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Timothy Taylor: Conversable Economist

Conversable Economist is an economics blog by Timothy Taylor, who is the author of several economics books. Timothy goes deep into details about a range of topics, backing his arguments up with statistics and data.

Teaching Current Monetary Policy

Most of the ingredients of the standard intro econ class have been pretty stable for a long time: opportunity cost and budget constraints, supply and demand, perfect and imperfect competition, externalities and public goods, unemployment and inflation, growth and business cycles, benefits and costs of international trade. In contrast, the topic of how the central bank conducts monetary policy has shifted substantially more than decade ago, in a way that makes earlier textbooks literally...

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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 "strike a meaningful balance between risk and costs," even...

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The Coming Evolution of Electric Power in the US

Even readers who are only experiencing the Texas electricity disruptions from afar may wish to consider a new report from an expert panel at the National Academy of Sciences, The Future of Electric Power in the United States (2021, prepublication copy downloadable for free).  Here's a summary of a few of the main economic  and technological changes facing the US electricity industry. 1) A Potentially Large Increase in Demand for Electricity In the last couple of decades, per capita demand...

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India: Pivoting from the Pandemic to Economic Reforms

Each year, the Economic Division in India's Ministry of Finance publishes the Economic Survey of India (January 2021). The first volume is a set of chapters on different topics: the second volume is a point-by-point overview of the last year's developments, in fiscal, monetary, and trade policy, along with developments in main sectors like agriculture, industry, and services. Here, I'll cherry-pick some points that caught my eye in looking over the first volume. Of course, any discussion of...

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Robert J. Gordon: Thoughts on Long-Run US Productivity Growth

Leo Feler has a half-hour interview with Robert J. Gordon on "The Rise and Fall and Rise Again of American Growth"  (UCLA Anderson Forecast Direct, February 2021, audio and transcript available). The back-story here is that Gordon has been making the argument for some years now that modern economic interventions, like the rise of information technologies and the internet, have not had and will not have nearly the same size effect on productivity as some of the major technologies of the past...

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Including Illegal Activities in GDP: Drugs, Prostitution, Gambling

The current international standards for how a country should compute its GDP suggest that illegal activities should be included. Just how to do this, given the obvious problems in collecting statistics on illegal activity, isn't clear. The US Bureau of Economic Analysis does not include estimates of illegal activities in GDP. However, there is ongoing research on the subject, described by Rachel Soloveichik in "Including Illegal Market Activity in the U.S. National Economic Accounts"...

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The Dependence of US Higher Education on International Students

US higher education in recent decades had beeome ever-more dependent on rising inflows of international students--a pattern that was already in likely to slow down and now is being dramatically interrupted by the pandemic. John Bound, Breno Braga, Gaurav Khanna, and Sarah Turner describe these shifts in "The Globalization of Postsecondary Education: The Role of International Students in the US Higher Education System" (Journal of Economic Perspectives, Winter 2021, 35:1, 163-84). They...

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The Minimum Wage Controversy

Why has the economic research of the last few decades had a hard time getting a firm handle on the the effects of minimum wages? The most recent issue of the Journal of Economic Perspectives (where I have worked as managing editor for many years) includes a set of four papers that bear on the subject.  The short answer is that the effects of a higher minimum wage are likely to vary by time and place, and are likely to include many effects other than reduced employment. In this post, I'll...

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Rural Poverty

Rural poverty is often overlooked. In the Spring 2021 issue of the Stanford Social Innovation Review,  Robert Atkins, Sarah Allred and Daniel Hart discuss "Philanthropy’s Rural Blind Spot," about how philanthropies have typically put much more time and attention on urban poverty than rural poverty. They write: Most large foundations are located in metropolitan areas and have built relationships with institutions and organizations in those communities. ... [M]any grant makers assume that...

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Robert Shiller on Narrative Economics

Robert J. Shiller (Nobel '13) delivered the Godley-Tobin Lectures, an annual lecture delivered at the Eastern Economic Association meetings, on the subject of “Animal spirits and viral popular narratives” (Review of Keynesian Economics, January 2021, 9:1, pp. 1-10).Shiller has been thinking about the intertwining of economics and narrative at least since his presidential address to the American Economic Association back in 2017. He suggests, for example, that the key feature distinguishing...

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