Category Archives: Econ & Money

A Recipe for Increasing Human Happiness

Reading Michael Madison's Useful Models, he quotes from the Lone Gunman, quoting The Truth About Markets/Culture and Prosperity (UK/US title respectively) [evil tracking javascript code removed]:

I once debated the relationship between the social sciences with some anthropologists. We adjourned to the pub, and someone bought a round of drinks: the discussion naturally turned to the reasons why. For the economists, the explanation was obvious: the practice of buying rounds minimized transaction costs, reducing the number of exchanges between the patrons and the bar staff. The anthropologists saw it as an example of ritual gift exchange and described the many tribes that had developed similar customs. I proposed a test between the competing hypotheses: did you feel cheated or victorious if you bought more rounds than had been bought for you? Unfortunately, the economists and the anthropologists gave different answers to that question.

It seems to me that the lesson from this passage is that human happiness is maximized when economists and anthropologists drink together. Is the result generalizable? Should they marry?

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DNC Having Some Fun

YouTube – DNC Web Ad: The Number Zero, Brought To You By The Party Of N-O

Good, light-hearted fun about a depressing response to a depressing subject.

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Help Is On the Way

recovery.gov logo

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Perils of Comparative Statics

ABC News: A World Without Chocolate?

“If nothing was done, and the temperature was to rise, and the rainfalls were to change and drought became more prevalent … without looking into new farming practices, then there should be a problem, and there might likely be a problem,” he said.

In other words, if we suspend all the known laws of capitalist economics, and if we have very nasty climate change and everyone keeps their behavior utterly unchanged as a result…

No. I have enough to worry about. We may well have global warming, but we'll still have profit-maximization. This is not going on the list.

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Banks Behaving Badly

TPMMuckraker, How Theresa Hatt Caused The Financial Crisis.

I realize my headline here could apply to almost anything, but it's well worth a click.

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Some Improvement in the Credit Markets

Calculated Risk: Credit Crisis Indicators shows multiple signs of steps on the road back to sanity in the credit markets. The TED spread, in particular, is within sight of normal territory.

The biggest risks at this moment are that foreigners decide they don't want more Treasuries, or that the new team at Treasury decides to shovel too much more of our money into stupid banks by buying their worthless/unmarketable paper at high prices. Or even medium prices.

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