Here is the standard mathematical framework of New Keynesian economists. Do Austrians have something similar?

econanddiscs · 2 months

By way of explanation, when I see something like this it is easy for me to evaluate the criticisms of the New Keynesian school, because they have a standard model with all the moving pieces laid out mathematically. The assumptions (sticky prices, a single capital good, etc.) are all clearly laid out for someone to comment on. I understand it might take some training/time to able to understand the paper I linked to, but it is all there.

With Austrian economics, there are lots of words, but what is assumption and what is result is never clear to me. Is there a canonical Austrian model, where everything is laid out? Otherwise I find people just talk in circles.

TinHao · 5 months

In general, the commons problem should be applied to resources that do not have clear ownership rights assigned.

For most of the resources used in production - including non renewable energy, ownership rights seem pretty clear. Coase's theorem should apply. There are obvious exceptions (clean air for example), but I don't think the tragedy of the commons applies to most transactions.

dlcarter4627 · 5 months

Yet, the best study to date finds that the portfolios of members of Congress tend to underperform the market.

Link

darohitster · 5 months

The article is (somewhat) interesting and all, and I understand that economists like to think that everything is economics, but this doesn't seem very topical

danielkah · 5 months

This was actually a problem that the Clinton administration was worried about when the government starting running surpluses. The market for Treasuries is tremendously important, what would happen if the US paid most (all) of that debt off?

besttrousers · 5 months

I am not sure I understand the argument he is making about asymmetric information and finance.

For the medical profession it seems clear - normal people are not qualified to judge the quality of the medical care being provided, which makes pricing difficult. But most of finance seems to take place between two experts (hedge funds trading against each other) or are relatively simple (a savings account).

What type financial transactions subject to asymmetric information problems is he thinking about?

azmanam · 5 months

I imagine both the piece of paper and the skills you learn are both valuable. Otherwise colleges would be much more protective of all those free online classes.

I am not sure I understand your argument about technically skilled people. They probably fared better 40 years ago too, was higher education a bubble then too? My contention is that those women's studies majors at Stanford will have a easier time finding a job than they would have if they hadn't gone to college at all. Not that they do as well as computer scientists at Stanford.

azmanam · 5 months

The price of higher education may be rising, but so are the benefits. For example look at the current difference in unemployment rates between those with a college degree and those without.

Also, when considering tuition increases over the last 20 years, make sure to think about the associated increase in financial aid. A lot of tuition increases are actually just redistributional.

Orangutan · 6 months

I tried scanning the list for any well recognized or influential economists, but couldn't find any. I'm not sure what that means...

jambarama · 6 months

What is really interesting is Daron Acemoglu's answer. He agrees stating that his opinion was changed by a recent article by David Autor. Yet Autor himself disagrees...

wang-banger · 7 months

I actually agree. However, the other side of the argument (related to the counterparty risk you mentioned), is that if retails banks were only allowed to accept deposits and then lend out that money (and not say invest it in the stock market), they would be somewhat immune to fluctuations in those assets markets, which can hit investment banks hard. There would be less transmission from asset markets to the real economy, and a more stable retail banking sector (but perhaps a less stable investment banking sector).

econanddiscs

TROPHY CASE

you'll need to login or register to do that

create a new account

login