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  • Coase Conference


    A conference in honor of Ronald Coase's work will be held at U of Chicago starting this Friday. Here is the link to agenda and papers for the conference. HT to Kempton for the pointer.

    A few words of appreciation on Coase [...]
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    Posted: December 02, 2009, 5:01am EST

  • What is Austrian Economics?

    NYU's Austrian Economics guru Mario Rizzo has this to say. Here is the entry Mario wrote for the New Palgrave.

    I met Mario once when I was attending the FEE Austrian seminar, a real scholar and gentleman. It was also at FEE where I met [...]
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    Posted: November 24, 2009, 2:07am EST

  • Go Mason

    My alma mater George Mason has a world ranking of 39 in business and economics according to this report. [...]
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    Posted: November 21, 2009, 1:27pm EST

  • Cutie Economics: A Review of SuperFreakonomics

    The title of this blog is the same as the book review I wrote for the Hong Kong Economic Journal's web version (not available in its hard copy). Here is the acutal URL. A good friend told me that as the paper would take the piece out in a [...]
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    Posted: November 20, 2009, 8:21pm EST

  • Doug North on Williamson and Ostrom

    [...]
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    Posted: November 18, 2009, 3:45am EST

  • NIE

    No, I am not talking about that NIE (New Institutional Economics). I am talking about New Interventionist Economics.

    Have not head of it? No problem, I have not either before I come across this paper by Austrian economist Roger Koppl. Enjoy! [...]
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    Posted: November 17, 2009, 1:24am EST

  • Misled by Transaction Costs

    That is the title of a paper delivered at a conference held GMU Law School by UCLA professor Harold Demsetz.

    Bottomline:

    Organizational efficiency cannot be established simply by knowing the properties of organizational forms...The second erroneous notion is that the efficiency of an organizational form can be [...]
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    Posted: November 05, 2009, 8:57pm EST

  • A Bad Day

    An old friend called. He told me he was fired by his company. I was and am still in shock.

    One is never prepared for such things in life. Think of it this way. As an free market economist, you talk about how a person's separation from his job' [...]
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    Posted: October 28, 2009, 10:59am EDT

  • The Pacific

    [...]
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    Posted: October 27, 2009, 5:06am EDT

  • Best Sentence I Have Read Today (and yes it is related to Superfreakonomics)

    "Ancient Romans watched gladiators in much the same way that we read angry bloggers."

    This is from Nathan Myhrvold former Chief Technology Officer at Microsoft.

    The line refers to the controversies stirred up by Chapter Five of the sequel to Freakonomics, Superfreakonomics. Read more for yourself [...]
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    Posted: October 21, 2009, 10:06pm EDT

  • Oliver Williamson, Elinor Ostrom and New Institutional Economcis

    This is a piece I wrote for the Hong Kong Economic Journal. The piece would only appear on the website of the paper, not the hard copy. Tell me what you think.

    And yes, I still think that Professor Steven N S Cheung has a shot at the [...]
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    Posted: October 13, 2009, 8:37pm EDT

  • Be Careful When You Want to Use Statistics from the UN Next Time

    Read this piece from the always insightful development guru Bill Easterly.

    Bottom line: International agencies make up numbers in a bid to have bigger budgets. Sad. [...]
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    Posted: September 30, 2009, 6:19am EDT

  • Paul Romer, Charter Cities and Credible Commitment

    Paul Romer, yes the new growth theory guy, quit his job at Stanford in an all-out effort to promote an idea to help developing countries grow out their adject poverty. The idea is called Charter City. The bottom line is that a developing country could sign an intenational treaty with [...]
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    Posted: September 29, 2009, 9:03pm EDT

  • What Masonomics is All About

    This short commentary by Russ Robert provides a neat and crisp description what is so special about Masonomics. [...]
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    Posted: September 24, 2009, 11:08pm EDT

  • Dick Posner = Keynesian ?!

    Dick Posner wrote:

    "Keynes was the greatest economist of the twentieth century."

    Amazing, read more here. What is left of the Chicago School? [...]
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    Posted: September 24, 2009, 10:53pm EDT

  • Best Line on Economics that I Have Read Today

    "A little economics is a dangerous thing."

    From MIT's emeritus professor Franklin Fisher "Diagnosing Monopoly" Quarterly Review of Economics and Business, 1979.' [...]
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    Posted: September 18, 2009, 3:50am EDT

  • Cute but Irrelevant Economic Studies

    "A flood of cute but irrelevant studies of issues of no conceivable economic significance has been undertaken simply because a cute but irrelevant natural experiment had been conducted."

    The lament is made by LSE's Willem Buiter, read more here.' [...]
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    Posted: September 13, 2009, 10:11pm EDT

  • Cheung's Theorem

    "The havoc that inflation or deflation would cause is negatively related to the degree of freedom individuals in an economy enjoy in choosing contractual arrangements that best fit their interests."

