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Friday discussion thread. (self.badeconomics)

wumbotarianI want to be the Walrasian Auctioneer when I grow up が 投稿 - stickied post

I fell victim to sunk costs. I finished a burger and was just starting on my fries. I didn't want to finish them but said to myself "yeah but I paid for it". I realized I hecked up on my way out the poor with my stomach hurting from too many fries.

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トップ新着論争中古い順Q&A

[–]PonderayFollows an AR(1) process[🍰] 12ポイント13ポイント  (4子コメント)

Does everyone realize that the US is a socialist state for doing crazy things like building roads and having a weekend where people don't have to work? No this isn't a crazy fox news video or a bunch of an-caps. It seems to be produced by socialists.

[–]UltSomnia 3ポイント4ポイント  (0子コメント)

good to know we have mutual friends on Facebook.

[–]grevemoeskrHumans are horses! 0ポイント1ポイント  (1子コメント)

Wait, so weekends, celebrities, infrastructure, military and coorporate welfare is proof of socialism? Her head is gonna explode when she looks to Denmark.

[–]PonderayFollows an AR(1) process[🍰] 1ポイント2ポイント  (0子コメント)

It's socialism all the way down.

[–]NewmanTheScofflawRA for Ethan Hunt 0ポイント1ポイント  (0子コメント)

I swear up until I google AJ+, I thought it was like a super progressive Jesus lovers from Southern California. All Jesus and then the plus is the cross. Weird that it is a Qatari company.

[–]besttrousers"Then again, I have pegged you for a Neoclassical/Austrian." 8ポイント9ポイント  (1子コメント)

Acemoglu has a new paper:

Acemoglu, Daron, Camilo García-Jimeno, and James A. Robinson. 2015. "State Capacity and Economic Development: A Network Approach." American Economic Review, 105(8): 2364-2409.

We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger. (JEL D85, H41, H77, O17, O18)

Acemoglu needs to up his troll game. The paper clearly should have been titled "Who won't build the roads: A Network Approach to State Capacity and Economic Development".

[–]lorentz65DEMAND FOR THE DEMAND GOD! 5ポイント6ポイント  (0子コメント)

Acemoglu starts all his responses to academic criticism with "u wot m8".

[–]commentsrusBring maymayday back! 7ポイント8ポイント  (2子コメント)

Ok, guys. People are starting to believe /r/PraxAcceptance isn't a serious Austrian Econ sub. What do?

Now that /r/Austrian_Economics is slowing down I want to overtake them as the most active austrian sub. How do?

I want to get /u/wumbotarian to actually submit dank praxxes when he comes across them instead of letting it fester for 6 months until /r/badeconomics and /r/badmathematics users "stumble" across it. How do?

[–]besttrousers"Then again, I have pegged you for a Neoclassical/Austrian." 2ポイント3ポイント  (0子コメント)

It's obviously serious. Did they even prax it out?

[–]xorchidsExpert at economics I know what bitcoins are 1ポイント2ポイント  (0子コメント)

If I wasn't too lazy I'd make a Hitler rant video out of this

Instead let your minds wander

[–]say_wot_againConfirmed for Google bigwig 6ポイント7ポイント  (5子コメント)

Dammit wumbo, with this and the automod, we'll have 3 stickies in about 14 hours.

[–]PonderayFollows an AR(1) process[🍰] 10ポイント11ポイント  (4子コメント)

The bad economics central sticky bank is out of control. When will they set a nominal sticky target?

[–]goodcleanchristianfu 9ポイント10ポイント  (1子コメント)

Hush now, if we let the market sort this out overall welfare will be maximized. See this dank prax:

  1. Human action is purposeful behavior
  2. Acknowledging sticky posts is human action
  3. Acknowledging sticky posts is purposeful behavior
  4. Enforcing nominal sticky targets is coercion
  5. Coercion is statist
  6. The state is an illegal and militant construct

Therefore:

Having social planners guide nominal sticky outcomes is an oppressive war against the population.

Citation:

Mises et al., "Sticky Substances and the Invisible Hand". Rothbard Journal of Applied Racism.

[–]SenorFluffySmith's Invisible Foot 1ポイント2ポイント  (0子コメント)

Therefore stickies are theft! Down with wumbo and central sticky planning!

[–]wumbotarianI want to be the Walrasian Auctioneer when I grow up[S] 1ポイント2ポイント  (1子コメント)

I need to figure out automod.

But first I need to not screw up my burger and fries Lagrangian and buy too many fries.

[–]grevemoeskrHumans are horses! 1ポイント2ポイント  (0子コメント)

buy too many fries

Does not compute

[–]prillin101 6ポイント7ポイント  (2子コメント)

I'm confused now.

