General Interest

Category: General Interest

The Triumph of Ed Glaeser

For those of you who are concerned that I don’t blog enough about economist Edward Glaeser, this post is for you.  I finally got around to finishing up his New York Times bestseller, Triumph of the City,  and it is indeed a triumph.  The tagline and thesis is “How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier,” with “the city” being the greatest invention. It’s a provocative read, and Glaeser’s argument will have you nodding your head one way or the other throughout the book.

Certainly, the book covers a lot of ground. If you’ve ever wondered why cities are where they are, he covers that.  If you want to know why cities like Buffalo, Cleveland, Pittsburgh have depopulated — and why many urban renewal efforts are destined for failure –he covers that, too. But perhaps the most interesting and most debatable subjects are in the environmental arena.  Glaeser spends several chapters on topics such as the “antiurban public policy trifecta” that foments urban sprawl — healthy highway funding budgets, the home mortgage interest deduction, and poor inner-city schools.  While many progressives might nod their head in agreement, they might be surprised to hear Glaeser take down of high housing prices in many urban areas as “the handiwork of regulation, not nature” (p. 191).  Indeed, Glaeser leverages this point in his comparison of Houston to New York City in terms of affordability (pp. 183-193), which is a very compelling explanation as to why we observe greater population growth in the southern U.S.

Really great stuff.

One of the marvelous aspects of the book is that Glaeser is not constrained to the format of the academic research paper, and consequently gets to show off how much he actually knows about his subject matter. There are a number of fascinating anecdotes and story lines as he proceeds to summarize and synthesize vast swaths of the urban economics literature –the paperback features 30 pages of endnotes and a 17-page research bibliography!

For a taste of Glaeser’s writing for the popular audience, you might check out his piece “Green Cities, Brown Suburbs” at the City Journal site.

I would pretty much recommend the book to anyone who might be interested in urban economics and the rise and decline of cities.  I also found myself marking down some of the academic papers that look to be of particular interest. Here’s a taste:

Matias Busso & Patrick Kline “Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program,” Forthcoming in American Economic Journal: Economic Policy.

Raymond Fisman (2001) ‘Estimating the Value of Political Connections,” American Economic Review , 91(4):1095-1102

Edward L. Glaeser (1998) “Are Cities Dying?” Journal of Economic Perspectives, 12(2): 139–160.

Joshua D. Gottlieb & Edward L. Glaeser (2006) “Urban Resurgence and the Consumer City” Urban Studies 43(8): 1275-1299.

Edward L. Glaeser, Joseph Gyourko, & Albert Saiz. 2008.”Housing supply and housing bubbles,” Journal of Urban Economics.64(2): 198-217.

Edward L. Glaeser & Kahn, Matthew E., (2010) “The greenness of cities: Carbon dioxide emissions and urban development,” Journal of Urban Economics 67(3):404-418.

Edward L. Glaeser and, Bruce Sacerdote (1999) “Why Is There More Crime in Cities?” Journal of Political Economy  107(6): S225-S258.

Edward L. Glaeser, Jenny Schuetz, Bryce A. Ward (2006) Regulation and the Rise of Housing Prices in Greater Boston: A Study Based on New Data from 187 Communities in Eastern Massachusetts, Pioneer Institute for Public Policy Research,

Andrew Haughwout, Robert Inman, Steven Craig, Thomas Luce (2004) “Local Revenue Hills: Evidence from Four U.S. Cities,” The Review of Economics and Statistics 86(2): 570-585.

Thomas J. Holmes (1998) “The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders,” Journal of Political Economy  106(4):667-705

Lawrence Katz and Kenneth T. Rosen (1987) “The Interjurisdictional Effects of Growth Controls on Housing Prices,” Journal of Law and Economics. 30(1):149-160

If anyone is interested in reading through a sample of these, this would make a very nice directed study project.

77 Cents is really more Like 91 Cents, but It’s Still Not a Dollar

Here is a very interesting interview with leading labor economist Francine Blau’s at The Atlantic Monthly about differences between male and female pay.

The topic is one that you have probably heard before — “women only make 77 cents for every dollar men make.”  Now why would that be?  Is it because of discrimination?

