The Great Debate

from Nicholas Wapshott:

Not in the spirit of Hayek

By Nicholas Wapshott
May 14, 2013

It has been a bad couple of weeks for conservative social scientists. First a doctoral student ran the numbers on the study by Harvard’s Carmen Reinhart and Kenneth Rogoff that underpins austerity and deep public spending cuts as a cure for the Great Recession and found it full of errors. Then a policy analyst, Jason Richwine, who angered Senate Republicans trying to pass immigration reform with a one-sided estimate of the cost of making undocumented workers citizens, was obliged to clear his desk at the Heritage Foundation when it became known his Harvard dissertation suggested Hispanics had lower intelligence than “the white native population.”

The late conversion of a famous monetarist

By Nicholas Wapshott
June 27, 2012

The death of Anna Schwartz has been marked with reverential obituaries. Her contribution to economics was making sense of historical facts to offer a guide to what should be done today. Posterity will know her as the co-author, with Milton Friedman, of Monetary History of the United States, 1867–1960, which revolutionized our understanding of the Great Depression. The pair concluded that, contrary to conventional wisdom, the slump was caused by the Federal Reserve not pumping enough money into the economy.

The myth of the rational education market

By Peg Tyre
August 11, 2011
By Peg Tyre
The opinions expressed are her own. 

In this excerpt from “The Good School: How Smart Parents Get Their Kids the Education They Deserve,” author Peg Tyre explains how the educational “free market” created by the charter school system doesn’t guarantee parents will pick the best schools for their kids. In fact, with objective information hard to come by, even more pressure is on parents to gain — and exploit — data about school quality in order to outperform the educational market.

from MacroScope:

Political economy and the euro

February 8, 2010

The reality of  'political economy'  is something that irritates many economists -- the "purists", if you like. The political element is impossible to model;  it often flies in the face of  textbook economics;  and democratic decision-making and backroom horse trading can be notoriously difficult to predict and painfully slow.  And political economy is all pervasive in 2010 -- Barack Obama's proposals to rein in the banks is rooted in public outrage; reading China's monetary and currency policies is like Kremlinology; capital curbs being introduced in Brazil and elsewhere aim to prevent market overshoot; and British budgetary policies are becoming the political football ahead of this spring's UK election. The list is long, the outcomes uncertain, the market risk high.