The Paul Krugman Test

"My attitude is this: if you are getting attacked by Krugman, you must be doing something right. "

That is one of very interesting lines from this excellent interview with Chicago's Gene Fama.

萬全之策

電台DJ在節目討論近日多宗私人資料外洩事件，認為目前仍未有對應這問題的萬全之策。

If you are an economist, you will know such 萬全之策 is simply not economical and therefore should not be adopted even if it were available. Interested readers could spell out the missing steps involved in deriving the conclusion in the statement above in the comments section.

Economic Growth From a Smithian Lens

Dartmouth's Meir Kohn explains in this paper why, in order to enhance our understanding of economic change, we need to have a Smithian approach to economic growth instead of the standard Ricardian one.

The Most Intriguing Economic Analysis I Have Encountered So Far Today

And the winner goes to:

Tax Men More Than Women

According to the advocates of this idea, "this is not a policy for women against men but a policy that may favour households as a whole by helping realise a possibly more efficient allocation of duties and market activities across genders, which will increase overall household disposable income."

More here.

Hmmm, our next budget is due out next Wednesday and tax changes are expected, guess it is too late for you to do anything now, isn't it John?

A Simple Explanation of Mechanism Design

In its current form, mechanism design theory provides a general framework to study any collective decision problem. A mechanism design problem has three key inputs:

· A collective decision problem, such as the allocation of work in a team, the allocation of spectrum for mobile telephony or funding for public schools;
· A measure of quality to evaluate any candidate solution, for example efficiency, profits or social welfare;
· A description of the resources – informational or otherwise – held by the participants.
A mechanism specifies the set of messages that participants can use to transmit information and the decision that will be taken conditional on the messages that are sent.

Once a mechanism is in place, participants effectively “play a game” where they send messages (e.g., a bid in an auction) as a function of their information. The goal is to find a mechanism with an equilibrium decision outcome (sometimes required to be unique) that is best according to the given measure of quality. The strength of mechanism design lies in its generality: any procedure, market-based or not, can be evaluated within a unified framework.

More here.

Go Mason!

My alma mater has hired another young and bright economic historian from U of Pittsburg according to Peter Boettke over at Austrian Economists. His name is W. Troesken and here is his CV.

A couple of years ago I have read his piece "The Letters of John Sherman and the Origins of Antitrust" published in Review of Austrian Economics and I am impressed with his work ever since.

Joined by recent new hires like Gary Richardson and John Nye (which I have talked about in this post) George Mason is soon turning itself into "the" place to go if one wants to become an economic historian!