Many economists discount the idea that discrimination is the driver, because bigotry is such an expensive vice.  Consider the following: Suppose Bigoted Bob’s hires only men and has annual labor costs of $100 million per year.  If the difference in male and female earnings is due solely to discrimination, then it should be possible to hire a staff of women who are exactly the same quality and produce exactly the same quality and quantity of output for only $77 million per year.  So, it hardly takes benevolence to hire women — simple greed, er, profit maximization will do — the “benevolent” employer can presumably pocket the $23 million in labor savings!  In other words, a business that wants to exercise its discriminatory preferences for men over women for whatever reason will have to pay a steep price on the labor market.

So, perhaps it’s some other factors, and this is partly true.  If you control for human capital accumulation (education and experience, for example) and industry choice, the gap is less than the largely purported, but there is still a gap of about nine cents on a dollar. In other words, controlling for what we control for, women only make 91 cents for every dollar men make.

You might also take a look at this WSJ piece on the pay to female executives.  Hmm.

Money in the Market

There has been a recent spate of students asking me for advice on how to “invest” their extra money.   My initial reaction has generally been “in a better hair cut,” but it is probably also useful to tell them how economists think about what’s going on in the equities and securities markets.

So, in that spirit, here are a couple of introductory readings that I would recommend, all available in The Mudd or free online:

Steven Landsburg, “Random Walks and Stock Market Prices: A Primer for Investors,” in The Armchair Economist (initial publication in 1993, updated “for the 21st century” in 2012).

Burton Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (most recent edition in 2007).

Burton Malkiel, “The Efficient Market Hypothesis and Its Critics,” Journal of Economic Perspectives, 17(1):59-82

Robert J. Shiller “From Efficient Markets Theory to Behavioral Finance,” Journal of Economic Perspectives, 17(1): 83–104.

Again, these are simply very good accounts of how mainstream economists view the financial world, so this is not an endorsement of any particular investment strategy and shouldn’t be taken as investment advice.

Unless it works, in which case by all means I’m happy to take credit.

Nobel Winners: Game Set Match

The Nobels go to Alvin Roth and Lloyd Shapley for their work on matching and/or market design; that is, markets without prices.

Professor Galambos was talking about Roth’s work in our community read this last week, and Alex Tabarrok has a lot more here.  Here’s an accessible piece on matching kids to schools. Here’s the famous Gale-Shapley piece on college admissions and marriage.

In a related note, I often use Roth’s JEP excellent repugnance piece in my public policy classes.

Here’s Al Roth’s excellent blog.

A complement, not a substitute, we hope.

Well, no winners in our guess the Nobel contest, so the prizes will be rolled over into next year’s contest.

Schumptoberfest 2012

Schumptoberfest 2012 is taking place this weekend on the Grinnell College campus.  We started this back in 2010 with a group of students as a Bjorklunden retreat, and for the past two years the Associated Colleges of the Midwest has provided funding to bring in faculty and students to talk about innovation and entrepreneurship in the liberal arts curriculum.

This year’s keynote comes from Columbia Business School’s Ray Horton, “The Utility of Schumpeter’s Conception of Entrepreneurship Then and Now.”  It will be interesting to hear what he has to day.

Lawrence will also have a solid presence.  The Flickey guys will be talking about the fruits of the Pursuit of Innovation course, which was the subject of a nice This is Lawrence feature.   Babajide Ademola and Patrick Pylvainen will also talk about their work looking at innovation & entrepreneurship in post-conflict Sierra Leone.  You can learn about Professor Skran’s work there in this This is Lawrence video.

You can read  more at the LU homepage or on the Grinnell homepage.

Pick the Nobel Update

Here is some more information on the possible Nobel winners in economics from Tyler Cowen and the guys at the Cheap Talk blog.   Cowen picks the trifecta of Fama, Shiller, and Richard Thaler.

The Cheap Talkers show us the picks from the Kellogg School’s annual pool, which has Oliver Hart (of Grossman & Hart and Hart & Moore fame) and Jean Tirole (of Tirole fame) as odds-on favorites.  However, the bloggers note the IO bias at Kellogg, and provide a far more sophisticated assessment:

While I think all these researchers will get this prize eventually, their age works against them – they are too young.  they did seminal work at a time when Duran Duran ruled the airwaves or perhaps the Smiths in the case of Tirole.  The Nobel Committee is still sorting out the time when ABBA was Number One and Bjorn Borg won Wimbledon. (Note Swedish influence on pop culture was high in the 1970s!)

Indeed.

Though, I don’t think The Smiths ever “ruled” the airwaves.

Here’s the previous post.  Make your picks in the comments thread or yell them at me as I walk by you at the WCC.

