G11 - Week 10 - Day 2

In-class work

1. Study time
2. Ch. 5-6 assessment

Upcoming

1. Make sure to be reading news sources and collecting real-life examples of market failures 

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From the blogosphere

1. The Case for Manners
2. Greenspan and Financial Regulation

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Currently Reading

Debt: The First 5,000 Years

The definitive anthropological work on barter, by Caroline Humphrey, of Cambridge, could not be more definitive in its conclusions: “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing.” (Kindle Locations 662-664)

G11 - Week 9 - Day 1

In-class work

1. Exercises 1-3, page 133
2. Positive Externalities of Production as a Market Failure
3. Positive Externalities of Consumption as a Market Failure

Upcoming

1. Ch. 5-6 assessment on Thursday, October 20th
2. Make sure to be reading news sources and collecting real-life examples of market failures 

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From the blogosphere

1. More Migration Thoughts
2. A Trump Presidency Will Kill Thousands, Possibly Millions

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Currently Reading

Other People's Money: The Real Business of Finance

In most Western economies today, the assets and liabilities of banks exceed the assets and liabilities of the government and the aggregate annual income of everyone in the country. But these assets and liabilities are mainly obligations from and to other financial institutions. Lending to firms and individuals engaged in the production of goods and services— which most people would imagine was the principal business of a bank— amounts to less than 10 per cent of that total. In Britain, with a particularly active financial sector, that figure is less than 3 per cent. (Kindle Locations 181-185)

G11 - Week 8 - Day 1

In-class work

1. Exercises 8-18 on page 107 (HL Only)
2. The Effects of a Per Unit Subsidy
1. Exercises 19-23 on page 109
3. Calculating the Effects of a Subsidy using Linear Equations (HL Only)
1. Exercises 24-34 on page 112
4. Determining the Effects of Price Ceilings and Price Floors
5. Calculating the Effects of Price Controls using Linear Equations (HL Only)
1. Exercises 35-46

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From the blogosphere

1. The Great Californian Bag Surplus, by Bryan Caplan
2. WTO Doha deal would make world $11-trillion richer by 2030: Economists
3. Feeding people is smart: It's the best investment to do good in the world

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Currently Reading

Exodus: How Migration Is Changing Our World

I will refer to the combination of institutions, rules, norms, and organizations of a country as its social model. Even among high-income countries social models differ considerably. America has particularly strong institutions and private organizations, but somewhat weaker public organizations than Europe, and Japan has much stronger norms of trust than either of them. But though they differ in detail, all high-income societies have social models that function remarkably well. Quite possibly, different combinations work well because the components adapt so as to fit each other: for example, institutions and norms may gradually evolve so as to be well suited given the state of narratives and organizations. But such adaptation is not automatic. On the contrary, hundreds of different societies existed for thousands of years before any of them happened upon a social model capable of supporting the ascent to prosperity. Even the Glorious Revolution was not undertaken with the objective of unleashing prosperity: it was triggered by a mixture of religious prejudice and political opportunism. The English social model that emerged in the eighteenth century was replicated and improved in America. This in turn influenced social revolution in France, which exported its new institutions by force of arms across western Europe. The key point I wish to convey is that the present prosperity enjoyed in the Western world, and which is belatedly spreading more widely, is not the outcome of some inevitable march of progress. For thousands of years until the twentieth century ordinary people were poor, everywhere. A high living standard was the privilege of extractive elites rather than the normal reward for productive work. Had it not been for a fortuitous combination of circumstances that relatively recently produced a social model conducive to growth, this dreary state of affairs would most likely have continued. In poor countries it continues still.

If the prosperity of the high-income world rests on this platform, it has crucial implications for migration. Migrants are essentially escaping from countries with dysfunctional social models. It may be well to reread that last sentence and ponder its implications. For example, it might make you a little more wary of the well-intentioned mantra of the need to have “respect for other cultures.” The cultures— or norms and narratives— of poor societies, along with their institutions and organizations, stand suspected of being the primary cause of their poverty. Of course, on criteria other than whether they are conducive to prosperity these cultures may be the equal of, or superior to, the social models of high-income societies. They may be preferable in terms of dignity, humanity, artistic creativity, humor, honor, and virtue. But migrants themselves are voting with their feet in favor of the high-income social model. Recognizing that poor societies are economically dysfunctional is not a license for condescension toward their people: people can as readily earn the right to respect while struggling against a hostile environment as while succeeding in a benign one. But it should put us on our guard against the lazier assertions of multiculturalism: if a decent living standard is something to be valued, then on this criterion not all cultures are equal. (pp. 33-35)

The German radical Left Party wishes to deregulate walking

The German radical Left Party wishes to deregulate walking

"From Greek bailouts to traffic signals, Germans pride themselves on respecting the rules. But on the latter point at least, even some here believe that fixation has gone too far. All this standing and waiting by cyclists and pedestrians is killing the appeal of muscle-powered locomotion, critics say. 

Germany’s radical Left Party, the biggest opposition force in parliament, now wants to do something about this obsession. In November, the party plans to introduce a motion that would end red-light fines for pedestrians and bikers. 

There is more here, via Samir Varma."

Krugman Thinks Well.

Below is an excerpt, but the entire post is good and only a few additional paragraphs beyond the ones shown. Krugman's critical thinking skills are what are impressive here, not his actual economics one way or the other.

Make claims. Support them with evidence. Analyze and evaluate your own views and beliefs as needed.

Why Am I A Keynesian? - NYTimes.com

So, am I a Keynesian because I want bigger government? If I were, shouldn’t I be advocating permanent expansion rather than temporary measures? Shouldn’t I be for stimulus all the time, not only when we’re at the zero lower bound? When I do call for bigger government — universal health care, higher Social Security benefits — shouldn’t I be pushing these things as job-creation measures? (I don’t think I ever have). I think if you look at the record, I’ve always argued for temporary fiscal expansion, and only when monetary policy is constrained. Meanwhile, my advocacy of an expanded welfare state has always been made on its own grounds, not in terms of alleged business cycle benefits. 

In other words, I’ve been making policy arguments the way one would if one sincerely believed that fiscal policy helps fight unemployment under certain conditions, and not at all in the way one would if trying to use the slump as an excuse for permanently bigger government. 

But in that case, why am I a Keynesian? Maybe because of convincing evidence?

Pros And Cons Of Raising The Minimum Wage - The Onion - America's Finest News Source

Here is a little humor about raising the minimum wage in America. It's more of a social commentary than any actual economic reasoning, but is still funny and worth the time to read and think about.

Pros And Cons Of Raising The Minimum Wage - The Onion - America's Finest News Source

As cities around the country, including Los Angeles, New York, Chicago, and Seattle, pass or propose legislation to substantially increase the minimum wage for workers, debate has raged over the potential economic, social, and fiscal impact. Here are some of the pros and cons of raising the minimum wage: 

PROS

• Lifts workers out of poverty to brink of poverty

• One less thing to feel shitty about when leaving Chick-fil-A

• Shorter lines at pawn shops

• Higher morale among workers who aren’t casualties of cost-cutting layoffs

• Gets picketers out of pathway to Big Mac

• Bargain compared to cost of creating actual social safety net

CONS

• Workers will grow complacent and lazy if they can afford basic human needs

• Still just as insulting that your boss pays you lowest amount he or she legally allowed to

• Awkwardness of being served by cashiers wearing top hats and monocles

• 16-year-old cashier set to live like fucking king for rest of summer

• Employee benefits like paid vacation, gym membership, and yoga sessions could be slashed for thousands of line cooks and convenience store clerks

• Increases expense of exploiting workers