Insider vs. Outsider

A post from Ben Casnocha has some really good insights about the pros and cons of being an insider vs. an outsider. I excerpt a parts of the post below: A striking section of Elizabeth Warren’s memoir is about advice she says Larry Summers once offered her: After dinner, “Larry leaned back in his chair and offered…

Is 2% US GDP the new normal?

In the past, many economists targeted 4% GDP growth as the long-run average.  However, in recent years long-run GDP growth has fallen to about 2% per year.  Is the US economic engine slowing down?  Maybe, not. Growth in a country’s GDP comes from 2 components: growth in GDP per work and growth in the number of…

The Standard Gamble

One concept often used in healthcare is the quality-adjusted life years (QALY).  The concept is fairly simple.  It assumes that people value one year of life in perfect health at 1; people who die have a value of a life year of 0.  One year of life where you have 50% health is then valued…

Does International Development Work?

In a well thought out piece in the New Republic, Michael Hobbes argues the answer isn’t ‘yes’ or ‘no’, but the expectations for aid programs to completely reinvigorate an economy or improve health care dramatically are often overestimated.  Consider the case of a program that distributes food to individuals who are malnurished. In Udaipur, India, a…

Is the Tragedy of the Commons of Myth?

There is a well known problem in economics known as the tragedy of the commons.  This problem occurs when a resource, often land, is shared among many people.  Without individual property rights, individuals have an incentive to over-consume and not maintain the resource.  For instance, Garrett Hardin gave an example of a case where herders, sharing a…