12 Articles Every Aspiring Economist Should Read | Steven Horwitz

Here are 12 important articles to help you understand sound economics, ideally before you head off to grad school in economics.

Note: Coase, Hayek, McCloskey, Alchian, Buchanan, Friedman, Lucas

Source: 12 Articles Every Aspiring Economist Should Read | Steven Horwitz

HW for EC 11 – Macroeconomics and Unemployment

For readings, please refer to my lecture notes on macroeconomics, and to Mankiw’s chapter on the natural rate of unemployment. For extra-credit questions, you may have to do further research or readings.

Please answer the following questions, and submit your answers by email by March 2, 2016.

  1. What is the most important difference between microeconomics and macroeconomics?
  2. Explain Say’s Law. Why is it important for an understanding of macroeconomics?
  3. How does Mankiw define the natural rate of unemployment?
  4. According to Mankiw, what are the four reasons why the natural rate of unemployment is not zero? Are these reasons important in the context of the Philippine economy?
  5. It is said that macroeconomics is essentially the economics of unemployment and inflation. Why, in your opinion (based on your readings or research), do policy-makers not aim for zero unemployment and zero inflation?
  6. Extra credit: What is the Okun Index of Misery? Can it be improved by including a poverty index?
  7. Even more extra credit: Construct an Okun Misery Index for the Philippine economy. How far back in time could you go? (Hint: data may be available in the websites of BSP and IMF.) Is it affected by the prevailing economic policies of various Presidents? (Anyone – even a group of up to three – answering this question well will be exempted from taking a final exam.)
  8. Extra credit: Explain in your own words the Neoclassical Synthesis (this is from previous studies in EC 12, History of Economic Thought).

Living the lousy life of a telecom consumer

Remedies against monopoly

You can almost see  the present system of announced prices, with unannounced promos maintained by the telecoms, as a form of price discrimination, a concept familiar to students of economics.

The two aren’t quite monopolies. But for the sake of discussion only, imagine that they are a two-piece cartel, a bikini in nosebleed-speak.

What can consumers do to foil a price-discriminating monopolist/cartel?

Any interesting answers out there?

Futuristic Economics

In this lecture, we will mainly explore the question of how economists know what it is they know.

First, for reference, we have the following dictionary definitions:

Science: Knowledge gained through experience; Observation, identification, description, experimental investigation, and theoretical explanation of phenomena. (Root: Latin, scientia, knowledge.)
Phenomenon: A fact perceptible by the senses.
Experiment: A test made to demonstrate a known truth.
Empirical: Based on observation or experiment.

Philosophy: The study of the fundamental nature of knowledge, reality, and existence, especially when considered as an academic discipline.
Metaphysics: The branch of philosophy that treats of first principles.
Ontology: The branch of metaphysics dealing with the nature of being. It addresses the question of what kinds of things exist.
Epistemology: The theory of knowledge, especially with regard to its methods, validity, and scope. Epistemology is the investigation of what distinguishes justified belief from opinion.

Religion: A cause or activity pursued with zeal or devotion.
Logic: The study of the principles of reasoning.
Art: Discipline that does not rely on the scientific method; creative or imaginative activity.

Second, some “tickler” questions, for which we will not necessarily have an answer:

What is thought or thinking? If it is defined as “mental activity,” where does this activity take place? If it takes place in the brain, can animals with brains think? What about plants? Can they think?
Can a machine think? Can it learn? For example, Facebook and Google collect data about how their users behave. Do the algorithms inside the servers of Facebook “think”?

Okay. Let’s get down to some business for today. Continue reading “Futuristic Economics”

Economics for the rest of us

Is economics worth studying?

I believe that it helps us understand the follies of a society.

In a lecture, I did say that a good economist should be able to explain such things as tall fences in poor countries and no fences in rich, the attractiveness of a Robin Hood figure in a society of rich and poor (or powerful and powerless), why graft and corruption exist, how potholes in the streets will get fixed, why airline food tastes bad, the “despotic” manners of teachers and security guards, how monogamy became the rule on marriage contracts, or how movie stars and world-class athletes get to enjoy high incomes.  That is quite a long list of things to explain!  But the most important thing to explain is perhaps why a country is poor or rich.

Continue reading “Economics for the rest of us”