Update: OK this post is generating lots of interest but ppl seem like they are not clicking on the link at the end of the post. This post is paraphrase of that post. Economists frequently argue that taxing the produce … Continue reading
Ok so only 1000 people in the world understand this and only 10 care about it: economics for the most part has long since given up its empirical pretensions when it comes to its ontological assumptions. Still I suspect the … Continue reading
I just finished reading a commentary by Bernard Guerrien and Ozgur Gun entitled Efficient Market Hypothesis: What are we talking about? . Inter alia the authors do an efficient job (as in 12 pages) not at demolishing the efficient markets … Continue reading
It turns out that Greg Mankiw perhaps was *mostly* right: incentives do matter. To understand to what extent and how far my dear readers you will have to do three things.
First you will have to read Mankiws original article here. Then you will have to watch this 10 minute long animated lecture here (h/t Marc Lee) and then you will have to read Iglika’s post over at the Progressive economics blog. I know that is about 30 minutes of your time dear reader but I promise you will be rewarded for doing your homework and be equipped to make a difference.
My take away from the three homework assignments is this. If we combine Iglika’s post with Marc’s video link and reflect back on Mankiw’s now infamous article in the NYT we are left with one of three conclusions.
A) Mankiw is wrong.
B) The type of intellectual work he does is akin to basic mechanical manipulation of say moving a mountain of manure from spot X to spot Y.
C) A & B are correct if, and only if, Mankiw does not generalize from what he does for work to what real professionals do for work.
Take away is that both incentives and the type of work being done matter.
Stiglitz is one of the few (liberal) economists who is not suffering from a massive bought of cognitive dissonance owing to the GFC. This hour long interview with Joseph Stiglitz is well worth watching. Don’t have an hour? Then watch the first fifteen minutes.