I'm teaching macro principles right now for the first time in about six years and it is really interesting to get back into. Right now we're talking about GDP, the way it is measured and its use, etc. Along with Prof. Anderson, I also introduce other measures of a country's well-being, including the Genuine Progress Indicator. A group called "Redefining Progress" critiques the GDP "as a shorthand indicator of progress; but the GDP is merely a sum of national spending with no distinctions between transactions that add to well-being and those that diminish it."
The group has gone to great lengths to create this new indicator (the GPI) that measures other factors that go into a country's well-being. "The GPI starts with the same personal consumption data that the GDP is based on, but then makes some crucial distinctions. It adjusts for factors such as income distribution, adds factors such as the value of household and volunteer work, and subtracts factors such as the costs of crime and pollution."
All of this is well and good, however, I have a little homework assignment that makes one wonder if it is all worth it. Number 3 on the assignment asks students to use data that I gathered from the World Development Report and find correlation coefficients between the GDP, the GPI, the HDI and the Gender Development Index.
You'll have to do the homework to see the point I'm trying to make!
Wednesday, October 31, 2007
Tuesday, October 30, 2007
Seminar: Ray Cohn
Ray Cohn, Illinois State University, will be on campus on Friday to deliver the next seminar in our department series. Ray will talk about the effects of immigration on the antebellum US. His seminar will be in room 230 on Friday, Nov 2 at 3:30 pm. Please invite your upper division econ majors. I hope to see you there.
Mike
Mike
Monday, October 29, 2007
Globalization to the Rescue?
I like to read the opinion page of Robert J. Samuelson in Newsweek. He often has interesting thoughts about current issues. In the October 29, edition of Newsweek he tackles the issue of globalization. This link, http://www.newsweek.com/id/57367 , connects to the article.
Tuesday, October 23, 2007
Ten Principles of Feminist Economics
The recently published Pluralist Economics Review (subtitled: the best of free-access economics) include a list of the "Ten Principles of Feminist Economics."
I am posting a link to it here because it contrasts itself directly with Mankiw's "Ten Principles of Economics" (as presented in his principles texts). About this and other similar lists, the authors, Geoff Schneider and Jean Shackelford write:
In mainstream economics today there is a particularly egregious recent trend toward producing lists of "key economic ideas" which tend to promote a narrowing of economic thinking, and in turn produce a more "scientific" and less inclusive approach to course contents.
A few years back, the economics faculty at UWL partook in a lengthy discussion about the "most important" "big ideas" in macro and microeconomics. I suppose we were following this new trend in economics pedagogy more generally. Results from a national economics literacy test showed that students of economics remembered squat only a few years later. The idea of focusing on the "big ideas" was to boil things down into sound bites that people would theoretically retain.
I'm not sure if the critique of this line of thought is necessary, but in line with a general assumption in microeconomics (more is better) more perspectives are welcome (especially if they are costless to discard)!
I am posting a link to it here because it contrasts itself directly with Mankiw's "Ten Principles of Economics" (as presented in his principles texts). About this and other similar lists, the authors, Geoff Schneider and Jean Shackelford write:
In mainstream economics today there is a particularly egregious recent trend toward producing lists of "key economic ideas" which tend to promote a narrowing of economic thinking, and in turn produce a more "scientific" and less inclusive approach to course contents.
A few years back, the economics faculty at UWL partook in a lengthy discussion about the "most important" "big ideas" in macro and microeconomics. I suppose we were following this new trend in economics pedagogy more generally. Results from a national economics literacy test showed that students of economics remembered squat only a few years later. The idea of focusing on the "big ideas" was to boil things down into sound bites that people would theoretically retain.
I'm not sure if the critique of this line of thought is necessary, but in line with a general assumption in microeconomics (more is better) more perspectives are welcome (especially if they are costless to discard)!
Sunday, October 21, 2007
Health Economics
I'm on sabbatical for the 2007-2008 academic year, retooling so that I can teach ECO 471 - Health Economics when I return. Here are some things I've learned so far:
1. More medical care spending doesn't lead to better health outcomes. This is found in the famous RAND experiments, cross state studies, and cross national studies.
2. The differences across income groups are larger than differences across racial/ethnic groups, but even after controlling for education, and income there are still important racial differences. Quite possibly we have at work
3. Sometimes increasing poverty can improve some heath outcomes.
4. Sometimes medical care is bad for you. After all To Err is Human.
5. Drugs are good, though not universally so. Then there is the problem of me too drugs.
6. Most improvements in life expectancy have been due to improvements in diet and public health, such as clean water, sanitation, etc.
My take away from all this is that there is a lot to improving health outcomes that is unrelated to heath care. It turns out that there are a lot of other factors that are more important. Your friends, the neighborhood you live in, your taste for risky activities.
1. More medical care spending doesn't lead to better health outcomes. This is found in the famous RAND experiments, cross state studies, and cross national studies.
2. The differences across income groups are larger than differences across racial/ethnic groups, but even after controlling for education, and income there are still important racial differences. Quite possibly we have at work
3. Sometimes increasing poverty can improve some heath outcomes.
4. Sometimes medical care is bad for you. After all To Err is Human.
5. Drugs are good, though not universally so. Then there is the problem of me too drugs.
6. Most improvements in life expectancy have been due to improvements in diet and public health, such as clean water, sanitation, etc.
My take away from all this is that there is a lot to improving health outcomes that is unrelated to heath care. It turns out that there are a lot of other factors that are more important. Your friends, the neighborhood you live in, your taste for risky activities.
Tuesday, October 16, 2007
Radiohead: "How much are we worth to you?"
Check out this fun experiment in behavioral economics by the band Radiohead, as reported in the October 4, 2007 NY Times article "Radiohead Fans, Guided by Conscience (and Budget)".
. . .
Since Sunday, when this British rock band announced that it would independently release its first studio album since 2003 as a pay-what-you-wish download on Oct. 10, there has been a perfect storm of interest among fans and industry watchers. Online and in record stores, clubs, bars and label and public relations offices, the announcement was hotly debated, a de facto referendum on what to do about illegal file-sharing and the declining music business, spurred by one of rock's most respected and forward-looking bands.
. . .
In fact, Radiohead's move is as much an experiment in consumer behavior and the socially acceptable cost of art as it is a way to distribute records. Each donation is a sort of commentary: on the nature of fandom and band loyalty, on the indier-than-thou current rock scene, and on the worth of buying -- not sampling or stealing -- new music.
''It could change the feelings about free downloading,'' said George Loewenstein, a professor of economics and psychology at Carnegie Mellon University, in Pittsburgh. ''If the band is willing to trust you to pay what's fair, all of a sudden, for the people who have been saying it's not stealing to download the song for free, it's much more difficult to rationalize that. I think it may be a brilliant move in that dimension.''
Mr. Loewenstein, whose specialty is behavioral economics and who has studied the relationship between emotions and financial decision-making, added: ''It's almost like supporting a sports team or donating to a political candidate. You're selling to the world how much you like them by how much you pay.'' Most important, he said, ''how much you are willing to pay signals something to yourself about who you are: are you exploitative? Are you a tightwad?''
Sunday, October 14, 2007
Monday, October 1, 2007
Seminar: Richard Sylla
Professor Richard Sylla will present “Comparing the UK
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