dunnettreader + microeconomics   31

Oliver Hart and the Poetry of Economic Theory -
At this year’s annual ASSA meeting, Stigler Center Director Luigi Zingales delivered a lecture honoring Oliver Hart, winner of the 2016 Nobel Prize for…
firms-theory  firms-structure  incentives-distortions  human_capital  organizations  microeconomics  Evernote  from instapaper
march 2018 by dunnettreader
Nicola Gennaioli, Yueran Ma, and Andrei Shleifer - Expectations and Investment (2016) | Andrei Shleifer
Gennaioli, Nicola, Yueran Ma, and Andrei Shleifer. 2016. “Expectations and Investment.” NBER Macroeconomics Annual, Vol. 30 (2015): 379-442.
Abstract
Using micro data from Duke University quarterly survey of Chief Financial Officers, we show that corporate investment plans as well as actual investment are well explained by CFOs’ expectations of earnings growth. The information in expectations data is not subsumed by traditional variables, such as Tobin’s Q or discount rates. We also show that errors in CFO expectations of earnings growth are predictable from past earnings and other data, pointing to extrapolative structure of expectations and suggesting that expectations may not be rational. This evidence, like earlier findings in finance, points to the usefulness of data on actual expectations for understanding economic behavior. -- downloaded via iPhone to DBOX
cognition  rational_choice  microeconomics  behavioral_economics  article  cognitive_bias  investment  cognitive_science  downloaded  rational_expectations  corporate_finance  extrapolation  microfoundations  heuristics 
august 2016 by dunnettreader
Chris Dillow - Ronnie O'Sullivan & the limits of incentives
Ronnie O’Sullivan yesterday gave us a nice example of the limitations of basic economics. He turned down the chance to go for a 147 break because the £10,000…
Instapaper  incentives  incentives-distortions  executive_compensation  game_theory  microeconomics  from instapaper
february 2016 by dunnettreader
Price V. Fishback - How Successful Was the New Deal? The Microeconomic Impact of New Deal Spending and Lending Policies in the 1930s | NBER January 2016
NBER Working Paper No. 21925 -- The New Deal during the 1930s was arguably the largest peace-time expansion in federal government activity in American history. Until recently there had been very little quantitative testing of the microeconomic impact of the wide variety of New Deal programs. Over the past decade scholars have developed new panel databases for counties, cities, and states and then used panel data methods on them to examine the examine the impact of New Deal spending and lending policies for the major New Deal programs. In most cases the identification of the effect comes from changes across time within the same geographic location after controlling for national shocks to the economy. Many of the studies also use instrumental variable methods to control for endogeneity. The studies find that public works and relief spending had state income multipliers of around one, increased consumption activity, attracted internal migration, reduced crime rates, and lowered several types of mortality. The farm programs typically aided large farm owners but eliminated opportunities for share croppers, tenants, and farm workers. The Home Owners’ Loan Corporation’s purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex post cost to taxpayers. The Reconstruction Finance Corporation’s loans to banks and railroads appear to have had little positive impact,although the banks were aided when the RFC took ownership stakes. -- paywall on SSRN
paper  SSRN  paywall  economic_history  20thC  Great_Depression  New_Deal  entre_deux_guerres  Keynesianism  housing  mortgages  banking  agriculture  demand-side  government-roles  government_finance  microeconomics 
february 2016 by dunnettreader
Stefan Linder, Nicolai J. Foss - Agency Theory :: SSRN April 23, 2013
