Friday, February 13, 2009

Econlinks for the weekend

  • It is a very important research topic, granted (and, my hunch has always been and continues to be that 'deliberate practice' explains most of the observed high achievements), but my feeling is that findings & methodology therein are so far overrated (and over-mediatized) and that much more research is needed to get a satisfying, not to say definitive, answer... One ought to welcome however the distinction between plain hard work throughout (the 99% perspiration...) and high productivity hours (the nap after lunch?...).

  • Gary Becker and Kevin Murphy with more words of wisdom: there's no stimulus free lunch. Murphy continues from his ideas put forward here. I guess the debate is really or mainly about the multiplier size; the fact that Becker and Murphy insist so much that it is much lower than the advocated 1.5 should get other economists paying more attention (including some European economists I know who also believe the effect of the multiplier might well be that large...)

  • "I think we economists love to speculate about heterodox theories when times are good and we feel free to discuss experimental alternatives to economic orthodoxy (and nobody is paying us much attention during good times anyway). But when the global economy is in free fall and everyone else seems ready to throw each and every Econ 101 principle out the window, we get desperate to save the core principles that lead to prosperity and development." Read more in Easterly's excellent piece on the economists' returning home.

  • Esther Duflo sometimes adventures in areas where she does not necessarily have a serious comparative advantange (see 3rd bullet point here for the area where one shouldn't start an argument with her...) I don't see how proper incentives (here disincentives...) can be given by imposing pay caps in the financial sector, what is, unfortunately, happening de facto now (at least if the respective financial institution receives governmental help). Philippon's point is well taken (and the co-authored research this is based on looks pretty sound), but he stops short from recommending any policy initiatives that would involve income ceilings, despite obtaining that financial guru's were paid too much. Au contraire, I think Posner and Becker ('at any level' is well worth bookmarking...) are the ones right in this context.

3 comments: said...

un tezaur :)
am ce citi in metrou..

Anonymous said...

I think Duflo is pretty smart in general actually, development just happens to be her hobby.

Sebi Buhai said...

Right... though I don't think I was ever in disagreement with your statement :-).