I always told my economics students that while retailers often did not know the elasticity of demand for their products – how sensitive demands are to prices – they could easily infer this information by experimenting with price variations. If prices are increased a bit and firm revenues from a product fall then demands are […]
This book by George Akerlof and Robert Shiller, “Phishing for Phools” deals with the deep issues that arise in rejecting the “rationality” assumption in economic theory. If, as economic actors, we are rational and well-informed then free markets make a lot of sense. If we make irrational choices (choices that create an unforeseen disadvantage for […]
I drafted this paper for the forthcoming Beijing Forum at Peking University. Preliminary. Comments very welcome.
Climate Policy Decisions Under Uncertainty
Honorary Visiting Fellow, Department of Economics, University of Melbourne, Parkville, Vic, 3052.
Abstract: The economics of climate mitigation […]
I’ll present this paper in a week or so at the Water Forum, Wodonga. Comments more than usually welcome.
Drought, Uncertainty and Water Supply Planning
Visiting Fellow, Department of Economics, University of Melbourne, Parkville 3052.
Abstract. Water supply planning when there is a threat of uncertain drought is discussed in […]
I have never understood why events such as this happen. 267 apartments were sold in Glen Waverley in 90 minutes for $70m. It doesn’t seem to me to maximize profits to the developer – charging higher prices and stretching out the period of sale (or using a simple auction procedure) would make more sense. It […]
I attended some economics honours student presentations on Friday and what was noticeable in most of the studies was a lack of any economic theory. Yes there was usually a data base and, yes, statistical techniques were applied to that data base (along with (occasionally) some quasi-theoretical reasoning about what might or might not be […]
Distortions in the patient market for new drugs mean that drugs are overwhelmingly being developed for people who will die anyway from conditions the drugs are designed to address. There are few incentives to provide preventative medicines and this distortion costs lives.
As the Economist states:
“The data paint a bleak picture. The economists find […]
These are views of the Economic Society of Australia (Victorian Branch). My only qualification to these views is that they do not stress strongly enough that this attempted downgrade economics will be self-defeating from the viewpoint of the University’s own objectives of improving its financial viability and attracting higher ATAR students. It is difficult to […]
(From The Australian).
Blood on the floor in the dismal science: La Trobe economics professor Harry Clarke is calling it a “bloodbath”. The university is proposing to cut its economics school from 28 staff to just 10. And now everyone needs to bid for the positions that are left, including four professors battling it out […]
La Trobe University’s “Future Ready” restructuring commenced over the last 2 days. My School of Economics was dished out its medicine today.
The current School will become part of a Department of Finance and Economics (the lack of alphabetical ordering in the 2 components is significant). Proposed staff cuts in economics are from 28 to […]
There are two factors that determine participation in higher education: The level of fees charged for the service and the high school entry scores (ATARs) that determine eligibility to join particular programs – this is a price even if the price is funded by HECs. Education, at least in elite G8 universities, is […]
Bob Solow comments on Greg Mankiw’s defence of the “1%” ers and Mankiw replies. I think Solow wins the day – most of the big fortunes these days stem from the finance sector and from trading. It is not from super-marketing, deal-making types like Steve Jobs (Mankiw’s hero) although even there are spivy oh so […]
I like this piece by Robert Shiller on the excessive allocation of resources to finance. About 7.4% of all US output goes here and between 25-50% of graduates from top business schools pursue finance careers – much of it pure rent-seeking activity that adds nothing net to national output. The same trends are evident in […]
(Preliminary thoughts. Comments welcome).
I don’t know the exact answer to this but who could? We should give something on the basis of deontology (Kant’s “helping a stranger” problem – the imperative is to give at least a “little” where “little” is defined as that amount that creates “low” costs to us). This sets a […]
I find Malcolm Gladwell’s economic reasoning to be uninspired, glib, piffle*. But it is immensely fashionable and, I have read, he commands huge consulting fees. He is successfully taken to pieces here over his recent David and Goliath claims. Those who are disadvantaged can win. Err…yeah.
*To be fair I haven’t read any of his […]
Julie Novac is one of the more thoughtful IPA-Catallaxy people but she still can’t see past ideological blinkers in promoting the case for privatizing Australia Post. Why? Well because in many respects Australia Post is a natural monopoly – a firm that has technological advantages in the sense that its costs are sub-additive. It would […]
This is a nice piece on the merits and demerits of markets.
It is a discussion by Thomas Wells of Michael Sandel’s, What Money Can’t Buy: The Moral Limits of Markets. The claim by Sandler is that markets degrade certain relationships and “products”.
Wells points out that conventional economics criticises markets strongly whenever natural […]
J. King referred me to this piece by Luigino Bruni and Robert Sugden that defends capitalism from the perspective of virtue ethics. Poor old capitalism gets a rubbishing from many undergraduate Arts students because of its imperfections and outright corruption. The undergraduates note this on their iPads just before they drive off to that new […]
I watched the movie with this title on a blu-ray tonight. A fascinating tele-documentary on the GFC. Some of the prominent macroeconomists* that I had learnt to respect reveal themselves to be utter s***s who would say or do anything for a moderately large cash pay-out. A word from the wise guy: There is more […]
I am teaching a new course on “Economics and Ethics” this semester. It is oriented towards students doing joint degrees in philosophy, politics and economics – a strand of work that follows a famous degree offered at Oxford University. It came at a convenient time given that, for the last year, I have been reading […]