Stefan Linder, ESSEC Business School -- Nicolai J. Foss, Copenhagen Business School - Department of Strategic Management and Globalization *--* Agency theory studies the problems and solutions linked to delegation of tasks from principals to agents in the context of conflicting interests between the parties. Beginning from clear assumptions about rationality, contracting and informational conditions, the theory addresses problems of ex ante (“hidden characteristics”) as well as ex post information asymmetry (“hidden action”), and examines conditions under which various kinds of incentive instruments and monitoring arrangements can be deployed to minimize the welfare loss. Its clear predictions and broad applicability have allowed agency theory to enjoy considerable scientific impact on social science; however, it has also attracted considerable criticism. -- PDF File: 35 -- Keywords: adverse selection, agency costs, compensation, conflict of interest, contracting, corporate governance, delegation, hidden action, hidden characteristics, incentive intensity, information asymmetry, informativeness, monitoring, moral hazard, motivation, nexus of contracts, pay-for-performance -- downloaded pdf to Note
paper  SSRN  economic_theory  social_sciences-post-WWII  microeconomics  microfoundations  behavioral_economics  incentives  incentives-distortions  agency  agents  game_theory  rational_choice  rationality-economics  rationality-bounded  information-asymmetric  adverse_selection  delegation  moral_psychology  moral_hazard  contracts  principal-agent  downloaded 
january 2016 by dunnettreader
Lee Anne Fennell, Richard H. McAdams, eds. - Fairness in Law and Economics: Introduction :: SSRN - (Edward Elgar 2013)
Lee Anne Fennell and Richard H. McAdams, both University of Chicago Law School -- University of Chicago Coase-Sandor Institute for Law & Economics Research Paper No. 704 -- This introduction, prepared for an edited volume, offers some observations on the importance — indeed, inescapability — of fairness concerns in law and economics. The relationship between fairness and the economic concept of efficiency is usually cast as an adversarial one. Rational choice economics typically describes human behavior as motivated by simple self-interest, rather than by concerns of morality, justice, or fairness. But we have found that the connections between concepts of fairness and the economic analysis of law are robust and diverse. After discussing some of these linkages, we describe the organization and content of the volume we have compiled. In it, economics engages with fairness, challenging the idea that the two concepts are alien to each other. -- PDF File: 18 -- Keywords: fairness, law and economics -- downloaded pdf to Note
chapter  books  SSRN  law-and-economics  behavioral_economics  game_theory  rational_choice  rationality-economics  fairness  efficiency  welfare_economics  self-interest  altruism  microeconomics  policymaking  legal_system  legal_theory  legal_reasoning  utility  status_quo_bias  downloaded 
july 2015 by dunnettreader
Noah Smith - Economics Gets Real - Bloomberg View - June 2015
“It works in practice, but does it work in theory?” This joke is so commonly applied to economists that no one even knows who said it originally. The idea fits… Still too polyanna "both sides do it" and facts only have a modest liberal bias, but nice roundup of interesting papers and research programs on the empirical side that at least puts the kabosh on the Theory leads empirical which can be fitted or handwaved away which dominated the better part of the 1970s to the Great Depression -- and the Great Moderation is being reexaminedas not necessarily all so great
Instapaper  macroeconomics  microeconomics  microfoundations  behavioral_economics  economic_theory  links  from instapaper
june 2015 by dunnettreader
Alan B. Krueger - The great utility of the Great Gatsby Curve | Brookings May 2015
Every so often an academic finding gets into the political bloodstream. A leading example is "The Great Gatsby Curve," describing an inverse relationship between income inequality and intergenerational mobility. Born in 2011, the Curve has attracted plaudits and opprobrium in almost equal measure. Over the next couple of weeks, Social Mobility Memos is airing opinions from both sides of the argument, starting today with Prof Alan Krueger, the man who made the Curve famous. -- Building on the work of Miles Corak, Anders Björklund, Markus Jantti, and others, I proposed the “Great Gatsby Curve” in a speech in January 2012. The idea is straightforward: greater income inequality in one generation amplifies the consequences of having rich or poor parents for the economic status of the next generation.
