Putting Monetary Values on Health Costs of Coronavirus

W. Kip Viscusi delivered the Presidential Address at the (virtual) Southern Economic Association meetings last November on the subject "Economic Lessons for Coronavirus Risk Policies." The paper is forthcoming in the Southern Economic Journal; for now, it's available at the SSRN website a Vanderbilt University Law School Working Paper (Number 21-04, January 21, 2021). Viscusi is known for, as he says early in the paper, attempting to...

Brad DeLong: Worthy reads on equitable growth, February 23–March 1, 2021

Worthy reads from Equitable Growth: 1. Across a remarkably large chunk of the United States, employers seem to think that keeping their contract with their workers is an optional thing. It is very disturbing and distressing to me that the norm that contracts are to be observed appears to of fallen to the wayside to such a substantial degree. Read Equitable Growth’s “Executive action to combat wage theft against U.S. workers,” which...

2020 Some Thoughts on the Year in American Economic History

1.       Was Fogel wrong?     Hornbeck, Richard, and Martin Rotemberg. Railroads, reallocation, and the rise of American manufacturing. No. w26594. National Bureau of Economic Research, 2019.   Here is an attempt to explain the argument to a wide audience.   The NBER working paper came out last year but the paper started getting more attention this year and was presented at the meeting of the Economic History Association. Fogel...

White House Attitudes toward Fraud: Evidence from 75 ERPs

Judging from their Economic Reports, few Presidents have given much thought to the problems of fraud.  When they do, typically private sector fraud is cited as a reason for government regulation.  Prior to 2019, ERPs rarely included analysis of incentives to prevent fraud, and never explained why those incentives would be different when the victim of fraud is a private entity as opposed to taxpayers.  Does this reflect a (noneconomic) view...

Economics’ race (and other) problems

There’s been much discussion in recent days about Economics’ race problem. Some of what has come out is quite disturbing. I have not said much, but I have listened and thought. Here are a few reflections I want to add. It doesn’t surprise me that the field, as a whole, reflects the ingrained attitudes and practices of the society of which it is part. But there are some features of the discipline that magnify and aggravate the problem. First,...

ND Metro Area Employment, 2010-2020

Metro area North Dakota accounts for a large share of the population and the economic activity in the state so it is interesting to pay attention to them at times. It is actually really important to look at these three metro areas compared to each other. That is where the most informative comparisons can be made. So what do we make of the employment situation in these metro areas over the last decade. A big takeaway here is the continued...

The RMB’s Progress (in Internationalization)

The rapid ascent in CNY reserves was in 2018, with some resumption in 2020. From 2016 to 2019, Renminbi turnover rose from 4% to 4.3% (out of 200%). Figure 1: Foreign exchange reserves allocated in USD as share of total (allocated, unallocated) reserves (blue), EUR (red), CNY (green). Pink shading is Trump administration. Source: IMF COFER, various issues, author’s calculations. FIgure 2: Foreign exchange turnover share in April in USD...

A Journey in Macroeconomic Thinking

I've been thinking a bit lately about theories of the business cycle (a lot of time for reflection in these days of COVID-19). At least, I've been thinking of the way some of these theories have evolved over my lifetime and from the perspective of my own training in the field. From my (very narrow) perspective as a researcher and advisor at a central bank, the journey beginning c. 1960 seems like it's taken the following steps: (1) Phillips...

The Economics of Increasing Immigration During an Economic Crisis

The following is a guest post by Mikal Skuterud of University of Waterloo On February 14, the Federal Government issued 27,332 invitations for permanent residency to Canadian Experience Class (CEC) applicants in the Express Entry pool. To issue this unprecedented level of invitations, Immigration, Refugees and Citizenship Canada (IRCC) reached deep into the pool, providing invitations to applicants with record-low Comprehensive Ranking System...

Cautionary Tales – Martin Luther King Jr; the Jewelry Genius; and the Art of Public Speaking

One speechmaker inspired millions with his words, the other utterly destroyed his own multi-million-dollar business with just a few phrases. Civil rights icon Martin Luther King Jr (played by Jeffrey Wright of Westworld, The Hunger Games, and the James Bond films) and jewelry store owner Gerald Ratner offer starkly contrasting stories on when you should stick to the script and when you should take a risk. Cautionary Tales is written by...

Putting Monetary Values on Health Costs of Coronavirus

W. Kip Viscusi delivered the Presidential Address at the (virtual) Southern Economic Association meetings last November on the subject "Economic Lessons for Coronavirus Risk Policies." The paper is forthcoming in the Southern Economic Journal; for now, it's available at the SSRN website a Vanderbilt University Law School Working Paper (Number 21-04, January 21, 2021). Viscusi is known for, as he says early in the paper, attempting to...

