"Looking Out for Number One"

I think this should be the new motto of UC Berkeley. Its chancellor and vice-chancellor make a pitch in the Washington Post for a new Morrill Act (the act that provided federal support for the land grant colleges). Their plan, however, only calls for federal support for a "limited number of our great public reasearch and teaching universities." I wonder if they have any particular schools in mind.

Behavioral Economics?

In the New York Times Richard Thaler claims that "with the help of a little behavioral economics" we can increase the number of organ donors. He then describes a number of different schemes that have been used in the the U.S. and other countires and concludes that "the key ... is to make sign up easy." All these years I have been telling my students that if you lower the cost of doing something people will do it more. I thought it was just the law of demand. Does this mean we are all behaviorlists now?

Austrian Economics

For students interested in Austrian economics (Scott) here are a series of videos you might find interesting.

Economists got it right

John Taylor's view.

Financial Crisis Inquiry Commission

The Financial Crisis Inquiry Commission began to hold public meetings last week. I wouldn't hold my breath waiting for a definitive analysis. This week I am going to talk to my economic history class about the Panics of 1837 and 1839. I can tell them that in the last decade economists like Peter Rousseau and John Wallis have added a great deal to our understanding of these events that took place more than a century and a half in the past. See this old post. New papers continue to appear on pretty much every financial crisis in American history. I've recently started reseaching the Panic of 1907 because there are parts of the current story about it that do not make sense to me.

Then again, its not clear the prupose of such commissions is actually better understanding. The opinion page of the Sunday NY Times complains about the commissions slow start and wonders if it reflects "the apparent ambivelence of lawmakers to rein in the banks?"

David Levine on Paul Krugman

David Levine of Washington University also didn't like Krugman's essay in the New York Times.

What I've Been Listening To

At EconTalk Russ Roberts talking to John Nye about the Great Depression, the backlash against globalization in the early twentieth century, long run changes in the role of government, and more.

At VoxTalks Romesh Vaitilingam talks to Dean Karlan about microfinance and the use of experimental methods in economic research.

Which economists got it wrong?

Gregory Mankiw’s most recent blog post is “How did economists get it so wrong?” with a link to an answer by Barry Eichengreen. Paul Krugman had a long essay on the topic in last weeks Sunday New York Times. A group of British economists even felt the need to respond when the Queen asked the question. I am getting tired of the question for several reasons. First, many economists were pointing to problems before the recession began. Robert Shiller, Nouriel Roubini, Raghuram Rajan would just be the start of the list. Krugman himself wrote a book titled The Return of Depression Economics. How much warning do people need. Does every economist have to stand up and shout at the same time?

Second, who are the economists who got it wrong. Who is the Irving Fisher of our time?

Third, its not clear that it would have made a difference if all economists had shouted at the same time. Since when did policy makers start doing what economists say. If policymakers listened to economists we wouldn’t have tariffs, quotas, or agricultural price supports.