The curve is predicted by economic theory…
US_economy  inequality  inheritance  inequality-opportunity  inequality-wealth  families  economic_sociology  economic_theory  economic_models  microeconomics  mobility  statistics  Instapaper  from instapaper
may 2015 by dunnettreader
Richard Thaler - Unless You Are Spock, Irrelevant Things Matter in Economic Behavior - NYTimes.com - May 2010
Early in my teaching career I managed to get most of the students in my class mad at me. A midterm exam caused the problem. I wanted the exam to sort out the… He's finding a larger audience for the themes of his new book, Misbehaving
behavioral_economics  rational_choice  rationality-economics  microeconomics  Instapaper  from instapaper
may 2015 by dunnettreader
Herbert A. Simon - Altruism and Economics (May, 1993) | JSTOR - The American Economic Review
Herbert A. Simon,The American Economic Review, Vol. 83, No. 2, Papers and Proceedings of the Hundred and Fifth Annual Meeting of the American Economic Association (May, 1993), pp. 156-161 -- overview of how he models "utility" to handle bounded rationality, and how groups need to be included in utility behavior models to get at "altruism" or preferences for other-regarding behavior -- basic message is public choice and rational choice have such an impoverished concept of "rationality" they will never be able to get their axiomatic models to work with what requires rich empirical observations -- doesn't say it, but their limited concept of rationality is less an empirically verified theory re how the world works, but rather a bundle of normative assumptions -- and when they try to extend what's really prescriptive to areas like the family, they've gotten way outside their lane -- downloaded pdf to Note
paper  jstor  economic_theory  economic_sociology  microeconomics  behavioral_economics  rational_choice  rationality-economics  rationality-bounded  rationality-adaptive  Darwinism  evolution-as-model  evolution-social  evolution-group_selection  self-interest  altruism  utility  public_choice  Simon_Herbert  downloaded 
april 2015 by dunnettreader
Xavier Gabaix - The Granular Origins of Aggregate Fluctuations - August 17, 2009 :: SSRN
New York University - Stern School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI) -- This paper proposes that idiosyncratic firm-level fluctuations can explain an important part of aggregate shocks, and provide a microfoundation for aggregate productivity shocks. Existing research has focused on using aggregate shocks to explain business cycles, arguing that individual firm shocks average out in aggregate. I show that this argument breaks down if the distribution of firm sizes is fat-tailed, as documented empirically. The idiosyncratic movements of the largest 100 firms in the US appear to explain about one third of variations in output and the Solow residual. This "granular" hypothesis suggests new directions for macroeconomic research, in particular that macroeconomic questions can be clarified by looking at the behavior of large firms. This paper's ideas and analytical results may also be useful to think about the fluctuations of other economic aggregates, such as exports or the trade balance. -- Pages in PDF File: 44 -- Keywords: Business cycle, idiosyncratic shocks, productivity, Solow residual, granular residual, comovement -- didn't download
paper  SSRN  economic_theory  macroeconomics  microeconomics  business_cycles  economic_growth  productivity 
april 2015 by dunnettreader
Filip Palda, A school in decline: In Chicago, economists honour Gary Becker | Financial Post | November 4, 2014
Too bad. Becker was far superior to his promoters and acolytes - same with Coase. An embarrassingly feeble celebration of the Becker-Friedman-Stigler counter-revolution of outsider genius rebels against "Keynesian hegemony" beginning in the 1950s. The take-away seems to have been that markets are efficient when left alone and that government programs will inevitably be defeated by either regulatory capture or clever, rational, forward-looking agents that will game the system to produce an unintended (often perverse) outcome. Ironically, the only big example chosen to illustrate how Becker's forays into other social sciences flummoxed left-wing by overturning their cherished worldview looks increasingly flimsy - treating criminals as rational calculating economic agents rather than victims of assorted "pathologies." The microeconomist "knows" that the key to behavioral change is to just get the incentives and prices right through adjusting levels and types of punishment or type and amount of policing. Unfortunately for this example of economic imperialism, It's now clear that the enormous increase in crime rates over decades, followed by an equally enormous decline, shows that macro effects of some, yet to be agreed upon, social factors simply swamped any of the micro concerns of Becker's rational calculating agents. That's not to suggest microfoundations were irrelevant, but it increasingly appears that individual behavior was affected by factors of precisely the opposite sort from those that would be involved in rational utility calculations - the environmental poisoning of children's neurological systems, especially in the segregated urban-industrial ghettos into which the black population was forced to live, that reduced the capacity for self-control and rational calculation, and increased impulsive, indeed irrational, aggressive behavior, too often violent crime. And as the amount of poisoning has declined, so too has irrational, impulsive violence. But despite the accumulating evidence of macro factors, we can expect for decades to come that micro textbooks and right-wing economists will be reciting the "lessons" Becker's approach has "taught" for designing social policy. Just as they "know" voluntary unemployment doesn't exist - only that the government must be interfering with the prices and market incentives. Pthew!
