Wednesday, 17 September 2014

Various teaching links

1. Economists assume that firms will want to profit maximise or loss minimise.  What about otehr motivations like culture?  Here's why Economists are right at least when superstitious investors play in markets with non-superstitious ones.

2. Via John Cochrane, a long essay on whether financial markets are efficient. (answer: pretty efficient actually).

3. The power of compound interest from Tim Taylor:What's the Difference Between 2% and 3%?
4. Do agents respond to incentives?  When it comes to taxation they most certainly do. Here's Tim Taylor explaining the Double Irish Dutch Sandwich.
5. Self-explanatory:
Why Should You Major in Economics?
1. Economics is a General-Purpose Intellectual Technology. It's true that economics can't tell you whether God exists and isn't going to tell you what happens when you mix Chemical A and Chemical B, but an economics degree gives you a set of intellectual tools that can be adapted to any social problem. Economics is about a lot more than money, banking, and interest rates. Recent examples of extremely interesting applications of economics to subjects that might not, at first glance, look like what most people think of as economics include David Skarbek's work on prison gangs, Chris Coyne's work on war, and David Romer's work on whether football teams go for it on fourth down often enough. If you want to understand the social world, you should study economics.
2. Since Economics is a General-Purpose Intellectual Technology, you can do almost anything with an economics major.
3. Economics is a Complement to Information Technology. Data and computing power are getting cheaper by the second. Economics helps us sort through the data to figure out what is really going on.
4. Economics Pays Well and Is The Most Employable of the Non-Vocational Majors. In economics, you can study a lot of the same things you would study in the other social sciences and humanities, but the degree is more employable than a degree in the humanities or the other social sciences.
5. "Economics is Both Practical and Interesting." That's what Jeffrey Miron says in his 2008 discussion of the economics major. Economics is a major that strikes a very nice balance between a liberal arts education and a vocational education.

6. A great essay by Mark Lemley on how the internet has been so disruptive:

Mark A. Lemley, IP in a World Without Scarcity, Stanford Public Law Working Paper No. 2413974, March 24, 2014,

Things are valuable because they are scarce. The more abundant they become, they cheaper they become. But a series of technological changes is underway that promises to end scarcity as we know it for a wide variety of goods. The Internet is the most obvious example, because the change there is furthest along. The Internet has reduced the cost of production and distribution of informational content effectively to zero. In many cases it has also dramatically reduced the cost of producing that content. And it has changed the way in which information is distributed, separating the creators of content from the distributors.

7.  Whom gets the returns from innovation?  Lessons from The Wire on Chicken McNuggetts: video here, transcript here. Warning: very strong language.

 with detailed data by race here, "Detailed Fulton Fish Market Data (worksheet format) (dictionary)"
and the price differences by race here (
“Testing for Imperfect Competition at the Fulton Fish Market,” Rand Journal of Economics, 1995, 26, 75-92. table appendix b, page 90. Average price per fish paid, April 13th - May 8th, 1992.  73c, 64c and 80c for Asian, Black and White customers.

10. In case that anyone doubts that demand curves slope downwards and can be shifted by outside events, here's the effect of the Pope on the price of fish.  (When Catholics were forbidden to eat meat on Friday, it was a tradition for them to eat fish on Friday as a substitute for meat. They were allowed to eat fish on Friday. After the pope allowed them to eat meat on Friday, suddenly, for Fridays, they had a substitute for fish; they could choose meat instead. With a substitute becoming available, many chose the substitute instead of the traditional fish. This increased the demand for meat but decreased the demand for fish.)