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BadEconomics Discussion Thread, 19 September 2015 (self.badeconomics)

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[–]laboreconomist3favorite words: labor, unemployment, trade 7ポイント8ポイント  (7子コメント)

I think /r/europe has taken the prize as my least favorite sub. Sure the anti-trade rhetoric is bad but at least no one is dying from it. The whole let me quote a couple of uncontextualizd lines from Borjas to justify my xenophobia of people fleeing war torn areas is legitimately infuriating. People are actually dying because you and the demagogues you elect refuse to accept that the belief that migration might marginally lower your standard of living is as baseless as it is callous.

[–]discoFalston 0ポイント1ポイント  (4子コメント)

Question:

Every one is better off from free trade, but can a trade deals be bad enough to the point where one or both parties being worse off? Anything in history that fits this description?

[–]Lambchops_Legion 2ポイント3ポイント  (1子コメント)

No then the trade deal wouldn't materialize in the first place.

[–]UmmahSultan 0ポイント1ポイント  (0子コメント)

Implicit in asking this question on Reddit is the assumption that all parties are really controlled by a vast conspiracy of evildoers.

[–]complexsystemsMWG is my homeboy 1ポイント2ポイント  (1子コメント)

It is always possible to construct situations where trade makes everyone worse off. Here is an example from the Standup Economist

Consider a small town with three families: Family #1 wants a snowblower, Family #2 wants a leafblower, and Family #3 wants a lawnmower; each family values their particular need at $200. It also just so happens that Family #1 owns a leafblower, Family #2 owns a lawnmower, and Family #3 owns a snowblower. These sit unused in their respective garages; each family has no use for its current equipment, and therefore values it at $0. The situation appears ripe for gains from trade!

Unfortunately, life in this small town is not so simple: the town is located in a valley that is susceptible to severe air pollution problems. Blowers and mowers emit so much pollution that use of any one piece of equipment will increase hospital bills (for asthma &etc) by $80 for each family. Three additional blowers and mowers will therefore increase each family's bills by $240.

Result #1: All three trades will still take place. For example, if Family #3 sells Family #1 its snowblower for $100 then each family gains $100 from the trade, minus $80 in hospital bills, for a net gain of $20.

Result #2: The three trades together make everyone worse off: if each family sells its unused equipment for $100 and buys its desired equipment for $100 then each family gains $200 from its trades. But each family lose $240 in hospital bills, for a net loss of $40. Conclusion: Trade can make everyone worse off!

But I'm not a trade economist, so I don't know much of the empirical literature there.

[–]say_wot_againConfirmed for Google bigwig 0ポイント1ポイント  (0子コメント)

But that's an issue of externalities. Other than environmental pollution, which is nontrivial, I find it hard to believe that any pair of countries could produce negative externalities to the other countries in a trade deal.

[–]ShootingAnElephantCry Mises and let slip the prax of war 1ポイント2ポイント  (0子コメント)

It's gotten pretty horrible these past few months. Last time I looked there were only like four non-immigration related posts. And even insinuating that immigration might not be that bad will get you downvotes. I got downvoted for saying that in some cases we are mandated by international law to take in refugees at least until their status can be decided.

Yet many of them claim that they are just defending liberal values against muslims, who oppose our western way of living, while at the same time they virtually spit on the Universal Declaration of Human Rights and the 1951 refugee convention, both of which I regard as some the greatest achievements of human civilization in the last century.

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (0子コメント)

Don't go to /r/european by mistake then.

[–]urnbabyurnNeoPanglossian 5ポイント6ポイント  (3子コメント)

Fuck y'all, I'm first. New sticky will now come out about every 48 hours.

[–]say_wot_againConfirmed for Google bigwig 0ポイント1ポイント  (1子コメント)

And yet the sticky says 46...

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (0子コメント)

About 48... Makes it harder to guess he time.

