Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)
January 30
Are Federal Government Workers Overpaid?
The Congressional Budget Office says that federal workers with a bachelor's degree or less are paid more than their private sector counterparts. Federal workers with professional degrees and PhDs are paid less than in the private sector. Overall, federal workers are paid 16 percent more than private sector workers.
Textbook References:
Pages 398-405 “Some Determinants of Equilibrium Wages”December 27
How do the rich earn their livings?
Jon Bakija, Adam Cole, and Bradley T. Heim investigate the professions of the top one-percent of income earners from 1979 to 2005.
Textbook References:
Pages 398-405 “Some Determinants of Equilibrium Wages”Pages 416-424 “The Measurement of Inequality”
December 7
The Education of the One Percent
Gallup combined 61 surveys and concluded that there is a strong relationship between education and wealth.
Textbook References:
Pages 399-400 “Human Capital”December 6
A Discussion of Inequality
Leading social scientists discuss inequality in an 81 minute video.
Textbook References:
Pages 398-405 “Some Determinants of Equilibrium Wages”Chapter 20 “Income Inequality and Poverty”
November 16
Ugly Discrimination
The Daily Show interviews Daniel Hamermesh about the economic value of beauty.
Textbook References:
Pages 401-402 “The Benefits of Beauty”November 7
Race Against the Machine
Erik Brynjolfsson argues that technological change has increased productivity but has also left many less-skilled workers behind.
Textbook References:
Pages 387-388 “Productivity and Wages”Pages 399-400 “The Increasing Value of Skills”
Chapter 20 “Income Inequality and Poverty”
November 5
Educating Oligarchs
Would a better education system reduce income inequality? Mankiw and Paul Krugman debate the issue.
Textbook References:
Pages 387-388 “Productivity and Wages”Pages 399-400 “The Increasing Value of Skills”
Chapter 20 “Income Inequality and Poverty”
June 27
The Rate of Return on Human Capital
The financial return on a college education far exceeds that on stocks or real estate.
Textbook References:
Pages 398-400 “Human Capital”Pages 543-544 “Education”
April 12
Increases in Top Incomes: Baseball Edition
In real terms, the average salary for the 25 highest paid baseball players increased 540% from 1988 to 2011.
Textbook References:
Pages 419-421 “The Superstar Phenomenon”March 6
Richard Freeman on Unions
Richard B. Freeman recommends five books about labor unions. He argues that unions are, on net, a positive force in the economy.
Textbook References:
Pages 421-422 “Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages”Pages 629-631 “Unions and Collective Bargaining”
February 6
The State of U.S. Manufacturing
Despite the decline in factory jobs, the U.S. still leads the world in manufacturing.
Textbook References:
Pages 58-59 “Should the United States Trade with Other Countries?”Page 417 “The Loss of Manufacturing Jobs”
December 20
The Value of Good Teachers
Eric Hanushek calculates that good teachers have an astonishingly high value to society.
Textbook References:
Pages 414-416 “Human Capital”
Page 556 “Human Capital per Worker”
Pages 563-565 “Education”
December 16
The Economics of Seinfeld
Clips from the TV show "Seinfeld" are used to illustrate a variety of economic concepts.
