A discussion of “A Skeptic’s Guide to Modern Monetary Theory”
A sexy new economic theory appeared in the last few years promising us that government debt really is nothing to worry about.
Modern Monetary Theory (MMT) says a nation that spends, taxes and borrows in a fiat currency they control can spend as much as they need without worrying about becoming insolvent. Whatever amount of money is needed can be printed.
I dismissed it when I first heard of it because that sounded ludicrous — debt does not matter? The size of the money supply does not matter?
I like to think of ways to teach that will make the experience more engaging for both the students and myself.
The crux of the problem is the gap between teaching and learning. Me standing there saying things to you does not necessarily translate into you learning.
Holbrook and Lean (2020) are addressing this issue but also focusing on what they call a teacher-student divide due to technology.
Essentially, the college students of today have been called digital natives because the online world has been an extensive part of their lives growing up. …
A Discussion “The Social Responsibility of Business: Milton Friedman Reconsidered”
As an economics professor, I know I have some misconceptions to overcome every semester a new crop of students appear in my intro microeconomics course.
Economics is about greed. It is immoral. Capitalism is bad.
Elrick and Thies (2018) offer an example of these bad ideas being proliferated due to a bad headline incorrectly summing up Milton Friedman’s free market ideas. And over the years, that incorrect view has been tagged to anyone professing free market views in the vein of Friedman.
Adam Smith’s view of the Invisible Hand first…
Do women earn less than men because of discrimination? Or are they making choices that lead to lower pay?
Why on earth would someone choose lower pay? Because the lower pay may come with other benefits such as scheduling flexibility, less overtime hours or other quality of life options.
Sorkin (2017) says that men earn more than women because they are more likely to work in higher wage industries, and within those industries, they are more likely to work at the higher wage firms.
He examines two theories to explain the observed pay gap between men and women.
A Discussion “Initial Impacts of the Pandemic on Consumer Behavior”
Here is an early look at the impact on consumers’ income, spending and savings behavior from the dreadful economic shock of the coronavirus pandemic and shutdown.
As an economist, I never would have said it was possible to shut down the economy, so I watched in horrified awe as it happened.
Economics is classified as a social science, and we are criticized for how much we get wrong. Part of it is due to the interdependence of the economy that is more complicated than our mathematical models can capture.
A discussion of “Revisiting the Purpose of Business”
I am an economist and a lot of what drew me to the field early on is the Adam Smith story of the Invisible Hand.
Briefly, it is the idea that our self-interested nature is channeled, as if by an all-knowing Invisible Hand, to an allocation of our resources that is optimal, even better than what a planner could have come up with.
Taking something that is of questionable value, our self-interested nature, and creating something that benefits all, — it seemed so beautiful and compelled me to study economics in the…
A Discussion of “The Productivity-Wage Premium: Does the Size Still Matter in a Service Economy?”
We turn today to another piece in the puzzle of determining why it seems income inequality has grown in the United States in recent decades.
Knowing why a variable is trending a certain way makes it easier to devise policies to alter it or address it if it cannot be altered. Without an understanding of what is happening, new policies can make things worse.
A previous article I reviewed examined a feature of our economy in recent years that impacts this issue: more industries are…
A Discussion of “Does Information Break the Political Resource Curse? Experimental Evidence from Mozambique”
It seems logical that a country with no resources would be poor, so it seems puzzling when a country rich in resources is poor.
However, Armand, Coutts, et al. (2020) note the Resource Curse, defined as “a decrease in income following a resource boom,” explains this puzzle. (p. 3431)
This resource curse has been measured as a “cross-country negative relationship between per-capita GDP growth and exports of natural resources.” (p. 3432)
This is significant because we would normally expect an increase in exports to lead to…
A Discussion of “Measuring Success in Education: The Role of Effort on the Test Itself”
US students tend to score lower than we Americans would like on international tests.
For example, on the 2012 Programme for International Student Assessment (PISA) that was taken in 65 countries around the world including US high school students, our students scored 36th in math. (p. 292)
For a country that considers itself top in many measures that is a bit painful. …
A Discussion of “Snooze or lose: High school start times and academic achievement”
Or maybe not. But it still could be a good idea, according to some research by Groen and Pabilonia (2019).
The basic idea of moving the start time of high schools later comes down to two connected issues: (p. 204)
Professor of Economics at Houston Baptist University since 2010 — Want help with econ basics? Search Dr. Clardy on YouTube.