economic history
sastyk | November 10, 2011Here is the single biggest question to consider about the economic, energy and environmental unwinding we are facing - what will the economy look as we go? I get more questions about this than about anything else - what should people do for work, what should they do with savings, how should they begin to prepare themselves for a lower energy world. What I find, however, is that among both the prepared and the unprepared, there's a whole lot of people kidding themselves. There are those who imagine that there is no economy outside the world of the stock market and formal jobs - that a crash…
razib | March 13, 2010This comment from Chris is interesting:
I would speculate that the the massive productivity gains were due to a massive resorting of American society along cognitive lines; from 1940 to 1970 a large number of high ability people who were previously locked into agriculture and industry were able to sort themselves into more innovative positions. This would lead to a massive burst of innovation, which led to increases in productivity, as previously unlocked talent was put to use.
From 1970 to 1990 this resorting was mostly winding down and productivity in the economy was heavily constrained by…
razib | January 30, 2010Two interesting graphs from Calculated Risk. The first shows that the changes in GDP seem during the last recessive are on a par with those of the early 1980s and before (though we don't know if we're in a U or V shaped recession yet, though the odds are probably more U than V right now). But the second shows that in terms of employment we may be in uncharted territory, the worst of both worlds in terms of the jobless recoveries of the shallow recessions of the 1990s and early 2000s as well as the deep declines in employment of earlier recessions.
I've been hearing about the soon-to-come…
razib | January 29, 2010Jobless Turn to Family for Help, Often With Complications:
More than half of the respondents to a recent New York Times/CBS News poll of 708 unemployed adults nationwide said they had borrowed money from friends or relatives. In most cases, their financial pictures were bleak. Nearly 80 percent of those who reported borrowing money said their family's financial situation was "fairly bad" or "very bad," a significantly greater proportion than among those who had not had to borrow.
The numbers here might exaggerate the effect some, as an individual who is going through financial turmoil may…
razib | January 5, 2010Alex Tabarrok has the back story on the infamous Paul Samuelson projections about Soviet growth. It gets interesting:
Tarshis and Heilbroner were more liberal than Samuelson and McConnell but offered a more nuanced, descriptive and tentative account of the Soviet economy. Why? Levy and Peart argue that they were saved from error not by skepticism about the Soviet Union per se but rather by skepticism about the power of simple economic theories to fully describe the world in the absence of rich institutional detail.
The issue can be generalized to many domains outside economics. If someone…
razib | November 8, 2009Tom Rees, Income inequality drives church attendance:
...we find that attendance rates are particularly high in countries with more socioeconomic inequalities and fewer social welfare expenditure. This effect equally applies to both poor and rich people, which is in line with the idea that because of economic mobility and the possibility of unemployment in the (nearby) future also the more affluent population feels more insecure in countries with more inequalities and without a well-developed social welfare system.
We also see that people with a lower income and who are unemployed attend…
razib | November 2, 2009As I gave a nod to statistical tricks and subtle shell games very recently, the material I review subsequently should be viewed with skepticism and caution. A few days ago I also pointed to a paper which describes and models intergenerational transfers of wealth across various societies. In other words, what parents transmit to children. From the perspective of someone who reads this blog, obviously parents transmit genes to their offspring.
To the left is an old scatterplot from Francis Galton which shows the dependence of the height of children upon the average height of parents.…
razib | October 15, 2009In the interminable debate on Wall Street compensation Ryan Avent makes an important point:
Officials in Washington scrutinising the pay packages of TARP recipients are primarily focused on the incentive effects of those pay structures--whether financial pay packages are inducing financial employees to take excessive risks. But the bigger incentive problem may be--almost certainly is--the drain of talent from other fields, into finance. If there were more evidence that this drain was producing significant net benefits for the economy, than there would be less cause to worry. To an increasing…
razib | September 13, 2009I'm reading Justin Fox's The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street, which is on many "To Read" lists because of its topical relevance. I think it is especially illuminating when examined in light of another work, Toward Rational Exuberance: The Evolution of the Modern Stock Market by B. Mark Smith. As made clear by the title Fox's stance is generally skeptical of the efficient-market hypothesis (though Fox does often distinguish between weak and strong forms of the hypothesis, and is naturally not as hostile to the former as the latter). In…
razib | July 20, 2009Felix Salmon has been at the center of a discussion on the merits and value-add of financial innovation. He notes:
Then there's the more purely financial innovation. There are good things here too -- fractional reserve banking, factoring, common-stock limited-liability companies, tradable fungible bonds, stock-market index funds, that sort of thing. But on this front I think the low-hanging fruit was plucked decades if not centuries ago, and that we've long since entered a world of diminishing returns when it comes to the positive developments. Meanwhile, the negative developments, from…