Wednesday, January 29, 2014


One of my students asked what I thought about bitcoin the other day in class. I told him that I thought Tyler Cowen had made an interesting case for an eventual decrease in the value of bitcoin. Consequently, I am reposting a link to Marginal Revolution here.

Tuesday, January 28, 2014

Minimum Wages

This is from the Economist, suggesting, in response to Noah Smith, that micro is not the good economics. the author offers up the minimum wage as his example.

There are three things that both me about the article.

First, the author states that if you "ask any two economists – macro, micro, whatever – whether raising the minimum wage will reduce employment for the low skilled, and odds are you will get two answers." The link is to a survey of well known economists. Click on the link. The survey asked the economists to respond to this
"Question A: Raising the federal minimum wage to $9 per hour would make it noticeably harder for low-skilled workers to find employment." I have seen this survey cited several times. The actual question is almost never stated. To an economist the questions are actually quite different. The economists question is about the direction of change will it reduce employment or not? The actuial question was about the size of the change will it be "noticeably harder?" To an economist that is a question about the elasticity of demand not the sloe of the demand curve. Microeconomic theory alone does not make a prediction about the size of the change, whether it will be noticeably harder. That is an empirical question. with that in mind, look at the results of the survey.  The most significant ting to note about the results is that none of the economists said that they strongly agree or strongly disagree, and about one quarter simply said they were uncertain. the rest were split between agree and disagree. In other words, when asked an empricial question which most of them had probably not conducted first hand research on, economists either replied "I don't know" or "my best guess is ...."

Second, it is not clear that this is a micro question. The survey and the Economist article seem to be talking about the aggregate amount of employment of low skilled workers. Not the employment in a particular market. I tell students the difference between micro and macro is that micro deals with particular markets and macro deals with aggregates.

Third, the time series data on the effects of the minimum wage on the employment of low skill workers (the direction of change) seems to be pretty consistent. The size of the change, whther it is noticeable, is not, however, very consistent.

Consider this graph from http://idiosyncraticwhisk.blogspot.com/2014/01/teen-employment-and-minimum-wage-60.html via Marginal Revolution

Monday, January 6, 2014

ASSA in Philadelphia

I got back from the ASSA meetings in Philadelphia last night. I had some excellent food. We'll have to go back to Alma de Cuba when its warmer and try their ceviche sampler. We took Mary's students Leanne Roncolato and Megan Fasules out to Serpico, which had a really nice tasting menu. And Pumpkin cemented its position as my favorite place to eat in Phildelphia. Also went to Saint John the Evangelist Friday night.
I also attended some great sessions. The economic history sesions (organized by the Cliometric Society and the Economic History Association) were all excellent and very well attended. The one in which my wife, Mary Eschelbach Hansen and her student, Megan Fasules, presented was packed and both Paul Solman and Matt Yglesias were there. Yglesias even tweeted one of the slides from Mary and Megan's presentation.
Cliometric Society Sessions

Spatial Allocation of Conflict, Individuals, and Economic Activity

January 3, 2014, 12:30 – 2:15 pm, Philadelphia Marriott, Meeting Room 406

Organizer: John Murray (Rhodes College)

Chair: Mary Hansen (American University)

Discussants: John Brown (Clark University), Allison Shertzer (University of Pittsburgh), Hugh Rockoff (Rutgers), Chris Vickers (Northwestern)

“Railroads and the Regional Concentration of Industry in Germany 1846 to 1882,” Theresa Gutberlet (Rensselaer Polytechnic Institute)

“Segregation (Forever?): Measuring the Short- and Long-Term Consequences of Segregation,” John Parman (College of William and Mary) and Trevon Logan (Ohio State University and NBER)

“Military Conflict and the Economic Rise of Urban Europe,” Mark Dincecco (University of Michigan) and Massimiliano Onorato (IMT Institute for Advanced Studies)

“Murder and the Black Market: Prohibition’s Impact on Homicide Rates in American Cities,” Brendan Livingston (???)

Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective

January 3, 2014, 2:30 – 4:30 pm, Philadelphia Marriott, Meeting Room 406

Organizer: John Murray (Rhodes College)

Chair: William Collins (Vanderbilt and NBER)

Discussants: Carola Frydman (Boston University and NBER), William Collins (Vanderbilt and NBER), Matt Jaremski (Colgate University and NBER)

“Corporate Governance and the Establishment of Manufacturing Enterprises in New England,” Eric Hilt, (Wellesley College and NBER)

“Economies of Scale in Nineteenth Century American Manufacturing Revisited: A Resolution of the Entrepreneurial Labor Input Problem,” Robert A. Margo (Boston University and NBER)

“How Does Governance Matter? An Examination of the Long-Term Evolution of Bank Boards in the United States, 1800-1933,” Howard Bodenhorn (Clemson University and NBER) and Eugene White (Rutgers University and NBER)

Technology and Property Rights

January 4, 2014, 2:30 – 4:30 pm, Philadelphia Marriott, Meeting Room 406

Organizer: John Murray (Rhodes College)

Chair: David Mitch (University of Maryland-Baltimore County)

Discussants: Lisa Cook (Michigan State), Carol Shiue (University of Colorado), Ahmed Rahman (U.S. Naval Academy), Susan Wolcott (Binghamton University)

“Copyright and the Diffusion of Classical Music,” Petra Moser (Stanford University) and Jerry Lao (Stanford University)

“The Great Divergence and the Economics of Printing,” Luis Angeles (University of Glasgow)

“Turning Points in Leadership: Shipping Technology in the Portuguese and Dutch Merchant Empires,” Claudia Rei (Vanderbilt University)

“Industrial development and technology adoption in late nineteenth century Japan,” John Tang (Australia National University)

Economic History Association Sessions

Poverty from a Historical Viewpoint

January 4, 2014, 12:30 – 2:15 pm, Philadelphia Marriott, Meeting Room 307

Organizer: Martha Bailey (University of Michigan)

Chair: Robert Margo (Boston University)

Discussants: Tom Vogl (Princeton), Robert Margo (Boston University), Melissa Thomasson (Miami University – Ohio), Rob Gillezeau (New Democratic Party, Ontario Canada)

“Up from Poverty? The 1832 Cherokee Land Lottery and the Long-run Distribution of Wealth,” Joseph Ferrie (Northwestern University) and Hoyt Bleakley (University of Chicago)

“The Effects of Childhood Means-tested Cash Transfers on Mortality: Evidence from the Mother’s Pension Programs,” Shari Eli (University of Toronto), Anna Aizer (Brown University), Adriana Lleras-Muney (UCLA), and Joseph Ferrie (Northwestern University)

“Interactions between Social Insurance Programs: The Impact of Medicare on the Characteristics of Petitioners for Bankruptcy,” Megan Lynn Fasules (American University) and Mary Eschelbach Hansen (American University)

“Poverty and Progress among Canadian Immigrants, 1911-1931,” Chris Minns (London School of Economics), Kris Inwood (University of Guelph) and Fraser Summerfield (University of Guelph)

Reception hosted by the Cliometric Society

Saturday, January 4th, 6:00-8:00 pm

Philadelphia Marriott Downtown - Meeting Room 403


January 5, 2014, 10:15 am – 12:15 pm, Philadelphia Marriott, Meeting Room 307

Organizer: Martha Bailey (University of Michigan)

Chair: Hugh Rockoff (Rutgers)

Discussants: Dominick Bartelme (UC Berkeley), Joshua Hausman (University of Michigan), Jonathan Rose (Federal Reserve Board)

“American Banking and the Transportation Revolution Before the Civil War,” Matthew Jaremski (Colgate University), Jeremy Atack (Vanderbilt University), and Peter Rousseau (Vanderbilt University)

“Central Bank Credibility and Reputation: An Historical Exploration,” Pierre Siklos (Wilfrid Laurier University) and Michael Bordo (Rutgers University)

“Financial Liberalization and Bank Failures: The United States Free Banking Experience," Philipp Ager (University of Southern Denmark) and Fabrizio Spargoli (Erasmus University)