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 5-6 “Principle 2: The Cost of Something is What You Give Up to Get It”
Page 6 “Principle 3: Rational People Think at the Margin”
Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Chapter 3 “Interdependence and the Gains from Trade”
Pages 67-72 “Demand”
Pages 73-76 “Supply”
Pages 144-153 “Controls on Prices”
Chapter 10 “Externalities”
Pages 226-227 “The Different Kinds of Goods”
Pages 227-232 “Public Goods”
Pages 230-232 “The Difficult Job of Cost-Benefit Analysis”
Pages 232-237 “Common Resources”
Pages 274-275 “Fixed and Variable Costs”
Page 281 “Economies and Diseconomies of Scale”
Pages 312-315 “Why Monopolies Arise”
Chapter 16 “Monopolistic Competition”
Pages 370-378 “The Economics of Cooperation”
Pages 399-400 “The Supply of Labor”
Page 414 “Compensating Differentials”
Page 442 “Utility”
Page 465 “Utility: An Alternative Way to Describe Preferences and Optimization”
Pages 484-489 “Asymmetric Information”
Pages 556-558 “Technological Knowledge”
Pages 578-580 “Financial Intermediaries”
Pages 598-600 “Present Value: Measuring the Time Value of Money”
Pages 603-604 “Diversification of Firm-Specific Risk”
Pages 606-609 “The Efficient Market Hypothesis”
Pages 630-631 “The Economics of Unions”
Pages 703-705 “The Prices for International Transactions: Real and Nominal Exchange Rates”
Pages 707-708 “The Basic Logic of Purchasing Power Parity”
Page 833 “Time Inconsistency”
December 10
Fairness and Tax Policy
Jonathan Weinstein responds to a paper by Greg Mankiw and challenges some of its assumptions. The discussion centers on competing views of fair taxation.
Textbook References:
Pages 34-36 “Why Economists Disagree”
Pages 253-257 “Taxes and Equity”
Pages 419-421 “The Superstar Phenomen”
Pages 442-445 “The Political Philosophy of Redistributing Income”
August 5
President Obama's Pro-Union Stance
Gary Becker claims that the threat of pro-union policy harms the recovery.
Textbook References:
Pages 421-422 “Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages”
Pages 629-631 “Unions And Collective Bargaining”
July 10
The Root Cause of the Crisis
Raghuram Rajan suggests that government policy to mask stagnant real wages was the ultimate cause of the financial crisis.
Textbook References:
Pages 415-416 “The Increasing Value of Skills”
Page 417 “The Loss of Manufacturing Jobs”
Page 441 “What to Make of Rising Inequality”
Pages 654-655 “The Financial Crisis of 2008”
February 21
What Unions Are Getting
The Economist magazine argues that the Obama administration's policy towards unions has raised costs so that taxpayers are getting less for their money.
Textbook References:
Pages 421-422 “Above-Equilibrium Wages: Minimum-Wage Laws, Unions and Efficiency Wages”
Pages 629-631 “Unions And Collective Bargaining”
October 28
The Value of Human(?) Capital
Scientists find that adding to a monkey's "human" capital will raise its income and status in the monkey's group.
Textbook References:
Pages 366-370 “Markets with only a Few Sellers”
Pages 414-416 “Human Capital”
May 4
Meltzer vs Krugman
Allan Meltzer is worried that the Fed’s easy money policy will lead to inflation. He is also worried that the Fed has lost its independence. Paul Krugman is worried about falling wages and the possibility of deflation.
Textbook References:
Pages 392-399 “The Demand for Labor”
Pages 399-400 “The Supply of Labor”
Pages 400-405 “Equilibrium in the Labor Market”
Pages 414-422 “Some Determinants of Equilibrium Wages”
Pages 648-649 “The Federal Reserve System”
Chapter 30 “Money Growth and Inflation”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
Pages 793-796 “Using Policy to Stabilize the Economy”
Pages 830-832 “Should Monetary and Fiscal Policymakers Try To Stabilize the Economy?”
Apr. 4
Hoover Did It!
Lee Ohanian argues that higher wages, which were paid to prevent unions from organizing, was an important cause of the Great Depression.
Textbook References:
Pages7-8 “Principle 4: People Respond to Incentives”
Pages 8-10 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Pages 118-121 “How Price Floors Affect Market Outcomes”
Pages 421-422 “Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages”
Pages 629-631 “Unions and Collective Bargaining”
Jan. 31
Summers vs Obama
Before becoming economic advisor to Obama, Larry Summers wrote that unions are a cause of long-term unemployment. Obama claims that unions are part of the solution.
Textbook References:
Pages 32-33 “Why Economists’ Advice is not Always Followed”
Pages 421-422 “Above-Equilibrium Wages: Minimum-Wage Laws, Unions, and Efficiency Wages”
Pages 629-631 “Unions and Collective Bargaining”