IGM Polls suggest that economists think that Americans would be better off with more low skilled immigration but low skilled Americans would not be (http://www.igmchicago.org/igm-economic-experts-panel/poll-results?SurveyID=SV_5vuNnqkBeAMAfHv).

But people on this sub have cited studies where immigrants haven't depressed low-skill job wages.

/u/commentsrus has sent me a few studies about open immigration in general, but I'm still confused.

Will the average low skilled American be better off with more low-skilled immigration?

[–]CutOffUrJohnsonResident Free Market Marx-Leninist 1ポイント2ポイント  (1子コメント)

If you look at their comments on the matter they say that substantially is probably too strong. As I understand it the effects on low skill wages in the short run are slightly negative while in the long run they're slightly positive or neutral.

[–]irondeepbicycleI got 99 problems but technological unemployment ain't one 1ポイント2ポイント  (0子コメント)

I think it's fair to say 1) the exact short-run impact of low-skilled immigration on low-skilled native wages is disputed, with recent studies showing a neutral or slightly positive effect in the short run as well, and 2) Either way, there isn't a good argument against immigration to be found here, no matter the exact effects.

Even if immigrants did slightly depress native wages, it's an argument for selling visas, not limiting them.

[–]Lambchops_Legion 5ポイント6ポイント  (0子コメント)

BE, wumbo. It wasn't completely sunk cost as there was still the variable cost those fries had on your health.

[–]UltSomnia 5ポイント6ポイント  (14子コメント)

Discussion topic: how do you shills feel about legal gambling? I live in Nevada, and I think it's cool that we have these grand casinos that people can waste their money at. But, the slot machines in grocery stores/ convenience stores bother me. I mean, people are hooked on this stuff and they can't even go to the grocery store or get gas without being tempted. You see people that probably need this money wasting it away every time you go to the store. I know we all care about muh freedomz here, but we know gambling can be addictive and it seems a little exploitative to put it in places that people have to go to. I guess a lot of this applies to lotteries too (which we don't have), but I feel that machines are quite a bit more tempting.

[–]JPelter 5ポイント6ポイント  (0子コメント)

I'm wary of any proposal limiting people's freedom even if it is provably for their own good. I don't know how to solve this otherwise though.

[–]neshalchanderman 3ポイント4ポイント  (5子コメント)

We should probably ask Kate Upton's boobs.

[–]ucstruct 1ポイント2ポイント  (0子コメント)

I don't have a problem with gambling as a personal/choice or entertainment thing. I do have a problem when it becomes used in a coercive capacity and I think governments should enact laws that ban the deliberate use of gambling this way (i.e. to children, to problem gamblers). I think the use of credit cards shouldn't be allowed for this reason.

[–]xorchidsExpert at economics I know what bitcoins are 1ポイント2ポイント  (2子コメント)

So we should remove alcohol, cigarettes and potentially ice cream (depending on if you view food as an addiction) as well?

Yeah it sucks you have a problem. But why should we as a society tip toe around everyone's problems...

[–]lib-boy 0ポイント1ポイント  (1子コメント)

You could ban the sorts of gambling that look like they just exploit people's addictions and non-addicts don't play. Slot machines and lotteries come to mind. But I suppose they'd just move on to poker, blackjack and the like.

[–]potato1 0ポイント1ポイント  (0子コメント)

More likely, more gambling would go underground, like how alcohol prohibition wound up empowering the mafia.

[–]lib-boy 0ポイント1ポイント  (0子コメント)

I wonder if gambling was legal everywhere, would we see the same density of slot machines which we do in Nevada? Are they everywhere in Nevada, or just places tourists visit?

I think efforts to regulate gambling are ultimately going to be futile. I wonder if online competition can push house margins down enough that the destruction of wealth is minimized.

[–]potato1 0ポイント1ポイント  (0子コメント)

Gambling addiction is a serious problem, but banning gambling isn't a solution any more than prohibition worked to solve alcoholism.

[–]grevemoeskrHumans are horses! 0ポイント1ポイント  (0子コメント)

I like how we do it here in Denmark. Gambling is legal, but it has to be either in it's own place or secluded from the rest of the store. So you see kiosks where there is the chocolate, candy and magazines in one part of the store and then the gambling in an different room. Or in a store of its own.

[–]besttrousers"Then again, I have pegged you for a Neoclassical/Austrian." 4ポイント5ポイント  (0子コメント)

/r/PraxAcceptance has purged all numbers!

https://www.reddit.com/r/PraxAcceptance/comments/3g5fav/the_number_purge_is_complete/

[–]Homeboy_JesusAssume we have a can opener... 2ポイント3ポイント  (5子コメント)

I'm going to Vegas at the end of the month.