Random comments

1. Part two if my critique of MMT is finally available online here. Part one is here. 2. Commenter Lin asks: If attempting to control the supply of food kills one hundred million people, then why do economists think controlling the supply of money will yield a better result? I presume Lin is referring to the Fed controlling the supply of Fed money. This is how markets work. Ford controls the supply of Ford cars, Apple controls the...

Causes of the sex drought

Among young men, declines in drinking frequency, an increase in computer gaming, and the growing percentage who coreside with their parents all contribute significantly to the decline in casual sex. The authors find no evidence that trends in young adults’ economic circumstances, internet use, or television watching explain the recent decline in casual sexual activity. Here is more from Scott J. South and Lei Lei, via the excellent Kevin...

The budget should create a balanced recovery, but instead it will be about the deficit

Some obvious points first. We are still in a pandemic, and so support measures for employees, the self-employed and businesses should continue. The chancellor should also, belatedly, increase sick pay substantially. The success of the government’s COVID strategy will depend on persuading those who otherwise cannot afford to isolate to do so. The following remarks are based on the assumption that the government’s strategy works, and there is no...

Age of marriage, weather shocks, and the direction of marriage payments

Summary Child marriage, defined as marriage before the age of 18, has been associated with a wide array of poor economic, social, and health outcomes for women and their children. It was estimated in 2014, however, that around half of all prime-aged women living in South Asia and in Sub-Saharan Africa were married as children.  This post summarizes a recent article, which has...

Rebuilding Macroeconomic Theory

Image is from Chapter 22 of Dynamic Macroeconomics by George Alogoskoufis. Martin Sandbu has written a nice piece in the FT about the latest issue of the Oxford Review of Economic Policy, which is dedicated to an idea I have been promoting for more than three decades. Multiple Equilibria matter. For David this is a ...

The Green Shoots of COVID Solidarity

Rich-country governments must now donate COVID-19 vaccines immediately to vulnerable countries, contribute more to international initiatives to ensure a genuinely global rollout, and work with pharmaceutical firms to deliver more transparent, non-exclusive licensing deals. Only this level of solidarity can restore global growth. OXFORD – In a recent letter to her G20 colleagues, US Secretary of the...

The Paradox of Pandemic Partisanship

President Biden’s Covid-19 relief proposal remains incredibly popular; if anything, it’s getting more popular as it barrels through Congress. Multiple polls show that something like 70 percent of Americans approve of the $1.9 trillion plan. It’s almost twice as popular as the Republican tax cut of 2017; it’s more popular than the Obama stimulus of 2009; it’s hard to believe now, but the Biden plan is more popular than Medicare was in the...

Noahpinion has moved to a new website!

Well folks, it's been a fun 10-year run at this little website. I'm moving on to a new platform: Substack! Here's the new Noahpinion:https://noahpinion.substack.com/Thanks for reading, and hope to see you at the new site!

For a bigger carbon dividend

New Zealand has an excellent Emissions Trading Scheme covering everything except agriculture - a non-trivial exclusion, but we can come back to that later.The ETS has a cap. Net emissions from the covered sector cannot exceed the cap. So any other regulations that affect sectors covered by the cap only shift things around within the cap and affect the ETS price. They do not affect the quantum of net emissions. The Climate Commission has been...

Age of marriage, weather shocks, and the direction of marriage payments

Summary Child marriage, defined as marriage before the age of 18, has been associated with a wide array of poor economic, social, and health outcomes for women and their children. It was estimated in 2014, however, that around half of all prime-aged women living in South Asia and in Sub-Saharan Africa were married as children.  This post summarizes a recent article, which has...

Unleashing the Potential of Antabuse

Hangovers are not healthy. So it is not only unpleasant to drink when using disulfiram, it is bad for your health. That wasn’t fully understood in the early days of disulfiram, which tarnished its reputation somewhat. Such alcohol-disulfiram interactions are no longer a real problem:Deaths from the disulfiram-alcohol (ethanol) interaction have not been reported in recent years, possibly because the dosages used are lower than those used 40...

An Employment Insurance system for the 21st century: Lesson 2, The future of work calls for better income insurance

The 2020 Speech from the Throne boldly claims that “This pandemic has shown that Canada needs an [Employment Insurance] system for the 21st century, including for the self-employed and those in the gig economy.” That is a tall order, a major overhaul of a complicated program in the span of the next couple of months, with little or virtually no consultation of stakeholders or engagement of experts outside of the government. Will Minister...

32+ Years…

Vaccine Tourism

Lufthansa is eyeing the prospect of flying customers in and out of Moscow for the sole purpose of receiving the Sputnik V vaccine against COVID-19. The offer would include two round trip tickets for the two dosses from various European cities and be priced at about 1000 euros.I was wondering when market forces would enter into Covid-19 vaccine distribution. Most countries are distributing it free to recipients and so have developed a rationing...

