Friday, October 20, 2006

Games theory of a different sort

Would you rather take Eco 201 this way? (Hat tip to Marginal Revolution via Jared Barton)

Wednesday, October 18, 2006

Election roundup...

I love elections. Love them, love them, love them. In that spirit, I wish to offer a few election-related links that may, however tangentially, relate to economics.

1. NPR has a discussion of which U.S. House districts the national political parties have targeted in the last weeks of the campaign. This is a non-technical way of thinking about optimization of spending over multiple goods. Republicans are playing defense; Democrats, offense. The question, of course, is whether each team treats the marginal utility of a seat equally or if they're examining marginal utility over price (see this guy for an analysis of whether individual House candidates do just that).

2. Tradesports has GOP control of the U.S. Senate trading at about 67%, but control of the U.S. House at 35%. Note that both probabilities trend downward. Here's a fun question: will these markets, based in England, become more or less predictive once the federal law on Internet gambling takes effect.

3. Finally, another question of optimizing. It appears that the Republicans may abandon Mike DeWine here in Ohio. If you read any of the articles on Tailrank, you'll discover that the abandonment is not complete, but that the national GOP will reduce its advertising purchases in Ohio over the next three weeks. As a former intern for He-Who-Must-Not-Be-Named, I'm a little bit pleased. As a supporter of free trade? Not so much.

Saturday, October 14, 2006

Peace and economics

Muhammed Yunnus won the Nobel Peace Prize for the financial innovations embodied in the Grameen Bank.

Mr Yunus, an economist, founded the bank, which is one of the pioneers of micro-credit lending schemes for the poor, especially women, in Bangladesh. ...

Mr Yunus set up the bank in 1976 with just $27 from his own pocket. Thirty years on, the bank has 6.6 million borrowers, of which 97% are women, according to the Grameen website.

There is a nice introduction to the notion of microfinance here.

Friday, October 13, 2006

Rates up, rates down?

We must be near some switchpoint. Two Fed president's voice different concerns about the near term future of the economy.cvxtv

Thursday, October 12, 2006

An oil price primer

Here is a short interview with Stephen Brown, the director of energy economics at the Dallas Fed, on the recent movements in oil prices.

A Nobel defense of capitalism

Edmund Phelps describes and defends capitalism. Phelps focuses on the role of capitalism, and economic organization more generally, in nuturing change. He writes

The American and Continental systems are not operationally equivalent, contrary to some neoclassical views. Let me use the word "dynamism" to mean the fertility of the economy in coming up with innovative ideas believed to be technologically feasible and profitable--in short, the economy's talent at commercially successful innovating. In this terminology, the free enterprise system is structured in such a way that it facilitates and stimulates dynamism while the Continental system impedes and discourages it.

Monday, October 09, 2006

A Nobel in the Dismal Science...

Edmund Phelps has won the Nobel Prize in economics. Marginal Revolution has a complete run-down here. It seems to me that one of the coolest things about Phelps' work is that many students of economics know of it without knowing that they know it because of Phelps! That is likely true about a good many economic insights, but even Tyler Cowen admits "...Phelps is not an economist who has influenced my own thinking much if at all. His major contributions were absorbed, and were standard fare, by the time I was a young'un" [emphasis mine]. To be so foundational, it seems to me, is the mark of Nobel-worthy work.

Saturday, October 07, 2006

BOG board room


Why do all good monetary economist want to grow up and be on the Board of Governors? A very cool board room has to be near the top of the list, but I don't think the fellow at the end of the table is Ben Bernanke. Ben has a beard.

Dynamic game theory in action

This story, from here, is probably not true.

Three economists and three mathematicians were going for a trip by train.Before journey the mathematicians bought 3 tickets(they could count to three)and the economists only one. The mathematicians were glad their stupid colleagues were going to pay a fine. However, when the conductor was approaching their ompartment, all three economists went to the nearest toilet. The conductor, noticing that somebody was in the loo, knocked on the door and in reply saw a hand with the ticket. He checked it and the economists saved 2/3 of the ticket price.Next day the mathematicians decided to use the same strategy - they bought only one ticket, but the economists did not buy tickets at all. When the mathematicians saw the conductor they went to the loo, and when they heard knocking they handed in the ticket. They did not get it back. Why? The economists took it and went to the other toilet.

Friday, October 06, 2006

James Hamilton plays Whac-a-Mole, kind of

James Hamilton reflects on some the conspiracy theories discussed in this Washington Post article to explain the recent swings in oil prices.