What's everyone's favourite game?

[–]devinejohSecretary of the Bitcoin Treasury 2ポイント3ポイント  (1子コメント)

Liars dice, they probably don't have that at Vegas though

[–]FittyakaferrariMas Kapital 1ポイント2ポイント  (0子コメント)

Hooked on that game, can't stop playing. I carry around a bag of dice everywhere I go now...I have a problem.

[–]prillin101 2ポイント3ポイント  (2子コメント)

War. It is simple with barely any house-advantage.

[–]SenorFluffySmith's Invisible Foot 2ポイント3ポイント  (0子コメント)

War is my favorite card game. And I win about half the time.

[–]grevemoeskrHumans are horses! 0ポイント1ポイント  (0子コメント)

War. War never changes.

No matter what, the highest card wins

[–]_Rory_T.K. Whitaker's Ghost 2ポイント3ポイント  (1子コメント)

For anyone interested, this is how much Icelandic Krona you can get for €1,000 http://i.imgur.com/5baacdk.jpg

[–]fmn13Moneterrorist 4ポイント5ポイント  (0子コメント)

Krona Krona bills y'all.

[–]doyleb3620 2ポイント3ポイント  (7子コメント)

So, we've heard a lot about inequality over the last couple years, and I was wondering; are there any positive objections to severe inequality, or just normative ones?

[–]PonderayFollows an AR(1) process[🍰] 4ポイント5ポイント  (3子コメント)

What kind of objections? Objections about if inequality is actually increasing or if inequality has certain effects on economic outcomes?

[–]doyleb3620 1ポイント2ポイント  (2子コメント)

The latter, if inequality has certain effects on economic outcomes.

[–]HealthcareEconomist3Krugman Triggers Me 4ポイント5ポイント  (1子コメント)

Which type of inequality? There isn't much in the way of support of wage/income/wealth inequality having negative economic outcomes in advanced economies (there is actually an illusory positive correlation between income inequality and growth), they can certainly be a sign of other problems (all three can be caused by mobility problems for instance) but are not in and of themselves issues.

Other forms of inequality can cause some significant problems. Educational inequality causes mobility issues, health inequality causes a whole host of issues but most notability significant differences in life expectancy which also reduces the progressiveness of retirement transfers.

They also stack, education inequality reduced mobility which in turn increases wealth, wage & income inequality. Health inequality increases lifetime wealth & income inequality. Some of the lifestyle factors which increase health inequality also increase education inequality.

[–]doyleb3620 1ポイント2ポイント  (0子コメント)

I was initially referring to wage/income/wealth inequality.

So, if I understand you right, this kind of inequality isn't a problem on its own, but it could be symptomatic of immobility.

Meanwhile, inequality in education and health compound those issues.

[–]laboreconomist3Camp Counselor for a Gulag 3ポイント4ポイント  (1子コメント)

Oui. Less sarcastically, there is a debate on how income inequality relates to economic growth. Additionally there is a good bit of evidence showing that economic inequality correlates with a lot of non-economic quality of life metrics like life expectancy. HE3 could probably give a better answer on that last one though. So yeah if inequality if caused by rent seeking or by a lack of equality of opportunity, there is a strong positive argument that a reduction in inequality would also raise living standards. Inequality in itself regardless of source having a negative effect on the economy is a much thornier question.

[–]doyleb3620 1ポイント2ポイント  (0子コメント)

Are there currently debates going on about that thornier question, or is it just empirically unclear? Or both?

[–]potato1 0ポイント1ポイント  (0子コメント)

There's some evidence that high levels of inequality can increase political instability, causing uncertainty and reducing investment and growth: http://www.nber.org/papers/w4486

[–]iamelbenMalthusian Enthusiast 1ポイント2ポイント  (0子コメント)

I have a meeting with the head of a PhD program at one of my top five schools next month. Freaking out a LITTLE. Haven't formally applied, but the school is a great fit for me. So aside from the obvious questions about funding and such, what questions should I ask this guy?

[–]GaiusPompeius 1ポイント2ポイント  (1子コメント)

I had a somewhat serious question, prompted by this thread in ELI5. I know there's plenty wrong with claiming the need for another WPA when unemployment is around 5%, but how do people feel about the need for more infrastructure spending? I'm often told that engineers give America's infrastructure a failing grade, but what specific kind of infrastructure spending is needed? Is the problem that our roads have too many potholes, or our bridges are in danger of collapsing? More trains, maybe? Is there a serious need for $1 trillion in infrastructure spending as candidates like Sanders claim?

[–]HealthcareEconomist3Krugman Triggers Me 1ポイント2ポイント  (0子コメント)

but how do people feel about the need for more infrastructure spending?