[–]Baratheon_EconomistEverything is endogenous 3ポイント4ポイント  (4子コメント)

Thoughts on Bernie in this clip?

Also: Who's your favourite for the GOP nomination? I ask about the Republicans because the Democratic race just seems dead in the water, at the moment.

[–]bdubs91Maestro Today and Maestro Forever 1ポイント2ポイント  (2子コメント)

I guess I admire his ability to own up to his ideas. No dancing around.

I do not want him to be our president, but he owns up to his ideas, which is respectable.

[–]Baratheon_EconomistEverything is endogenous 3ポイント4ポイント  (1子コメント)

I'd say he danced around; or that he's incapable of nuance. He didn't really say anything of substance.

Wanting universal healthcare and the government to not incessantly represent the interests of the rich doesn't really make you a progressive, and certainly not a socialist.

[–]bdubs91Maestro Today and Maestro Forever 2ポイント3ポイント  (0子コメント)

I should clarify I think he doesn't dance around compared to other politicians as much (compare him to Trump). He at least says policies he wants. No vague "make america great again." He is definitely vague compared to say, an economist talking about policy.

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

Foreign policy is one of the areas where the executive has massive leeway and the recent debate made most of the field look like fucking lunatics. Fiorina went off about rebuilding 6th fleet or some other insanity. Carson wants to unilaterally back Netanyahu. Bush apparently sees no issues with his brother's foreign policy. When Lindsey Graham has one of the least hawkish and most nuanced positions with Iranian relations out of all the candidates there is something horribly wrong.

I didn't count Rand Paul in this because I'm sure given enough time to speak on the matter he'd bring up something similar to not supporting the civil rights act.

[–]complexsystemsMWG is my homeboy 4ポイント5ポイント  (3子コメント)

Sticky hyperinflation is here to stay. Clearly Yellen needs to raise interest rates to curb it.

[–]commentsrusBring maymayday back! 3ポイント4ポイント  (0子コメント)

Didn't you hear? Yellen literally admitted that rates could stay zero, FOREVER!!!!!! The smoking gun:

So, I would be very-- I would be very surprised if [never escaping from the ZLB is] the case. That is not the way I see the outlook or the way the committee sees the outlook. Can I completely rule it out? I can't completely rule it out. But really that's an extreme downside risk that in no way is near the center of my outlook.

[–]bdubs91Maestro Today and Maestro Forever 1ポイント2ポイント  (0子コメント)

My poor shoes.

[–]arktouros 0ポイント1ポイント  (0子コメント)

If only these discussion threads were on the gold standard, we wouldn't ever have to worry about thread hyperinflation.

[–]511neverforget 2ポイント3ポイント  (2子コメント)

What are the economic implications of the mass immigration in Europe right now? There are so many arguments on both sides of the issue so most discussions tend to get dumb fast, but im curious to what you guys have to say about it.

[–]commentsrusBring maymayday back! 4ポイント5ポイント  (1子コメント)

Short run costs, long run benefits, as seen in previous European countries accepting Muslim refugees. This study found the benefits for low-skilled native workers took 13 years to materialize.

[–]bdubs91Maestro Today and Maestro Forever 0ポイント1ポイント  (0子コメント)

I realize that this evidence is a more apples to apples comparison, but what of Borjas's work showing that low skill immigrants in America lowered high school drop outs wages?

[–]commentsrusBring maymayday back! 1ポイント2ポイント  (1子コメント)

I'm on track with the coursework, but is there anything else I should be doing in my 1st year as an econ PhD?

I couldn't get an RA or TA position this Fall. I'm meeting veteran students, faculty, etc. slowly but surely. I've met my entire cohort and we're all friends and whathaveyou. Am I missing something? I feel like I'm missing something.

Also, is it possible to get a TA position next semester if I didn't have one now?

[–]urnbabyurnNeoPanglossian 0ポイント1ポイント  (0子コメント)

Also, is it possible to get a TA position next semester if I didn't have one now?

