co-founding RedBrick Health, Abir co-founded Definity Health and was part of the team that invented the Personal Care Account, the predecessor to the Health Savings Account. Abir has also worked as an advisor to Fidelity Investment’s Health and Welfare Business, where he helped launch Fidelity’s benefit consulting business. He began his career at Deloitte Consulting, where he advised large managed care organizations and integrated delivery systems on M&A and turnaround strategies.

Abir has a B.A. in Economics from Lawrence University and an M.B.A. from the Harvard Business School. Other than health care, Abir’s interests include aviation, border collies and U2.

Those of you who have had the chance to meet him on campus know that he is a great guy to talk to. He is a great believer in the liberal arts education, which he has been able to apply to solving problems in the world. If we’re lucky, we might see him on campus again this year, so look for his name on this channel.

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Posted in Entrepreneurship, Innovation, Life after Lawrence | Comments Off

Unstandard Oil

Tuesday, September 20th, 2011

Because it's there?

Many of you have probably heard of “peak oil,” the idea that world oil production either has peaked or will soon peak, and it’s all downhill from there.  The implications of this could be that the world economy is crippled by high prices and short supply, or the world economy is not crippled by high prices and short supply.  In either case, most folks I talk with seem to believe we will soon be facing resource constraints.

Well, Daniel Yergin, author of the cinder-block-sized epic The Prize (now in documentary form) is back with his take on peak oil.  The condensed version of his argument — puh-leeze.

In his piece, Yergin goes over the basic storyline of so-called “cornucopian”  economists, such as the late Julian Simon, who claim that human ingenuity is likely to overcome any “natural” resource constraints.  Here’s Yergin on the premiere peak oiler, M. King Hubbert:

Hubbert insisted that price didn’t matter. Economics—the forces of supply and demand—were, he maintained, irrelevant to the finite physical cache of oil in the earth. But why would price—with all the messages that it sends to people about allocating resources and developing new technologies—apply in so many other realms but not in oil and gas production? Activity goes up when prices go up; activity goes down when prices go down. Higher prices stimulate innovation and encourage people to figure out ingenious new ways to increase supply.

Indeed.

New technologies and approaches continue to unlock new resources. Ghana is on its way to significant oil production, and just a few days ago, a major new discovery was announced off the coast of French Guiana, north of Brazil.

As proof for peak oil, its advocates argue that the discovery rate for new oil fields is declining. But this obscures a crucial point: Most of the world’s supply is the result not of discoveries but of additions and extensions in existing fields.

In addition to the WSJ piece, Yergin is back in print with The Quest: Energy, Security and the Remaking of the Modern World. If you are interested in third-party opinions, Steven Hayward has a column in the WSJ, and Steven Levine reviews the book for Foreign Policy.

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Talk Like a Pirate Day

Monday, September 19th, 2011

It’s Talk Like a Pirate Day over at The Mudd, and elsewhere.

As I told you last year, Peter Leeson has an excellent series of papers on piratical organization, including The Invisible Hook, an economic analysis of piratical organization.  You can also check out the JPE piece it was based on or simply get a flavor from one of its many favorable reviews.

Here’s the gist:

The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends.

Certainly the big eye opener is that classic pirates had democratic governance structures.  I would guess that most organized crime we think of today — including modern-day pirates is more conventionally hierarchical.  Watch for this in Econ 450.

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The Health Care Arms Race

Friday, September 16th, 2011

Are you a fan of Dr. Seuss?  If so, you must see this new video on health care costs done in the style of the good doctor.  If not, watch it anyway.  It displays what happens when supply drives demand, and demand is fueled by third party funding.  Yes, those of you in Money and Monetary Policy will recognize the OPM principle at work:  people spend Other People’s Money much differently than they do their own.  Another principle is also involved.  The creation of jobs for jobs sake is not sustainable.  “Oh, The Jobs You Create” becomes “Oh, The Debt You Create.”  Enjoy.

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The Appletown Coffee Experience

Tuesday, September 13th, 2011

Sports Illustrated‘s Peter King gives a big thumbs up to downtown Appleton:

What a good coffee town Appleton, Wisc., is. In a two-block stretch of downtown on College Avenue (I once had night-before-the-game dinner with Bears linebacker Ron Rivera in an Italian place on this street), there are local espresso places — the trendy and modern Copper Rock, the homey and filled-with-locals Brewed Awakenings — and if those aren’t good enough for you, there’s a Starbucks on the corner. I can’t imagine there’s a better downtown coffee experience in a medium-sized, middle America city.

No mention of Gerardo’s stash on Briggs 2nd.

HT to our wonderful alumni network.

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The Center for Teaching and Learning Workshops

Tuesday, September 13th, 2011

Here it comes, our tri-annual message on CTL Workshops:

If you think a Cartesian coordinate is a what you wear to go with your favorite sweater, it might be time for you to bone up on your quantitative skills.  And, right on cue, the CTL if offering a series of quantitative workshops — 90 minutes to a better, more quantitatively adept you.   The topics are basic algebra, graphs, and word problems, and there are two chances for each.

Workshops are in Briggs 420 and run 60 minutes.

Algebra

8:00 PM on Tuesday, September 20th and 6:00 PM on Monday, September 26th

The algebra workshop will cover the following topics:

  • Basic algebraic operations and the law of exponents
  • Binomial multiplication and factorization
  • Important algebraic identities
  • Techniques for solving quadratic and fractional systems of linear equations
  • Basic concepts and identities of trigonometry

Graphs

8:00 PM on Friday, September 23rd and 5:00 PM on Tuesday, September 27th

The graphing workshop will cover the following topics:

  • Graphs of linear equations, quadratic equations, exponential functions, trigonometric functions and more…
  • Significance of slope in various applications
  • Displacement of graphs

Word Problems

6:00 PM on Thursday, September 22nd and 8:00 PM on Wednesday, September 28th

The word problem workshop will cover the following topics:

  • Problem solving strategies useful in working with quantitative concepts
  • How to extract useful information from a problem and how to relate similar problems
  • Hands-on experience working on interesting and challenging word problems

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