Econ blogging is back. It’s good again!
Here is some content that I recommend you consume:
If the RBA were to raise interest rates, what would be the economic costs and benefits of that change? Strange as it is, this question doesn’t seem to be asked often, much less answered, as Nicholas points out.
My general rule has long been that the usefulness of a piece of writing declines in line with the square of the number of times it uses the word ‘neoliberalism’. David Sligar shows that I’ve been too hasty in dismissing its usefulness as a concept.
What public policy tasks should be delegated to independent government agencies, like central banks, and which should not? What are the conditions under which it is acceptable and desirable to delegate authority? These questions aren’t asked often enough, but they’re discussed in a very interesting way in this podcast.
A lot of criticism of randomised controlled trials comes off as the impotent rage of an obsolete generation, shaking their fists at the youngsters who aren’t paying sufficient deference to their work. This piece by Pritchett rises above that. The gist: the problem in developing countries is not discovering what works, it’s disseminating existing knowledge about what works. Also: it’s better to be approximately correct about a big thing than precisely right about a small thing. Semi-persuasive stuff!
If you get paid less than your co-workers, you’re more likely to quit your job. But getting paid less than the market rate – for people outside your workplace – is a much less powerful motivator to quit. This isn’t what you’d expect in a competitive labour market, but it is consistent with the idea that labour markets are ‘monopsonistic’ – employers have some power to set wages. Chuck another paper on the ‘monopsony looks like it might be a thing’ pile.
Note: I’m currently off Twitter (because it is a bad website)