Be Careful What You Ask For

Have you heard the one about the Frenchman who asked for higher taxes on himself?

A little over a year ago, some of the most prominent and wealthy executives in France signed a petition seeking higher taxes on themselves. Yes, higher taxes…

You may know what happened next: François Hollande, the country’s socialist president, proposed a 75 percent marginal tax rate on all income over $1.3 million. (The highest marginal tax rate on the first $1.3 million would be 45 percent, up from 41 percent.) Marginal tax rates on capital gains would rise to as much as about 60 percent.

Now many of the nation’s wealthiest executives — including some who signed the original petition — and entrepreneurs, private equity managers and others who are millionaires, or want to become millionaires, are crying foul. In a sign that executives are moving, or threatening to move, to lower-taxed countries, high-end real estate in Paris is being thrown on the market.

Another post that would seem to speak for itself, except for this:

The purpose of the tax is more populist than mathematical: the marginal income tax increase is estimated to raise only about $300 million.

To give that some perspective, France’s budget deficit last year was on the order of $150 billion, so $300 million is equivalent to about 0.2% of the shortfall.

Predict the Economics Nobel Prize

UPDATE: Professor Gerard picks Paul Romer,  Professor Finkler picks Romer and William Baumol (both at Stern!), Professor Galambos still undecided, see comments for additional picks.

Anxiously Awaiting the Announcement

The 2012 Nobel Prize in Economic Sciences will be announced on Monday 15 October, and once again all the world is riveted in anticipation. The riveted parties include those residing on Briggs 2nd, where we will once again sponsor a Predict the Nobel Prize Contest, with the winner to take home some fabulous prizes.

I don’t see any formal odds online yet, but Thomson Reuters provides some thoughts on Steven Ross for arbitrage pricing theory, Robert Schiller for work on market volatility, and Anthony Atkinson & Angus Deaton for the famous Atkinson & Deaton work on income, consumption, and well-being.

So, submit your pick to Prof Gerard prior to October 15, keeping in mind that the Nobel winner will not necessarily come from that draw (Of course, I’m still partial to Armen Alchian, and I have to believe Jerry Hausman will win sooner or later).  You can also post them in the comments, first come, first serve.

 

For further reading:

Robert J. Shiller 2003. “From Efficient Markets Theory to Behavioral Finance,” Journal of Economic Perspectives, 17(1): 83–104.

Stephen A.  Ross, 2004 “Review of The New Financial Order by Shiller,” Journal of Economic Literature, 42(4): 1098–1101.

Angus Deaton 2008. “Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll,” Journal of Economic Perspectives, 22(2): 53–72.

 

The Morality of Markets

Here is our schedule for the term:

October 4th 11:10–12:20       Ethics, Efficiency, and Markets, up to page 103

October 25th 11:10–12:20            What Money Can’t Buy, Chapter 1

November 1st 11:10–12:20      What Money Can’t Buy, Chapter 2

November 8th 11:10–12:20      What Money Can’t Buy, Chapter 3

November 15th 11:10–12:20     What Money Can’t Buy, Chapters 4, 5.

The reading for the first meeting  (10/4)  is 100 pages, and for subsequent meetings it is about 50 pages each. The first reading, Ethics, Efficiency, and Markets, is available for purchase as an online book, you can order used copies, or you can download it from this website: http://en.bookfi.org/book/1172337. The first chapter in that book is a short introduction in which basic notions are established; Chapter 2 will review several arguments that you will be familiar with from your economics classes; and Chapter 3 is the most significant for our discussion. Be prepared to state succinctly the moral arguments for and against the market. You have over two weeks to cover the 100 pages, which should not be too taxing. This first reading should give us some ammunition for our discussions of the second book.

Simplicity vs. Complexity : It’s Not That Simple

Everyone knows that the Dodd-Frank law passed in 2010 to regulate the financial industry is incredibly complex.  As those who took  Money and Monetary Policy last fall learned from alum Jim Lyon, it will take years just to write the implementation provisions.  Furthermore, these provisions will be influenced significantly by those (especially in the banking industry) whose behavior will be affected.

Andrew Haldane, in the most recent Kansas City Federal Reserve Bank symposium in an article entitled “The Dog and the Frisbee”, argues that such complexity is far from optimal in an economic environment in which uncertainty prevails.  He uses the concept of uncertainty in the same way that Frank Knight and John Maynard Keynes did almost a century ago; that is, situations in which assessing the probability of different outcomes is quite low and that risk cannot be easily measured and therefore, hedged against.  Haldane argues for simple rules, such as existed under the Glass-Steagall Act which forbids the mixing of commercial and investment banking.

