Economics Stuff to Investigate

Pingree's Potato Patch
Studying the Economics of Detroit

Being the intellectual vagrant I am, I regularly find myself, in either the rhetorical or literal sense, with my pockets filled with scraps of paper with little notes on them about stuff to look into at a later date. Since my dissertation takes up most of my designated economics time, I'll be dropping stuff here as I run across it. If anybody happens to find an idea they think is interesting and do some work on it, just drop my name in a "thank you" note somewhere and we'll call it even.

From a posting by Bill Stoddard, a regular on Pyramid, on 7/13/06 in response to my musings on economics and physics:

You might arrange to take a glance at David Friedman's writing on economics. He's a professor of law and economics at a law school, and before that he was a professor of economics—but he says he's never actually taken an economics course in his life. He took his Ph.D. in physics instead. I believe part of the rationale was to demonstrate intellectual ability in a field where "son of Milton Friedman" couldn't be suspected of buying him any slack. On the other hand, being Milton Friedman's son may well have helped him move over into economics once he had his Ph.D. But in any case he has the background in physics.
On the other hand, there is Murray Rothbard's argument in Man, Economy, and State that standard mathematical economics is a misconceived project from the outset — because it rests on applying calculus and calculus-based physics to human behavior, but the variables that are actually observable in economics are all discrete rather than continuous (a countable number of units of X traded for a countable number of units of Y; a countable number of units of Z produced; adding one more unit of Q raising the output of Z by n units; an exchange taking place or not). I haven't looked at Rothbard in years and years, though.

Paul Krugman referenced two articles in his August 18, 2006 column "Wages, Wealth and Politics", which dealt with the dynamics of income inequality. The first article is Partisan Politics and the U.S. Income Distribution, which finds definite differences between the effects of Democratic and Republican administrations on the expansion or contraction of income inequality and poverty. The second is Golden and Margo's 1991 paper The Great Compression: The Wage Structure in the United States at Mid-Century, which found that there was a massive decline in income inequality in the 1940s, which then held steady for about 30 years.

The July 1 2006 issue of New Scientist included an interview with Nassim Nicholas Taleb, an applied statistician who has written a new book entitled The Black Swan, his term for unpredictable events. He contrasts "type one" randomness, such as the roll of the dice, or more generally a value pulled from a characterizable distribution, which tend to cancel out over time, with "type two" randomness, catastrophic one-off events which are difficult to predict or generalize about due to their rarity and overwhelming scale and scope. The book seems potentially useful as a handle for thinking about Post-Keynesian economics, with its concept of "historical time" and focus on inherent unpredictability.

Charles I. Jones has a paper in development on "The Weak Link Theory of Economic Development", which presents a model where individual weaknesses in an economy can dominate the level of overall economic output because of a high degree of complementarity between inputs. Effectively, this means that the weakest link in the "chain" of economic production sets the "strength" for the entire economy.

David Ellerman is a fellow I met a few years ago at one of the COG meetings, and participated in some online discussions with. He's a big advocate for reorganizing the typical contractual relationship between workers and holders of capital so that the workers own the firm, and capital holders simply receive a fixed return on their investment, on the basis that since capital cannot make decisions, the only ethical basis for the operation of firms is for them to be an outgrowth of the workers. Anyway, he wrote a book fleshing out this idea, Property and Contract in Economics: The Case for Economic Democracy, which apparently served as a significant inspiration to Bill Greider's The Soul of Capitalism: Opening Paths to a Moral Economy

Driving into work this morning, I was suddenly hit by the fact that one significant piece of advice in Machiavelli's The Prince was predicated on the presence of assymetric information, so now I'm wondering if anybody has done any work looking at economic concepts underlying (or contradicted by) the strategies in The Prince.

Categories: ToDo