Rules Are Back In The Fed’s Monetary Policy Report

The Federal Reserve’s latest Monetary Policy Report just released on February 19, 2021 has a whole section on monetary policy rules.  That policy rules are back in the Report is a very welcome development. It re-initiates a helpful reporting approach that began in the July 2017 Monetary Policy Report, as I discussed here, when Janet Yellen was Fed chair. The approach continued under Chair Jay Powell in 2018, 2019 and early 2020, but it was...

r < g

r<g is an essay on the question whether r<g means the government can borrow and not worry about repaying debts. No. Abstract: A situation that the rate of return on government bonds r is less than the economy's growth rate g seems to promise that borrowing has no fiscal cost. r<g is irrelevant for the current ...

Paying for the right to be infected

Paying for the right to be infected August 14, 2020 in covid-19, economics, infection, Mechanism design Serious infectious diseases are a prime example of a public bad (non-exclusive and non-congestible). We limit them by restricting behavior and or getting individuals to internalize the externalities they generate. For example, one could mandate masks in public places. To be effective this requires monitoring and punishment....

Remembering George Schultz at a 1983 Reagan cabinet meeting

TweetFebruary 8, 2021 — In early November 1983, President Ronald Reagan was meeting with his entire cabinet, as Secretary of State George Schulz walked him through each step of an upcoming visit to Japan and Korea.  I was there as the “plus one” staff aide to Martin Feldstein, Reagan’s top economic adviser. On the occasion of Schultz’s passing, February 6, at age 100, I offer two remembered anecdotes from this meeting. Reagan and Whales Reagan...

Does GDP Report Reveal A Temporary Condition Or A “New Reality”?

Posted on 25 February 2021 Written by Rick Davis, Consumer Metrics Institute BEA Revises Fourth Quarter 2020 GDP Growth Upward to 4.09% In their second estimate of the US GDP for the fourth quarter of 2020, the Bureau of Economic Analysis (BEA) reported that the US economy was growing at a +4.09% annual rate, up 0.07 percentage points (pp) from their previous estimate and down -29.35pp from the prior quarter. Please share this article...

When bitcoin bros* talk money-printing

Our favourite non-self-identifying bitcoin bro, Anthony “Pomp” Pompliano, co-founder of Morgan Creek Digital Assets, seems quite excited this week. Yes, sure, bitcoin might be down 18 per cent since its all-time high above $58,000 on Sunday, but it turns out that bitcoin can — at least to a certain extent — weather bad news about Tether: So yeah! Remember that? Silly fools trying to argue that Tether, the dollar-pegged stablecoin that...

Sports-Betting Is Coming Back and So Is DraftKings

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The Worst Jobs Day Ever

Driven by the COVID-19 shutdown, April marked the greatest job loss in American history. The unemployment rate skyrocketed to 14.7 percent, and employers cut 20.5 million jobs. Those figures are heart-wrenching. But as awful as they are, they do not fully capture workers’ hardships. To be counted as unemployed, people must be available for work and actively seeking it. With schools closed, job opportunities withering, and social distancing the...

The CPI increased 1.4% in 2020

The 1.4% means that the CPI in December 2020 (260.474) was 1.4% higher than what it was in December 2019 (258.811).The 260.474 means that what cost $100 in 1982 cost $260.47 in December 2020.Now the CPI can go up and down during the course of the year and the Bureau of Labor Statistics calculates it for every month. So if it increased every month but then fell quite a bit in December, it might not look like there was much inflation.They...

Watch the Speed Limit

Click here to read my column in this coming Sunday's New York Times.

The new tools of monetary policy

By Haowen Chen Since the 1980s, interest rates around the world have trended downward, reflecting lower inflation, demographic and technological forces that have increased desired global saving relative to desired investment, and other factors. Although low inflation and interest rates have many benefits, the new environment poses challenges for central banks, who have traditionally relied on cuts to short-term interest rates to stimulate...

Central Banking Stories to Watch in 2019

Happy New Year, everybody! 2018 has been a quiet year for my blog, but productive on other fronts, as I've kept busy with research and my family. But here are a few central bank-related stories I'm interested in following in the new year. 1. New Governor at Reserve Bank of IndiaFollowing the early exit of Governor Urjit Patel in December, Prime Minister Modi appointed the third central bank governor in just three years: Shaktikanta Das....

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The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

In Memory of Bob Rossana

Robert “Bob” Rossana died back in February of this year. I was inadvertently left off of the university announcement email and did not hear about it until much later. Bob was my dissertation advisor. He meant a lot to me and so I want to share some thoughts. In graduate school, there were four macroeconomics courses. Two core classes and two field classes. Bob was instrumental in getting this four-course system started, as well as a “macro...

Who were the top taxpayers in 1923?

From page 71 of Daniel Marcin’s “The Revenue Act of 1924: Publicity, Tax Cuts, Response” div{float:left;margin-right:10px;} div.wpmrec2x div.u > div:nth-child(3n){margin-right:0px;} ]]> Advertisements

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...