    This is from Professor Steven N S Cheung's column (in Chinese) today. Read more here.[...]
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    Posted: August 31, 2009, 8:58pm EDT

  • Raising Rival's Cost, Yummy Edition

    According to a report in the latest edition of Businessweek:

    "Rather than wait to be forced into caloric transparency, Yum! Brand is embracing it. The Louisville company, owner of KFC, Taco Bell, Pizza Hut, Long John Silvers, and A&W, has pledged to post calorie counts at its 3163 corpoate-owned" [...]
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    Posted: August 12, 2009, 8:17am EDT

  • Superfreakonomics

    Just when you think Freakonomics is freaky enough, the authors of Freakonomics have a new book due out later this year which guarantess to freak you out more. It is called Superfreakonomics.

    The publisher's page for the book is here.' [...]
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    Posted: July 28, 2009, 4:47am EDT

  • Phelps on Hayek

    Back in 2008, Nobel Prize winner Ed Phelps delivered a lecture on Hayek in Vienna!


    [...]
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    Posted: July 27, 2009, 3:57am EDT

  • Exploitation, Minimum Wage, Hong Kong

    Hong Kong is contemplating to introduce minimum wage, see here.

    Now, Hong Kong's economy has consistently been ranked as one of the freest economies, if not the freest economy in the world.

    Economic theory tells us that the presence of competition renders it impossible for exploitation to' [...]
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    Posted: July 16, 2009, 9:46am EDT

  • Economists Have No Clothes


    No, I did not say that. Apparently the title of this post is the paper title of a paper Jim Buchanan delivered at a recent History of Economic Thought Conference in Richmond.
    According to a brief write-up of Buchanan's presentation, this is what he' [...]
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    Posted: July 15, 2009, 5:54am EDT

  • Tyler Cowen vs Justin Lin

    Lin wrote in this piece that small banks are good for developing economies, Cowen is reluctant to endorse Lin's view.

    The gist of Cowen's argument is this:

    But what if those institutions (Gary's note: big banks) start to arise naturally, from market forces, as indeed they' [...]
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    Posted: July 12, 2009, 10:20pm EDT

  • Are You a Free Market Supporter? A Self-test

    Question: Do you think the government should support businesses or the free market?

    Yes or No?

    The answer can be find in this book, and this is a recent profile of one of the authors the book. And yes he is from Chicago's Business School.[...]
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    Posted: July 12, 2009, 9:34pm EDT

  • Micky Economics

    Hong Kong's legislators would soon vote on whether to allow the government to convert its loans to the territory's Micky Land into equity according to this story.

    What amazes me is the kind of argument that has been used to support the construction of Mickey Land in the [...]
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    Posted: July 09, 2009, 10:04pm EDT

  • Plastic Bag Charge and the Alchian-Allen Theorem

    HK is slated to introduce its plastic bag charge at retail outlets starting tomorrow. Here is the story.

    What interests me is whether, with a fixed charge of 50 cents per bag, and say if you are contemplating to buy just one item(suppose you need a bag for [...]
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    Posted: July 05, 2009, 10:22pm EDT

  • Social Planner and Overconsumption

    In my last post here, I explained why overconsumption is a problematic concept.

    But there is a deeper conceptual issue here. One that goes to the heart of traditoinal welfare economics. It is the presumed existence of a social planner whose objective function embodies the interests of all [...]
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    Posted: July 03, 2009, 10:21pm EDT

  • A Good Book, Overconsumption and Really Big Firms

    I am half way through Justin Fox's excellent book on the development of the idea of efficient financial market "The Myth of the Rational Market."

    A line on page 157 caught my eye:

    "Galbraith(Gary's note: he is referring to Harvard economist John Galbraith)...likened American corporate executives to" [...]
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    Posted: July 01, 2009, 8:50pm EDT

  • No Free Lunch

    æ°‘å”馮檢基批評，政府éŽåŽ»ä¸€å¹´å…¬å±‹è¶Šå»ºè¶Šå°‘，醫療事故頻ç¹ï¼Œæœªæœ‰ç©æ¥µè£½é€ å°±æ¥­ï¼Œæ›´ç„¡å›žæ‡‰å°ç­æ•™å­¸è¨´æ±‚。 More here.

    So what should we do about it? I bet Mr Fung is going to say that we need more resources to be devoted to building new public housing, to buying better medical equipment as well as employing more medical staff, and more jobs for building [...]
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    Posted: June 30, 2009, 4:36am EDT

  • Go, Go, George Mason

    According to this latest ranking of Economics Dept, my alma mater is assigned a rank of 85 among the top 10 percent of top level institutions (it's a world wide ranking, not just confined to higher learning institutions in the US).