In a recent blog entry on the EconoMonitor, Ed Dolan analyses this argument in terms of Goodhart’s Law, which suggests that as soon as a particular indicator becomes an explicit policy variable, it loses its predictive power because economic agents change their actions in response to expectations of the  authorities using this indicator for policy action.  Some of you might recall this as a variation of the Lucas critique of traditional monetary and fiscal policy actions.

All of the above is prologue for our next Economics Colloquium to be held next Monday.  Our visitor, 1971 Lawrence alum, Elijah Brewer, will address the topic “Regulating Wall Street:  Did We Go Too Far?”  Be sure to come to his talk at 4:30 PM, Monday, October 8th in Steitz Hall 102.

 

People, It is a Commodities Boom

If you didn’t know already, the U.S. and many other parts of the world are amidst an epic energy boom that has sent natural gas prices tumbling.  One back-of-the envelope calculation suggests that consumers have benefited to the tune of more than $100 billion (that’s a lot); another suggests it’s more like $300 billion annually (that’s even more).

So, with that in mind, which group of graduates on average do you think earned a higher starting salary last year — those from Harvard University or those from the South Dakota School of Mines & Technology?

Answer here, if you haven’t already guessed.

Plenty more at Mark Perry’s blog.

Professor, What’s Another Name for Pirate Treasure?

It’s Talk Like a Pirate Day, and here’s my annual plug to visit The Mudd’s witty homepage — more than a laugh a minute — and also to check out Peter Leeson’s excellent work s on piratical organization, The Invisible Hook.

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

If you don’t have time to read the whole book today, you can read one of the many favorable reviews instead.   For the more scholarly version, check out Leeson’s original Journal of Political Economy piece.

Playing the Percentiles

You are likely to be many, many discussions about income inequality, redistribution, and the state of the “middle class” in the coming months.  There was all sorts of hubbub last week when presidential candidate Mitt Romney said that families making between $200,00 and $250,000 were part of the middle class.

Could Romney be correct?

Off the top of my head, I really don’t know whether that is true or not.

There are different ways to break down income, but some of the standard are by individual, family, and household.  If you take a look at the median (middle) value, the median individual income is about $26,500 and the average income is closer to $40,000.  The average is greater than the median because people with high salaries drag the distribution out to the right.

At the household level, the median household is about $50,000 per year, again indicating that half of all households make more and half less than that.  So Romney’s definition of middle class includes people making four to five times as much as the median family.

This gives us some perspective on things, but taking a look at central tendencies — medians and averages — only gets you so far.

So, fortunately for us, the good people at the Political Calculations blog have given us a web tool to see exactly who stands where. Taking a look at household incomes on the right, we can get a very good idea where the “middle class” is.  For example, if we define the middle class as the 20th to 80th percentile households, then the middle-class income is in the $20,700 to $102,500 range. You can pull this figure for yourself from the graph to your right.  Start at 20% and follow it across to the distribution, and then go down to see the total money income.

As you probably know, $200,000 is a fair bit of money.  A household with that level of income is in the 96th percentile, not quite high enough to qualify for the top 1% and the scorn and indignation of the Occupy movement, but still a good living.  Incidentally, it requires $305,000 to get into the top 1% if that’s of interest to you.

Be sure to write when you get there.

The little tool will be very helpful as we march toward the election, but it will also help us to frame where we put our sympathies (if anywhere) in any number of labor disputes. For example, here’s Tuesday Morning Quarterback Gregg Easterbrook on some labor disputes affecting professional sports:

The NFL Referees Association is angry about an NFL offer that would raise officiating salaries to an average of $189,000 annually for part-time work. The NHL union is angry about an offer that would reduce the current player average of $2.4 million to a mere $2 million annually.

Yes, many NFL and NHL owners are ogres, and none should receive public subsidies. But the framing of the disputes — unions claiming to be working-class victims versus plutocrats — is 50 years out of date. A hobby that pays $189,000 a year; a child’s game that pays $2 million a year plus leads to celebrity. The people offered these deals are angry and feel ill-used?

You can see where Easterbrook comes down here, and plugging the$189,000 into our tool shows that the NFL referee will be making more money than 98.7% of all individuals and 95% of all households nationally. My son also runs around in his pajamas blowing a whistle on Sundays, but he is not compensated quite so handsomely.