20thC  intellectual_history  economic_theory  social_theory  behavioral_economics  microeconomics  microfoundations  incentives  prices  markets_in_everything  crime  criminal_justice  Chicago_School 
january 2015 by dunnettreader
David Glaser - Franklin Fisher on the Stability(?) of General Equilibrium | Uneasy Money - October 2014
Although we routinely apply comparative-statics exercises to derive ... refutable propositions about the directional effects of a parameter change on some observable economic variable(s), ... those comparative-statics exercises are predicated on the assumption that the exercise starts from an initial position of equilibrium and that the parameter change leads, in a short period of time, to a new equilibrium. But there is no theory describing the laws of motion leading from one equilibrium to another, so the whole exercise is built on the mere assumption that a general equilibrium is sufficiently stable so that the old and the new equilibria can be usefully compared. In other words, microeconomics is predicated on macroeconomic foundations, i.e., the stability of a general equilibrium. The methodological demand for microfoundations for macroeconomics is thus a massive and transparent exercise in question begging. In his paper on the stability of general equilibrium, Fisher observes that there are four important issues to be explored by general-equilibrium theory: existence, uniqueness, optimality, and stability. Of these he considers optimality to be the most important, as it provides a justification for a capitalistic market economy. "Whether or not the actual economy is stable, we largely lack a convincing theory of why that should be so. Lacking such a theory, we do not have an adequate theory of value, and there is an important lacuna in the center of microeconomic theory. Yet economists generally behave as though this problem did not exist. Perhaps the most extreme example of this is the view of the theory of Rational Expectations that any disequilibrium disappears so fast that it can be ignored. (If the 50-dollar bill were really on the sidewalk, it would be gone already.) But this simply assumes the problem away. The pursuit of profits is a major dynamic force in the competitive economy. To only look at situations where the Invisible Hand has finished its work cannot lead to a real understanding of how that work is accomplished." -- downloaded pdf to Note
paper  macroeconomics  microfoundations  equilibrium  economic_theory  microeconomics  rational_expectations  downloaded  EF-add 
october 2014 by dunnettreader
Blogging Steve Keen's "Debunking Economics" | Unlearning Economics (posts from 2012)
Chapter by chapter commentary - Keen takes on fallacies or weaknesses in (mostly) neoclassical economics one by one - so may in one chapter accept as a necessary assumption to the principle or method he's debunking, something he's debunked in another chapter. So the chapter by chapter approach fits with examining Keen's points. Keen's own models focus on endogenous money in a credit based market, heavily influenced by Minsky.
