Wednesday, September 30, 2009

Be Careful When You Want to Use Statistics from the UN Next Time

Read this piece from the always insightful development guru Bill Easterly.

Bottom line: International agencies make up numbers in a bid to have bigger budgets. Sad.

Tuesday, September 29, 2009

Paul Romer, Charter Cities and Credible Commitment

Paul Romer, yes the new growth theory guy, quit his job at Stanford in an all-out effort to promote an idea to help developing countries grow out their adject poverty. The idea is called Charter City. The bottom line is that a developing country could sign an intenational treaty with another country so that a presumably better set of institutions could be imported to a designated special economic zone in the former.

The biggest issue of course is how to resolve the credible committment problem:
That is, how to prevent the government of the developing country to renege on its promise to allow a foriegn set of institutions to be implemented on its territory.

In this interview, Paul nicely addressess this issue. The piece is interesting throughout, but I like this bit especially:

"Economists seem to think that we should propose things that are acceptable and that political systems will pursue, but that we should avoid proposing or even discussing things that are controversial or politically incorrect.

I think we’d do our jobs better if we just said what’s true without trying to be amateur politicians. "

Thursday, September 24, 2009

What Masonomics is All About

This short commentary by Russ Robert provides a neat and crisp description what is so special about Masonomics.

Dick Posner = Keynesian ?!

Dick Posner wrote:

"Keynes was the greatest economist of the twentieth century."

Amazing, read more here. What is left of the Chicago School?

Friday, September 18, 2009

Best Line on Economics that I Have Read Today

"A little economics is a dangerous thing."

From MIT's emeritus professor Franklin Fisher "Diagnosing Monopoly" Quarterly Review of Economics and Business, 1979.

Sunday, September 13, 2009

Cute but Irrelevant Economic Studies

"A flood of cute but irrelevant studies of issues of no conceivable economic significance has been undertaken simply because a cute but irrelevant natural experiment had been conducted."

The lament is made by LSE's Willem Buiter, read more here.