Of course, athletes aren’t the only ones with a beef.  Chicago public school teachers have been on strike for more than a week now, probably more over evaluation than over pay, but their salaries seem to stack up pretty favorably with their peers across the country.  Here are some of the parameters of the contract under negotiation:

In Chicago, the starting salary is roughly $49,000, and average salary is around $76,000 a year.The tentative contract calls for a 3 percent raise in its first year and 2 percent for two years after that, along with increases for experienced teachers. While many teachers are upset it did not restore a 4 percent pay raise Emanuel rescinded earlier this year, the contract if adopted would keep Chicago teachers among the highest-paid in the country.

The average salary puts the teacher in the 68th percentile, and two “average” teachers earning $152,000 per year would be in the top 10% of all households nationally.

Closer to home, our own Lawrence website boasts that “Lawrence grads earn the highest mid-career salary of any Wisconsin college,” with median starting salaries of $39,700 and mid-career salaries of $89,700.  The starting salary puts our median graduate ahead of two-thirds of the population and ahead of 40% of all households.

EconRead is back!

Love?

The one-unit tutorial where we read interesting economics-related books and discuss them is back this year.

We plan to do it every term, so you could pick up half a course over the year, if you read along. The main reading for the fall is the just-published What Money Can’t Buy: The Moral Limits of Markets, by leading Harvard moralist Michael Sandel.

The book is very light reading, but it raises many important questions that we typically avoid in our economics curriculum. To prepare for discussing this book, we’ll read and discuss the first hundred pages of Allen Buchanan‘s Ethics, Efficiency, and the Market. We’ll meet six times over the term, starting in week 3. If you are interested in joining us, please show the times when you are available here. (If we end up meeting at 11:10 on Thursday, then we won’t meet on October 11th, when there is a convocation.)

Great Stagnation or Leap Forward? Which will it be?

In a recent article in Forbes, contributor Nick Shulz asks what the “new normal” for economic growth in the U.S. will be. On one side, we find Tyler Cowen (The Great Stagnation) and Robert Gordon (“Is U.S. Economic Growth Over?…”) arguing that the technological low hanging fruit have been picked and that the future will feature economic growth similar to what existed before the industrial revolution (that is, well below 1% per year.)

On the other side of the debate, Race Against the Machine authors Bryjolfsson and McAfee and authors of the new volume The 4% Solution, published by the Bush Institute, suggest that the future will be brighter than the past.

Which do you believe?  On which future would you bet? Why?

 

Scary Stories (to Tell in the Dark)

In Monday’s Financial Times – of course, no US newspaper would publish it – Stephen Roach, former chair of Morgan Stanley Asia and present senior fellow at Yale University, describes a scenario that might take place if 1) Mitt Romney is elected and 2) he follows through on what he said would be his first order of business.  I encourage you to read this opinion piece in full.  Here are the pertinent details.

1. Romney declares China guilty of currency manipulation.

2. Romney proposes and Congress passes the Defend America Trade Act of 2013 (DATA2013 for short.)

3. Negotiations between the US and China fail so the US slaps a 20% tariff on all Chinese products entering the US.

4. Beijing interprets this action as economic warfare and files a complaint with the WTO.

5. Not willing to wait until the WTO dispute process plays out and given the large number of plants closed in China, China’s Ministry of Commerce introduces a 20% tariff on all U.S. exports (roughly $104B worth in 2011.)

6. Walmart announces average price increases of 5% and other retailers follow suit.

7. The Fed extends its commitment to zero interest rate policies to 2015 (ZIRP.)

8. Financial market swoon, and Romney and Congress up the tariffs on China by another 10%.

9. China publicly announces it will no longer buy US treasuries.

10. Both the US and Chinese economies tank.

 

Is this scenario just the ghosts of Smoot and Hawley (authors of the infamous Tariff Act of 1930) arising to exhort their contemporary counterparts in Congress or is this just a nightmare that will fade when Stephen Roach and I wake up?

This is clearly the “dark” side of public policy making.  But, where’s the “light” or enlightened side? I don’t see any.

 

Income Deciles Through the Years

Jordan Weissmann at The Atlantic points us to a noteworthy breakdown of income changes through the years.