intellectual_history  20thC  social_sciences-post-WWII  economic_theory  economic_models  macroeconomics  neoclassical_economics  microeconomics  Minsky  Great_Depression  Great_Recession  banking  financial_system  financial_crisis  debt  credit  money  money_supply  central_banks  demand  economic_growth  EF-add 
august 2014 by dunnettreader
Hayek on Prediction in the Social Sciences | Social Democracy for the 21st Century: A Post Keynesian Perspective: August 2014
Lord Keynes looking at Hayek's 1974 Nobel lecture -- If Hayek is saying here that the natural sciences could exactly predict everything about the game given enough information (including presumably the brain states of human players), then he is committed to the view that the world is completely deterministic, and that our uncertainty about it is merely epistemic and caused by the insuperable difficulties of gathering enough information for calculations. In contrast to this, Post Keynesians emphasise the ontological nature of uncertainty, and this commits them to a philosophical position quite different from that of Hayek. The notion of “spontaneous ordering forces” that bring order to markets (like Smith’s “invisible hand” metaphor) seems overrated too. “Spontaneous ordering forces” must be understood as emergent properties. That complex social and economic systems can display emergent properties that result in greater stability is not in doubt, but other emergent properties (e.g., the outcome of the paradox of thrift or distress selling in a market crash) can also be highly deleterious and destabilising. Hayek badly neglected such destabilising forces in his rhetoric about markets. -- see bookmark for html of lecture on Nobel Prize site
20thC  intellectual_history  economic_theory  macroeconomics  microeconomics  markets  information-markets  equilibrium  emergence  laisser-faire  Hayek  uncertainty  probability  determinism  Post-Keynesian  philosophy_of_science  philosophy_of_social_science  scientism  scientific_method  scientific_culture  EF-add 
august 2014 by dunnettreader
Forum - “Deirdre McCloskey and Economists’ Ideas about Ideas” (July, 2014) - Online Library of Liberty
Deirdre McClosky is over the halfway point of her 4 volume work on The Bourgeois Era. Two volumes have already appeared, Bourgeois Virtues (2006) and Bourgeois Dignity (2010), and a third is close to appearing [2015]. This Liberty Matters online discussion will assess her progress to date with a Lead Essay by Don Boudreaux and comments by Joel Mokyr and John Nye, and replies to her critics by Deirdre McCloskey. The key issue is to try to explain why “the Great Enrichment” of the past 150 years occurred in northern and western Europe rather than elsewhere, and why sometime in the middle of the 18th century. Other theories have attributed it to the presence of natural resources, the existence of private property and the rule of law, and the right legal and political institutions. McCloskey’s thesis is that a fundamental change in ideas took place which raised the “dignity” of economic activity in the eyes of people to the point where they felt no inhibition in pursuing these activities which improved the situation of both themselves and the customers who bought their products and services.
intellectual_history  cultural_history  economic_history  economic_growth  Medieval  16thC  17thC  18thC  19thC  Great_Divergence  British_history  Scientific_Revolution  Enlightenment  Scottish_Enlightenment  Industrial_Revolution  bourgeoisie  political_economy  France  Germany  Prussia  China  development  institutional_economics  North-Weingast  legal_history  property  property_rights  commerce  trade  trading_companies  free_trade  improvement  technology  Innovation  agriculture  energy  natural_capital  nature-mastery  transport  capitalism  colonialism  industry  industrialization  social_order  Great_Chain_of_Being  consumers  political_philosophy  moral_philosophy  equality  republicanism  republics-Ancient_v_Modern  liberalism  incentives  microeconomics  historical_sociology  historical_change  social_theory  EF-add 
july 2014 by dunnettreader
Steve Randy Waldman - interfluidity » Should markets clear? - May 2014
Microeconomic analysis, whenever it escapes the elegance of theorem and proof and is applied to the actual world, always makes assumptions about the macroeconomy. One very common assumption microeconomists frequently forget that they are making is an assumption of rough distributional equality. Once that goes away, even such basic conclusions like “markets should clear” go away as well.
economic_theory  economic_models  microeconomics  markets  inequality  efficiency  EF-add 
may 2014 by dunnettreader
Robert's Stochastic thoughts: Thoughts on "Paradigm Shifts" - April 2014
I think macroeconomics works OK provided one sticks to 1972 vintage macroeconomics. Or in other words, Krugman usually seems to know what is going to happen next, so what's the problem. I'd say the rest of economics is doing much better than macro. A huge amount of current research is solidly empirical based on experiments or natural experiments. Research doesn't need a general theory to progress. We can learn what sort of policies work without theory.