    It is ranked above:

    Indiana [...]
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    Posted: June 22, 2009, 9:38pm EDT

  • Wow! Samuelson on Economic History

    This bit from an interview of Nobel lauerate Paul Samuelson really surprises me:

    Very last thing. What would you say to someone starting graduate study in economics? Where do you think the big developments in modern macro are going to be, or in the micro foundations of modern macro? [...]
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    Posted: June 18, 2009, 9:29pm EDT

  • Larry White Moves to George Mason

    Great news, Larry White, who has done a lot of work in advancing the theory of free banking will start teaching at my Alma Mater starting next fall.

    Here is a bio of Larry in Wiki, and here is Larry's dissertation, "Free Banking in Britain" available' [...]
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    Posted: June 09, 2009, 9:01am EDT

  • Cheung's Theorem

    政府什么也ä¸è¦ç®¡å—？ä¸æ˜¯çš„，政府还è¦åšçš„项目多得很。我è¦é‡å¤æ­¤å‰è¯´è¿‡çš„：医疗行业的一个大麻烦，是求医的人往往ä¸çŸ¥é“购买的是些什么。鱼目大å¯æ··ç ï¼Œæµªå¾—虚å之辈历æ¥ä¸å°‘。在æƒåˆ©ä¸Žè´£ä»»ç•Œå®šè¿™é‡è¦è¯é¢˜ä¸Šï¼Œæ”¿åºœçš„工作é‡è¦ã€‚但他们è¦æ‡‚得分辨哪些工作他们è¦åšï¼Œå“ªäº›åº”由市场处ç†ã€‚原则上，这分辨ä¸éš¾ï¼Œåªæ˜¯åšèµ·æ¥ï¼Œæ”¿åºœçš„官员会因为自己的æƒåŠ›ä¸Žåˆ©ç›Šï¼Œæ¼ è§†äº†ç¤¾ä¼šæ•´ä½“的需è¦ã€‚因为这一点，我对中国医疗改é©çš„å‰é€”ä¸çœ‹å¥½ã€‚鱼目既然容易混ç ï¼Œæ··æ°´æ‘¸é±¼çš„行为容易产生。

    This is from Professor Steven N S Cheung's latest column, more here.

    Several implications follow:

    1. In situation where the problem of information asymmetry is serious, and where the government intends to intervene , we should expect more officials to act in ways that contravene' [...]
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    Posted: June 08, 2009, 9:22pm EDT

  • How a Law Student, with No Prior Knowledge in the Auto Industry, Helps Restruture it

    A very, very, very interesting read. More here. [...]
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    Posted: June 03, 2009, 10:42pm EDT

  • Why the Worst Get On Top

    The title of this post of course is taken from a chapter in Hayek's Road to Serfdom.

    Now Bryan Caplan has offered another answer in addition to that offered in Hayek's work:


    [A]ll successful politicians are big liars by the absolute standard we routinely apply to the [...]
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    Posted: June 02, 2009, 9:14pm EDT

  • Nice Cover



    A soon to be released book named In Fed We Trust has a really nicely

    designed cover. You can pre-order the book here.

    [...]
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    Posted: May 31, 2009, 9:03pm EDT

  • The Most Damning Blogpost I Have Read Today

    At least now we have finally gotten away from personal attacks, so let me say that Sachs is an inspirational and hard-working intellectual. His ideas on Africa are only sometimes totally wrong, the other times they are only fatally wrong.

    More here. Blows again are exchanged between Columbia's' [...]
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    Posted: May 31, 2009, 2:23am EDT

  • Best Line I Have Read Today

    "Besides, the sight of two middle-aged white men mud-wrestling on African aid may entertain the audience."

    The two middle-aged white men refered to in the above quote are no light-weights, they are Columbia's Jeff Sachs and NYU's Bill Easterly.

    Read more about their latest exchanges here.


    [...]
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    Posted: May 26, 2009, 10:03pm EDT

  • Eat Your Way to Eternity

    Gary Becker wrote:

    the negative health consequences of being overweight and even obese will generally be significantly lower for children than for adults. The reason is that aside from very extreme obesity, the really harmful effects to overweight children will not usually kick in for another 25 or more [...]
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    Posted: May 26, 2009, 9:08pm EDT

  • So you want to learn cutting edge monetary theory without all the high-powered math?

    Then you should take a look at these lecture (scroll down, the notes are at the very bottom of the page) notes written by Neil Wallance, one of the founding members of the New Classical School, for his undergraduate monetary theory course.

