Has Greg Mankiw been smoking dak?

Another short post from an anonymous The Hand poster this week – make sure to comment with your views.

I hope that I didn’t give the impression in my last post that Mankiw actually likes philosophy.  If anything, he sounds rather negative.  Economists drawing on philosophy when making policy advice is apparently a “dirty little secret”.  The point seems to be that making a case for a policy will involve value judgements, often on disputed value judgements about distribution. 

Hey, I get it.  Just about any substantive policy would help some people but harm others.  So how does Mankiw propose to avoid the need to call in some philosophy?  His proposed principle is, …. hang on, I had it a minute ago … “[f]irst do no harm”.  Eh?  Didn’t he just say that government policies pretty much always harm someone?

I guess I must be getting the wrong end of the stick.  Perhaps I am failing to distinguish tasty and sweet-smelling type 1 harms from those nasty type 2 harms.  Or something.  He does give us a couple of hints about what it is all supposed to mean.  But I really think we could ask for some more clarity about the normative foundations of his perspective.  You know, like doing a bit of philosophy.

Has Greg Mankiw been reading philosophy?

A couple of short posts from an anonymous The Hand poster this week – make sure to comment with your views.

Greg Mankiw has an article in the New York Times.  It is notable for making explicit reference to literature in normative philosophy.  Does this mean that he has been doing some homework?  Some of his earlier forays into philosophical territory didn’t show much evidence that he was aware of work in that discipline.  Some philosophically literate readers weren’t very charitable about the sophistication of what he came up with.  “Low quality freelance philosophy done by people with PhDs in economics” according to Matt Yglegias.  A “laughably sophomoric attempt at political philosophy” according to Chris Bertram.

After he finishes his homework, perhaps we can look forward to some better freelance philosophy.

Discussion Tuesday

Let us talk about New Zealand.  This is an important question, I hope you guys will give me all the answers :)

New Zealand is the type of country where taxes on land and taxes on capital are appropriate new policy tools

Once again, remember that these are points for discussion – I am not saying I agree or disagree with them.

Economics, theory, and data

This post was titled “Why data alone is not enough for economic inference”.  I was all prepared to write a post on the fact we need data and theory in order to do economic inference and create knowledge. I had links (*,*,*,*,*).  Then Noah Smith wrote this like really good post on the issue, so I’d suggest reading that.

On the other side there are those who are “too in love” with theory without any reference to data, or prior literature (which is a way of building a case for inference between theory and data).  A clear example of that comes from some of the comments that specific physicists moving into economics make – and Chris House has expressed that here.

I’d note that Read more

Are we reaching “peak Jetstar”?

Benje Patternson has been keeping an eye on the air travel statistics, and found that Jetstar’s share of the New Zealand domestic market in the December year was down on the year to June.  This raises the question, have we reached peak Jetstar and what does this mean (Infometrics link)?  After noting that there is only so much we can read into the change, especially after the phenomenal growth of recent years, Benje notes it is more important to think about these issues with regard to the domestic economy as a whole:

Regardless of whether you are an Air New Zealand loyalist, or just choose whichever airline is cheapest, it is to be hoped that Jetstar’s recent set back is not the beginning of a slow decline for the airline.  After all, for consumers and businesses alike, the competition between these two airlines is vital for keeping domestic air travel prices low and regional air connectivity high.  Even in regional centres where Jetstar does not fly, a lid is still kept on Air New Zealand pricing by factors such as the proximity of main-trunk airports with low-cost connections and even the threat of Jetstar investing in its own regional turboprop capacity.

Economists and inequality: Is it true we’ve been ignoring it?

In a recent interview with Piketty about his book Capital, the interviewer had some questions I found … strange:

Your book fits oddly into the canon of contemporary economics. It focuses not on growth and its determinants, but on how the spoils of growth are divided.

For much of the last century, economists told us that we didn’t have to worry about income inequality. The market economy would naturally spread riches fairly, lifting all boats.

Now Piketty does not suggest that economists haven’t been looking at the issue, his answers pretty clear and on point.  My problem is with the myth being pushed by the interviewer.

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