Morning links of note on inequality, behavioural economics and more.
- Greg Mankiw mentions the harm principle and economics. “First do no harm” is a good principle for us to hold when considering policy, I agree.
- Details do matter though, via Mark Thoma and also a piece by John Aziz. My view of this in general would be that the “harm” comes from a “change” in policy from an “initial position” – how do we define this initial position such that something counts as change? If we define it solely as “now” then we are simply conservative, if we define it as some “ideal type” that we believe is “natural for the social system”, we are trading in ideologies. Applying the harm principle starts to get tricky! [Note: In the comments to the recent Hand posts (here, here) there has been further discussion of this]
- Tim Harford, Chris Dillow, and Noah Smith all discuss behavioural economics – plenty of interesting points in there if people want to think about choice, its relation to trade-offs, and its relation to policy.
- From Mark Thoma again, the misuse of theoretical models. Given my interest in methodology I’m certainly interested in reading this (what they establish as the ‘should’ how they find what ‘is’ in modeling) – I’m sure you all feel the same way
- And because I have to put up something about inequality here is Lane Kenworthy. The US example is an interesting one, but I would almost think that lower growth in the low and middle parts of the income distribution is itself defined as higher inequality – it is almost tautological to say one caused the other. The magnitude of the gap over there tells us that it is an issue worth looking into though!
I am not around. Over the next three weeks, there are a series of really rubbish auto-posts are coming up about “factor shares” – I normally write posts in advance, but it is unlikely I am going to add anything or move posts around to include new ones. During that time I’ll be reading and reviewing Capital and writing a summary document on income inequality measurement (both things I promise to share) – these are both sizable tasks I want to do, hence why I won’t be around too much.
However, this also means I can’t post on things I find cool. So I’ll just give you some links