Happy 2016!
Starting off 2016 with some humor: Economists put decimal points in their forecasts to show that they have a sense of humour William Gilmore Simms, on forecasts
Tag: Economics
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…
In Memoriam: Willard G. Manning, 1946-2014
In November, Willard Manning passed away. I met Dr. Manning as he was a lecturer at the European Science Days summer school in Steyr, Austria. iHEA has put together a nice in memoriam article and I have an sample of that below. I will echo that although Dr. Manning was best know for his work on the RAND…
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…
The 2014 Nobel Prize in Economics goes to…
Jean Tirole. The full scientific background is here. Marginal Revolution has a number of posts or you can check out Wonk Blog. Digitopoly discusses how Tirole is like Louis Pasteur. Vox has a nice overview of Tirole’s work as well and an example from newspapers… Newspapers, for example, are one area the Nobel Committee points to…
Comparing Cost-Benefit Analysis and Social Welfare Functions
When evaluating whether a policy or medical treatment approved, policymakers often rely on cost-benefit analysis (CBA). However, how does one measure costs and benefits? Costs are often measured in monetary terms and benefits are often measured as decreases in mortality or morbidity. One way to ensure to tradeoff cost and benefits is to monetize health…
2013 Nobel Prize in Economics: Fama, Hansen and Shiller
Today, the Nobel Prize in Economics was awarded to Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller. Here is a summary of their contribution to the field which earned them the award. Eugene Fama. Beginning in the 1960s, Eugene Fama and several collaborators demonstrated that stock prices are extremely difficult to predict in…
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…