We certainly need different infrastructure spending, its not very well distributed currently, but the optimal amount of spending if its distribution is efficient is an open question as there has yet to be any reasonable analysis.

The ideal would probably to do something similar to what the UK recently did, create an agency responsible for analyzing infrastructure, ensure its using a decent methodology for calculating the benefits and have them suggest how much we should spend.

Is the problem that our roads have too many potholes, or our bridges are in danger of collapsing?

Infrastructure that is actually dangerous is repaired, that which may be dangerous in the future has increased inspection frequency. DOT will close actually dangerous infrastructure until its repaired, other infrastructure where there is not an imminent risk but if remedial work is not undertaken quickly it will become dangerous has a specific period of time to be repaired before they will close it.

More trains, maybe?

The US already has one of the most extensive rail networks in the world and only China moves more rail freight per capita. The lack of passenger rail development is largely down to the size of the US and population density (I don't think people really understand how large the US is, the rail journey from Washington DC to New York City is about the same distance as crossing many European countries; the same journey in the UK would take you from London to the Scottish border), there are some interesting proposals for HSR in a couple of places but given we have autonomous vehicles arriving imminently I would suggest the need for investment in passenger rail is falling not increasing.

One area I would say that is currently being neglected is FAA's NextGen which is going to eliminate the need for jet routes significantly reducing journey times for flights around the country, congress keep borrowing funding for other things.

[–]usrname42There is no God but Keynes, and Krugman is his prophet 1ポイント2ポイント  (1子コメント)

What does /r/badeconomics think of Jeremy Corbyn? He's running for leader of the Labour Party in the UK, and he's like a cross between Bernie Sanders and Donald Trump - Sanders because he's an old fairly populist candidate from the more extreme wing of the main left-wing party who's very popular with the young and on the internet, and Trump because he also seems to have energised the party's base and is leading in the polls, to the shock and amazement of everyone. Though he isn't anywhere near as anti-immigration as either of them. Some of his economic proposals are here - one that seems most badeconomics was this idea of "People's QE":

the Bank of England to be given a new mandate to upgrade our economy to invest in new large scale housing, energy, transport and digital projects: Quantitative easing for people instead of banks

any thoughts?

[–]_Rory_T.K. Whitaker's Ghost 0ポイント1ポイント  (0子コメント)

There is plenty of support among certain economists for a different kind of QE.

[–]bob625 0ポイント1ポイント  (1子コメント)

Anyone here specialize in international economics? Seems like 90% of the posts here are either US specific or outlandish claims about technological progress, which just seems odd given how big of an issue the TPP/TTIP have been in the news lately and how terrible a lot of the info being circulated about it is.

[–]_Rory_T.K. Whitaker's Ghost 0ポイント1ポイント  (0子コメント)

Us foreigners don't consider it "international economics", but anyway, most users here are American, so it makes sense.

As far as I've noticed, the TPP/TTIP hasn't been a big story outside of reddit.

[–]Tiakoneo-mercantilist 0ポイント1ポイント  (0子コメント)

Here is an issue I am curious to see from an economics perspective: the New York Times recently ran an article about how Golden Veroleum, a palm oil producer, exploited the Ebola crisis and engaged in fairly clear violations of human rights, including taking advantage of weak and corruptible public institutions to prevent any organized opposition or distribution of information. This has converted so-called subsistence farming communities (which is a misnomer, but that is another issue) which are admittedly low productivity but are highly stable, to wage earning agricultural laborers, which are also low productivity (at least in terms of return for labor) along with being highly unstable (both due to the introduction of market forces and environmental degradation).

So let's say I was able to lead a humanitarian movement to get people to really care about this. What exact policies should be advocated for?

[–]prillin101 0ポイント1ポイント  (0子コメント)

In developing countries, is fiscal stimulus focused on developing infrastructure and education usually a good idea?

[–]_Rory_T.K. Whitaker's Ghost 0ポイント1ポイント  (0子コメント)

This thread is fucking cancer: https://np.reddit.com/r/OldSchoolCool/comments/3g4l29/life_in_the_50s/ctv0hag

[–]CutOffUrJohnsonResident Free Market Marx-Leninist 0ポイント1ポイント  (0子コメント)

/r/politics talks about consumption taxes. I laughed. http://www.reddit.com/r/politics/comments/3g4hif/republicans_debated_in_ohio_the_economy_barely_came_up_polls_continue_to_show_that_americans_care_more_about_the_economy_than_any_other_election_issue_fox_news_moderators_noted_that_they_had_received_more_than_3000_economythemed_questions_on_facebook_before_the_debate/ctuuijx

To be fair the Fairtax is regressive and transfers to the poor would need to increase if it was implemented.