economic_theory  economic_models  macroeconomics  microeconomics  microfoundations  behavioral_economics  social_theory 
may 2014 by dunnettreader
Diane Coyle, review - Beyond GDP: Measuring Welfare and Assessing Sustainability by Marc Fleurbaey and Didier Blanchet | The Enlightened Economist
Beyond GDP: Measuring Welfare and Assessing Sustainability by Marc Fleurbaey and Didier Blanchet is a technical book on the profoundly important question of how we measure “the economy”. The authors are two distinguished economists/statisticians who were respectively a member and rapporteur for the Sen-Stiglitz commission appointed by the then French President to consider whether there is a better kind of metric than GDP. -- The book’s concludes that we should be talking about “GDP and Beyond”, because GDP is adequate for measuring production and income. However, when it comes to the ‘beyond’, the authors convincingly show that a number of commonly-proposed alternatives have significant flaws in theoretical terms.The alternatives take one of two forms: a composite index that adjusts GDP in some way, either by subtracting some elements or weighting it with other kinds of indicator; or measuring well-being directly via surveys.
books  reviews  economic_growth  political_economy  capitalism  welfare  public_policy  public_goods  investment  sustainability  macroeconomics  microeconomics  EF-add 
february 2014 by dunnettreader
Heterodox Economics - Readings | HMiRN
Extensive list of books, chapters, journal articles, periodically updated since 2011 -- Contents --
1. History and Methodology of Heterodox Microeconomics
2. Critiques of Mainstream Microeconomics
3. Principles of Heterodox Microeconomic Theory
4. Theory of the Business Enterprise
5. Structure of Production and Costs of the Business Enterprise
6. Costing, Pricing, and Prices
7. Investment, Finance, and Employment
8. Households, Consumption, and Market Demand
9. Industry and Market
10. Competition
11. Corporate Governance, Market Governance, and Market Regulation
12. Social Welfare
13. Heterodox Microfoundations and Modeling the Economy
bibliography  economic_theory  economic_history  economic_models  economic_sociology  firms-theory  Labor_markets  capital  corporate_governance  corporate_finance  M&A  regulation  consumers  consumer_demand  monopolies  finance_capital  taxes  competition  investment  prices  wages  heterodox_economics  microeconomics  macroeconomics  neoclassical_economics  EF-add 
february 2014 by dunnettreader
Lars Syll: Do people have rational expectations? [re Mark Thoma article] | LARS P. SYLL
Although there is quite a lot of healthy skepticism on the rational expectations hypothesis (REH) here that I agree with, I still think that Thoma’s picture of the extent to which the assumption of rational expectations is useful and valid, is inadequate and unwarranted.

Let me elaborate a little on why I think so.

The concept of rational expectations was first developed by John Muth in an Econometrica article in 1961 – Rational expectations and the theory of price movements – and later — from the 1970s and onward — applied to macroeconomics. Muth framed his rational expectations hypothesis in terms of probability distributions:
macroeconomics  microeconomics  economic_theory  economic_models  rational_expectations  EMH  prices  risk  EF-add 
november 2013 by dunnettreader
Douglas W. Allen - In defence of the institutional revolution - Springer
The Review of Austrian Economics
December 2013, Volume 26, Issue 4

I defend my thesis laid out in The Institutional Revolution against the comments made by McCloskey, Espin and Mokyr, and Langlois, who all believe that the weight of the great institutional transition is too great for my theory of measurement, and who all quibble with some aspects of my historical analysis. I argue that some of the comments fail to fully appreciate the Coasean approach, and that most of the historical comments miss the mark. I begin with a short discussion of Coase, and then turn to each author in turn.
books  kindle-available  reviews  economic_history  Great_Divergence  Industrial_Revolution  17thC  18thC  19thC  Britain  institutional_economics  transaction_costs  microeconomics  EF-add 
october 2013 by dunnettreader
Ethan Watters: Why Americans Are the WIERDest People in the World | Pacific Standard February 2013
Long form article: Joe Henrich and his colleagues are shaking the foundations of psychology and economics—and hoping to change the way social scientists think about human behavior and culture.
