jamesz

Homecoming Queen still on top

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For all the nerds and geeks who cursed the popular people at high school but comforted themselves with the thought that future success would be theirs… Steven Levitt has bad news:

…each extra close friend in high school is associated with earnings that are 2 percent higher later in life after controlling for other factors. While not a huge effect, it does suggest that either that a) the same factors that make you popular in high school help you in a job setting, or b) that high-school friends can do you favors later in life that will earn you higher wages.

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jamesz

In favour of the ‘iwi tax’

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Fishermen on the Waikato are apparently going to be subjected to an environmental levy on their earnings by the iwi who own the river. The newspaper article seems a bit negative about the scheme and I can’t see why. To me this is a great idea on a number of levels. I just hope that the levy is a tax, rather than a one off charge. Read more

Matt Nolan

Economist magazine says legalize drugs

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As said, the economist magazine says legalize drugs (ht Carpe Diem).

This isn’t a big issue to me personally – relative to what I see as “big issues” like the current recession.  However, I can definitely see some good in legalizing (and taxing) drugs (something we were discussing here).  For some reason though, it is an issue where I think emotion has moved ahead of good policy design.

Pure regulation is often not the best solution – how much are we hurting peoples welfare by keeping many drugs illegal.  I don’t know, my goal is to have a government introducing policies that maximise welfare – and I believe that legalizing (and taxing) the use of some drugs may well be welfare enhancing.  With the Economist saying the same sort of thing I feel like I’m starting to form an opinion 😛

Matt Nolan

New blog from NZ economist

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Offsetting behaviour by Eric Crampton (ht Anti-Dismal).

Already there is a set of post on policy ignorance up.  Here is a quote from here:

Political ignorance then is ignorance about how the political system works in general rather than necessarily ignorance about any specific policy issue

I can tell you’re interested, go give it a look already 😉

Matt Nolan

Micro and macro: How to view them together

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In a comment to a post on Anti-Dismal about a post on the Standard, which I have also commented on here, Clinton Smith said:

If you think that macroeconomics is the same as microeconomics because of where the word economics comes from, you’ve got a long way to come.

I thought I should lay down what I think – and so I did in the comments at Anti-Dismal:

Methodologically macroeconomics should simply be applied microeconomics. Microeconomics is the general discipline, and macroeconomics is a specific application (and set of value judgments) that can be used for (economy-wide) policy.

Trying to do macro without an understanding of micro is like trying to fix a machine without knowing how it works – hence why so many “non-economists” (I hate that term) get lost.

This is how the macro-micro distinction rolls around in my head – but of course, it is not necessarily that simple.  Do you guys have any idea about how I could improve this distinction – I think a set of posts might be in order for discussing this issue.

Matt Nolan

Cartoon: Economic debate

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I am still too dazed and confused to provide even a blog level of debate. As a result, here is a comic (ht SMBC):

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