How would we know? Ask the program chair. My department would make offers to people in the winter for various reasons - people leave their position for another, people drop out, new classes need instructors, etc. Most who get positions in the fall are guaranteed for the entire year though. So you won't get one of their spots until next academic year unless they leave them.

[–]EveRommelDAY TUK UR JOBZ, didn't want it anyways, already replaced 1ポイント2ポイント  (2子コメント)

Ok I know this isn't economics but i need to vent.

I'm getting really freaking tired of all the jackass nuclear supporters on either side who say its such a great thing, it will get us off foriegn oil, its cheaper than X, its got no down sides!

First oil and nuclear power have almost nothing to do with each other and in no way shape or form effect the price of each other. Unless they are going to start making toyta corollas nuclear powered they will have nothing to do with the amount of oil we do or don't import.

Second if it was that freaking cheap economically people would be pumping out these facilities everywhere. Theres a problem they have massive build costs and thier operations costs grow more and more especially when you acocunt for security and waste disposal and final decommisioning. These things go over budget during construction constantly and run behind schedule more often than not.

They do have a great safety record but they have scared the living crap out of so many people that no one wants one anywhere near them, this makes it almost impossible to build any new reactors.

Rant over

[–]say_wot_againConfirmed for Google bigwig 1ポイント2ポイント  (1子コメント)

In fairness, government regulations also help prevent the building of new nuclear power plants. And nuclear (and solar, and wind) aren't replacements for oil but replacements for coal and natural gas for electricity generation, which is still very major.

[–]EveRommelDAY TUK UR JOBZ, didn't want it anyways, already replaced 0ポイント1ポイント  (0子コメント)

I agree there is some regualtory things that stand in the way but most of it falls down to its hugely expensive and no one wants them near them.

I totally agree with your last statement but its not what people say and it pisses me off as an energy nerd

[–]Babahoyo 0ポイント1ポイント  (1子コメント)

Undergrads: What class are you most excited about this semester?

mine is international development. I think we are going to start to get into the nitty gritty of how hard it is to measure anything or know anything.

[–]MoneyChurchChairman of the Kennywood Park Central Bank 0ポイント1ポイント  (0子コメント)

I'm excited to get classes, since I got screwed over by the course request system. But I'm hoping for law and economics

[–]ocamlmycamli <3 central planning 0ポイント1ポイント  (1子コメント)

I have to learn options for work. Anybody have good references on textbooks or papers to read? I know what put call parity is and that's about it.

[–]say_wot_againConfirmed for Google bigwig 0ポイント1ポイント  (0子コメント)

My undergrad degree didn't really emphasize that; they were optional.

[–]MattStalfs 0ポイント1ポイント  (0子コメント)

So I had this idea for an undergraduate thesis and I was wondering if I could get some feedback on this idea, see if you guys found it interesting.

I'm wondering if there are certain situations where going to community college for two years and then transfering to university would actually cost more money in the long run. My prax goes like this:

  1. Universities open up students to more connections in industry or acedmia.

  2. If one wants to go into academia or an industry that weighs recommendations from professors or other insiders typically not found in community college but often found in university, then the connections found at university are invaluable.

  3. In a situation such as the described, though the upfront cost is higher, it may be more beneficial in the long run to go to university because of the networking options provided.

Thoughts?

[–]EveRommelDAY TUK UR JOBZ, didn't want it anyways, already replaced 0ポイント1ポイント  (0子コメント)

Since states don't print thier own currency is it required for them to have balanced budgets or minor budget deficits vs the federal level where large deficits should be avoided but can be absorbed due to the ability to control thier own currency?

[–]psyconautics -1ポイント0ポイント  (1子コメント)

Is there one aspect of sanders platform that is good economics? Sanders supporters are making me Want to vomit

[–]0729370220937022I have flair-writers block 0ポイント1ポイント  (0子コメント)

Carbon tax