My guest today is Frank Milne of Queen’s University.

Our topic for today will be unintended consequences. Frank has written a paper directed at policymakers to help them understand some of the pitfalls that economists have identified. The paper is directed at Australian policymakers, so some of the examples are Australia specific, though they generalize quite well to other countries.

We start where the paper starts, with a discussion of Australia’s heavy investment in commodity exports to China in the wake of the 2008 crisis. Many people mistook the temporary increase in demand for Australian mineral exports for a permanent change, leading them to over-invest in developing the Australian mining industry.

We go on to discuss many topics, with a particular focus on housing. We also touch on Frank’s work on Systemically Important Real Sectors (SIRS), which he is working on with co-author John F. Crean. SIRS are sectors with the potential to cause systemic problems in the banking sector. They feature high volatility of costs and revenues, which create the potential for large losses to lenders.

Related links:

The Diamond-Dybvig model (Wikipedia) and the original paper.

The Arrow-Debreu model (Wikipedia).

House of Debt: How They (and You) Caused the Great Recession, and How We Can Prevent It from Happening Again by Mian and Sufi.

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Today’s guest is Clifford Winston of the Brookings Institution. We discuss infrastructure, particularly roads and airports, and the incentives faced by their users. Bad incentives create congestion problems that can’t be solved by simply throwing more money into infrastructure; you need to fix the incentives! Clifford’s work on privatization shows how it could improve incentives and reduce the costs of congestion.

Clifford argues that self-driving cars will fix some of the problems created by bad policy. We also discuss the letter grades issued for infrastructure by the American Society of Civil Engineers and what they do and don’t tell us about the quality of American infrastructure.

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Peter Leeson of George Mason University joins the podcast today to discuss his latest book, WTF?!: An Economic Tour of the Weird.

We discuss the economic reasoning behind some of history’s strangest practices: ordeals that were used to determine innocence or guilt in medieval Europe, trials by battle that were used to settle land disputes in Norman England, wife auctions that happened during the Industrial Revolution, and the criminal prosecution of insects and rodents by ecclesiastical courts in Renaissance Italy. Continue reading The Economics of the Weird with Peter Leeson →

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My guest today is Jared Rubin of Chapman University. He is the author of Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not, which is our topic for today.

The book deals with the question of why Western Europe became wealthier than the Middle East after centuries of being poorer. The book is part game theoretic model of society, part historical narrative through the lens of that model. Continue reading Religion, Political Power, and Economic Growth with Jared Rubin →

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My guest today is Kevin Leyton-Brown, he is a Professor of Computer Science at the University of British Columbia.

Kevin’s work involves not only computer science topics such as artificial intelligence, but also game theory, and the intersection between the two. Our topic for today is an app that Kevin co-founded called Kudu, which uses double auctions to help Ugandan farmers trade more effectively. Continue reading Technology, Mechanism Design, and Ugandan Agricultural Markets with Kevin Leyton-Brown →

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Returning to the podcast is David Henderson of Stanford University’s Hoover Institution and the Naval Postgraduate School in Monterey California.

Our topic for today is the German Economic Miracle. David wrote an article on it for the Concise Encyclopedia of Economics. The article begins as follows:

“After World War II the German economy lay in shambles. The war, along with Hitler’s scorched-earth policy, had destroyed 20 percent of all housing. Food production per capita in 1947 was only 51 percent of its level in 1938, and the official food ration set by the occupying powers varied between 1,040 and 1,550 calories per day. Industrial output in 1947 was only one-third its 1938 level. Moreover, a large percentage of Germany’s working-age men were dead. At the time, observers thought that West Germany would have to be the biggest client of the U.S. welfare state; yet, twenty years later its economy was envied by most of the world. And less than ten years after the war people already were talking about the German economic miracle.What caused the so-called miracle? The two main factors were currency reform and the elimination of price controls, both of which happened over a period of weeks in 1948. A further factor was the reduction of marginal tax rates later in 1948 and in 1949.”

Continue reading The German Economic Miracle with David Henderson →

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My guest today is Jamie Pavlik of Texas Tech University.

Jamie has done a ton of research on corruption and development. She has examined corruption in the developing world, with multiple papers examining corruption in Brazil. She has also looked at international comparisons of corruption, and corruption in the United States specifically. Continue reading Corruption and Spatial Econometrics with Jamie Pavlik →

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My guest today is Thomas Sampson of the London School of Economics.

Our topic for today is the economic impact of Brexit. Long-time listeners will recall that I did an interview with Sam Bowman on Brexit immediately after the vote occurred. Think of this as a follow-up to that episode now that the dust has settled and we have a better idea of what Brexit is going to look like. Thomas has written multiple papers on the subject, including Brexit: The Economics of International Disintegration, which is forthcoming in the Journal of Economic Perspectives. Its abstract follows: Continue reading Brexit, Its Economic Impact, and International Disintegration with Thomas Sampson →

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My guest today is Karl Smith, he is the director of economic research at the Niskanen center.

Our topic for today will be market power. Karl has written a series of posts on the Niskanen center blog discussing markups and market power. The debate was sparked by a paper by Loecker and Eeckhout that claimed that average markups in the American economy had risen from 18 percent in 1980 to 67 percent today. Continue reading Markups, Market Concentration, and Monopolistic Competition with Karl Smith →

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My guest today is Fabio Rojas. He is professor of sociology at Indiana University Bloomington.

Fabio is the author of three books, the first is From Black Power to Black Studies: How a Radical Social Movement Became an Academic Discipline, published in 2007. The second book, coauthored with Michael Heaney, is Party in the Street: The Antiwar Movement and the Democratic Party after 9/11, published in 2015. The third book, Theory for the Working Sociologist, was published just recently in 2017. Continue reading Sociology and Social Science with Fabio Rojas →

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