* * * *
The growing body of cross-cultural research that the three researchers were compiling suggested that the mind’s capacity to mold itself to cultural and environmental settings was far greater than had been assumed. The most interesting thing about cultures may not be in the observable things they do—the rituals, eating preferences, codes of behavior, and the like—but in the way they mold our most fundamental conscious and unconscious thinking and perception.
* * * * This new approach suggests the possibility of reverse-engineering psychological research: look at cultural content first; cognition and behavior second. Norenzayan’s recent work on religious belief is perhaps the best example of the intellectual landscape that is now open for study. 
social_theory  statistics  culture  biocultural_evolution  human_nature  psychology  social_psychology  microeconomics  rational_choice  evo_psych  sociology_of_religion  EF-add 
august 2013 by dunnettreader
Robert Gonzalez: WIERD - Rich, educated westerners could be skewing social science studies | io9.com
Links to debates about psychology, social psych, evo psych, experimental microeconomics etc using subjects from developed Western societies, especially college students, and even worse, psych majors
social_theory  psychology  microeconomics  rational_choice  statistics  culture  social_psychology  sociology_of_religion  biocultural_evolution  evo_psych  human_nature 
august 2013 by dunnettreader
Abhijit Banerjee, Esther Duflo: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty (2011) eBook: : Kindle Store
Promotes randomized control trials (RCTs)
Why do the poor borrow to save? Why do they miss out on free life-saving immunizations, but pay for unnecessary drugs? In Poor Economics, Abhijit V. Banerjee and Esther Duflo, two practical visionaries working toward ending world poverty, answer these questions from the ground. In a book the Wall Street Journal called “marvelous, rewarding,” the authors tell how the stress of living on less than 99 cents per day encourages the poor to make questionable decisions that feed—not fight—poverty. The result is a radical rethinking of the economics of poverty that offers a ringside view of the lives of the world’s poorest, and shows that creating a world without poverty begins with understanding the daily decisions facing the poor.
books  kindle-available  poverty  development  economic_models  microeconomics  incentives  behavioral_economics 
july 2013 by dunnettreader
Josh Barro : What's The Best Way To Tax A Superstar? - Business Insider 6-24-13
the traditional way in which economists estimate the economic effects of taxes does not look apt.Normally, economists model labor as something that employees sell to employers. Raise income taxes and you cut the price received by the employee, so he works less. Cut taxes and he works more.A cardiologist might behave exactly like that, doing more procedures if his taxes are cut. But Lady Gaga can't very easily decide to produce twice as many hit songs. She might only have so many good ideas.
US_economy  macroeconomics  microeconomics  taxes  incentives 
june 2013 by dunnettreader
What is neoclassical economics – a rejoinder to Noahpinion | LARS P SYLL June 2013
The essence of neoclassical economic theory is its exclusive use of a deductivist Euclidean methodology. A methodology  that is more or less imposed as constituting economics, and, usually, without a smack of argument.

Assuming, for example, perfect knowledge, instant market clearing and approximating aggregate behaviour with unrealistically heroic assumptions of representative actors, just will not do. The assumptions made, surreptitiously eliminate the very phenomena we want to study: uncertainty, disequilibrium, structural instability and problems of aggregation and coordination between different individuals and groups.
bad_economics  macroeconomics  microeconomics  epistemology  social_theory 
june 2013 by dunnettreader
Andrew J Oswald: High home ownership as a driver of high unemployment | vox June 2013
Unemployment is once again the bane of the US and Europe. This column highlights an intriguing association between home ownership and high unemployment using US state-level data. Given the heavy subsidisation of and rise in home ownership, this association merits more attention from economists.

We are not sure what explains our correlation. But we show, using various micro data sets, that higher home ownership leads to lower labour mobility, greater commute-to-work times, and a lower rate of business formation. Our hunch, on which further work will be needed, is that the housing market exerts powerful externalities upon the labour market.
macroeconomics  microeconomics  Labor_markets  Great_Recession 
june 2013 by dunnettreader

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