Stand-Up Economist

Stand-Up Economist Blog

• Thoughts on Roger Pielke Jr.

  Posted 7/29/10

  Just saw a Washington Policy Center talk by Roger Pielke Jr. Some thoughts:

  I think he had two main points, the first being that policymakers can’t decide what to do about climate change on the basis of climate science alone. This is an excellent point, but: No duh.
  His second main point was that reducing carbon emissions [...]

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• In the news

  Posted 7/15/10

  Research links carbon pricing and productivity
  Senate Democrats to Pursue a Smaller Energy Bill: “Some Democratic senators worry that a so-called energy-only bill investing in alternative-energy development without any limits on carbon emissions would effectively give away the popular policy items necessary for any eventual deal. “
  Project’s Fate May Predict the Future of Mining
  Animal Autopsies in [...]

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• Solow’s “computer age” quote: a definitive citation

  Posted 7/14/10

  You’re not going to think this is interesting unless you’re a stickler for details, but after being unable to track it down on the web I’ve finally definitively sourced this famous quote from Robert Solow:
  You can see the computer age everywhere but in the productivity statistics.
  The source is Robert Solow, “We’d better watch out”, New [...]

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• Chapter 1: Introduction (pages 3-14)

  Posted 7/14/10

  Summary in haiku form
  Individuals,
  Each doing what’s best for them.
  Is that good for all?

  Summary in one paragraph
  Economics is about the actions and interactions of optimizing individuals. These individuals are simply trying to satisfy their own preferences—they are not just selfish jerks, and economics is not just about money—and the Big Question in economics is [...]

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• Chapter 2: Decision Tree (pages 15-26)

  Posted 7/14/10

  Summary in haiku form
  Pick the best option
  From among all your choices.
  What’s hard about that?

  Summary in one paragraph
  Optimizing individuals look at all their options and pick the best one. We can learn about individual optimization by using decision trees to see, e.g., that sunk costs—which appear in all the outcome boxes—cannot be the sole [...]

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• Chapter 3: Time (pages 27-38)

  Posted 7/14/10

  Summary in haiku form
  A tricky question,
  Today versus tomorrow.
  Use present value.

  Summary in one paragraph
  Optimizing individuals often have to make choices over time, e.g., between money today and money tomorrow. These cannot be directly compared because of inflation and also because most individuals have a preference for sooner rather than later. In order to compare [...]

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• Chapter 4: Risk (pages 39-52)

  Posted 7/13/10

  Summary in haiku form
  Should I risk a fine?
  Or feed the parking meter?
  Expected value.

  Summary in one paragraph
  Optimizing individuals also have to makes choices about uncertainty, e.g., whether to buy insurance or whether to go gambling. An important concept is expected value, which can be thought of as the average outcome of a risky situation. [...]

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• Chapter 5: From One to Some (pages 53-64)

  Posted 7/12/10

  Summary in haiku form
  An econ surprise:
  Comparative advantage.
  Just let people trade!

  Summary in one paragraph
  Moving from a world with just a single individual to a world with multiple individuals allows us to study the benefits of trade. The example of comparative advantage—called the only surprising example in economics—shows that trade between two people can provide [...]

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• Chapter 6: Cake Cutting (pages 67-78)

  Posted 7/11/10

  Summary in haiku form
  I know that you know
  That I know game theory.
  Think strategically!

  Summary in one paragraph
  Game theory, the study of strategic interactions between optimizing individuals, has applications as diverse as warfare and business and biology and, yes, games like poker. One application of game theory is to fair division problems such as the [...]

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• Chapter 7: Pareto Efficiency (pages 79-88)

  Posted 7/10/10

  Summary in haiku form
  Is that outcome good?
  Pareto efficiency
  Is only one part.

  Summary in one paragraph
  It’s probably impossible for everyone to agree on the definition of a “good outcome”, but economists pay lots of attention to one part of “good”: Pareto efficiency, which occurs when an outcome is so good that it’s not possible to [...]

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