 

The Rich Get Poorer, The Poor Get Poorer

 

This tells a pretty interesting story. Coming out of World War II, the gains in the bottom decile are pretty solid up until the 1970s, when they seem to stagnate along with all other income groups.  It isn’t until the  1980s and 1990s that the top income bracket really takes off.

There are, of course, dozens of caveats with data like these.  But those aside, data guru Andrew Gelman simply doesn’t like this plot, so he takes some pains to make this clearer.  Here’s Gelman’s discussion, and below you can see roughly the same data in a more conventional time series format.

 

As Gelman correctly points out, his full series tells a different story. In particular, the sharp income decrease of the last decade occurred principally since 2007.  Yikes.

Gelman is great with data.  If you are interested in empirical social sciences, I recommend you check him out at The Monkey Cage or at his blog, or one of his many excellent books.

A Gold Rush of Commentary

It seems the Republican party’s talk of a gold commission has led to a virtual gold rush of commentary from columnists, talking heads, and assorted punditry.  Taking a glance at the Real Clear Markets link aggregator, I see “The Failing Case for Gold,” “The Top Ten Reasons you Should Support the Gold Commission,” and “GOP’s Golden Oldie,” along with the fabulously titled “The Lost Bush/Obama Era Gave Us the Gold Commission” and “The First Gold Commission Scared the Hell Out of the Fed. These latter two pieces with the provocative names are pretty favorable takes, I’d say.

Not every economist is high on the gold standard, as Paul Krugman noted a few years back:

There is a case to be made for a return to the gold standard. It is not a very good case, and most sensible economists reject it, but the idea is not completely crazy.

Most sensible economists, yes, suggesting that some sensible economists might be somewhat more favorable (see the links herein, for instance).

Of course, times change, and evidently so has Krugman’s assessment.  Here’s Krugman’s in yesterday’s New York Times:

The truth is that returning to gold is an almost comically (and cosmically) bad idea.

So much for the sensible goldbug.  Krugman finishes the piece with this zinger:

Now, the gold bugs will no doubt reply that under a gold standard big bubbles couldn’t happen, and therefore there wouldn’t be major financial crises. And it’s true: under the gold standard America had no major financial panics other than in 1873, 1884, 1890, 1893, 1907, 1930, 1931, 1932, and 1933.

I guess we’ll see how the campaign shapes up and perhaps we’ll be seeing more of this.

New(ish) Schumpeter Bio

For those of you who can’t get enough Schumpeter, Esben Sloth Andersen’s has a (somewhat) recent take in Joseph A. Schumpeter: A Theory of Social and Economic Evolution

Arthur Diamond has the review at the Economic History Association website, EH.net. Here’s an excerpt:

Andersen’s book invites comparison with business historian Thomas McCraw’s (2007) comprehensive intellectual biography.  McCraw’s book includes more new material and is written in a style that is more pleasant to digest.  Of greater importance is that McCraw gives more attention to Schumpeter’s best moves on innovation and creative destruction, and gives less attention to Schumpeter’s moves on evolutionary method and long wave theory.

Joseph A. Schumpeter is part of a series that aims to briefly present the main doctrines of important economists in the context of their lives and of events in the milieu in which they lived.  Andersen does include some chapters on Schumpeter’s life, but these usually read as obligatory afterthoughts, rather than as information integral to understanding Schumpeter’s doctrines.  And he does not seem to take as much care in this part as he does elsewhere, as, for example, when he opines without citation or much explanation that Schumpeter was “unbalanced” by the events leading up to World War II (p. 135).  The period is more fairly analyzed by McCraw who emphasizes that Schumpeter’s reasonable worries about Stalin’s Communism tempered his initial reaction to Hitler’s National Socialism.

Here is more on the author, Ebsen Andersen.  Here is more on the reviewer, Art Diamond.

GOP Going for the Gold?

Future Heads of the Hungarian Central Bank?

Speaking of gold, the Financial Times is reporting that the Republicans are discussing a return to the gold standard.

What do you suppose a return to the gold standard would entail?

I can’t answer that question in short order, but if you are interested, here are some places where I would start.

For a brief overview geared to a more general audience, Michael Bordo has a brief article and a number of references at The Concise Encyclopedia of Economics and Liberty.

For articles geared for more scholarly audiences, check out the article at the New Palgrave Dictionary of Economics (available from on-campus IP addresses), or a lengthier treatment, chocked full of descriptive statistics, is Lawrence Officer’s extensively documented piece at the Economic History Association’s webstite, EH.net.