    Enjoy! [...]
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    Posted: April 07, 2009, 9:56pm EDT

  • Listen Up Secretary Geithner

    A Utopian re-regulated financial sector, as envisaged by some pundits, would seek to avoid financial institutions’ taking excessive risks that could create systemic fragility, and give supervisors enough power to forestall any bubbles they saw developing. This regime would continue to facilitate the smooth and safe channeling of savings into [...]
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    Posted: March 27, 2009, 10:28pm EDT

  • How To Win a Nobel Prize in Less than 30 Pages?

    If you can do this.

    HT to Peter Klein at Organization and Markets. [...]
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    Posted: March 26, 2009, 8:56pm EDT

  • Sentence to Ponder

    Back in graduate school circa early 1990s when I was taking Macro II taught by Tyler Cowen, I vividly remembered he once decribed the RBC (Real Business Cycle) view of what happened during the Great Depression in the 1920-30s as follows:

    All workers decide to take a long [...]
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    Posted: March 26, 2009, 4:57am EDT

  • What Do You Call a Nerd in Ten Years?

    BOSS.

    Source here.

    It's a story about Quants, yes the math genius/nerds (delete whatever is appropriate) that have some commentators blamed them for indirectly causing the current financial mess through their math models which help create all the complex financial products.

    But if math geeks and' [...]
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    Posted: March 10, 2009, 10:07am EDT

  • Advice from the Thugs to the Treasury Secretary Geithner

    This is the best part:

    The unanimous opinion among The Thugz was that you must base your work around a time-tested law of ghetto capitalism: losers must die in full view. What? This doesn’t make sense. O.K., well, let me explain. Your first mistake (more accurately, your predecessor’s error) [...]
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    Posted: February 23, 2009, 8:17pm EST

  • Books I Have Been Reading

    1. Animal Spirits by Yale's Bob Shiller and Nobel Laurate George Akerlof.

    2. The Science of Fear by Daniel Gardner. I am more and more interested in the behavioral aspects of economics, though I do not necessarily suscribe to their policy prescriptions.

    3. Bernanke's Test [...]
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    Posted: February 20, 2009, 9:57pm EST

  • Clash of Economic Ideas

    For those who are interested in the debate of the 1930s on the potency of different economic policies in fending of economic downturn, which of course is relevant to the current debate on how to react to the current economic crisis, Austrian economist Larry White at U of Missouri St. [...]
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    Posted: February 20, 2009, 9:44pm EST

  • Dr Doom

    An interview of NYU's Nouriel Roubini, aka Dr Doom, in WSJ, more here.

    Here are the best bits:

    What exactly is Nouriel Roubini's economic philosophy? "I believe in market economics," he says, with some emphasis. "But to paraphrase Churchill -- who said this about democracy and political" [...]
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    Posted: February 20, 2009, 9:40pm EST

  • Digusting Line of the Day, and the Winner Goes To

    Dave Wenhold, of the American League of Lobbyists, said lobbyists bring expertise to the job. "Just because you are registered to lobby doesn't mean that you are evil, " he said.

    I got this line from this post up at Cafe Hayek.' [...]
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    Posted: January 29, 2009, 1:48am EST

  • So You Think the Government Can Spend Its Way Out of Our Current Predicament?

    Even FDR's treasury secretary, Henry Morgenthau, said in 1939, "We have tried spending money . . . and it does not work . . . we have just as much unemployment . . . and an enormous debt to boot." Nor did a decade of infrastructure spending help the Japanese' [...]
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    Posted: January 23, 2009, 2:41am EST

  • U of Chicago's Finance Guru on Post-crisis Regulations

    More generally, current events are certain to produce more regulation, and
    much of it is likely to be counterproductive. My longtime colleague, George Stigler, was famous for his argument, buttressed by empirical evidence, that regulators are eventually captured by the regulated. As a result, regulation often has results opposite those [...]
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    Posted: January 10, 2009, 10:20pm EST

  • Best Movie Line of the Day

    It's from a movie about the life of Wing Chun kung fu master Ip Man, who was also one of the Bruce Lee's martial arts teachers.

    Background of the line: Another kung fu master goes to master Ip's house and requests the latter to have a match with him.' [...]
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    Posted: December 27, 2008, 12:45pm EST

  • Movie of the Year

    This year's "Movie of the Year" goes to:

    Ip Man

    Here is the trailer


    ' [...]
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    Posted: December 27, 2008, 12:39pm EST

  • Idiots

    立法會ä¿å®‰äº‹å‹™å§”員會討論策略發展委員會建議簡化專æ‰è¼¸å…¥è¨ˆåŠƒçš„安排，多å議員質疑會加劇競爭，令本地大學畢業生在金èžæµ·å˜¯ä¸‹æµå·¥æ›´é›£ã€‚

    That is from today's Ming Pao, more here.

    The fallacy inherent in the legislators' plea to stop importing talents from outside of HK is that they see the economy as a fixed-size pie. If some people get a large share of the pie, then others [...]
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    Posted: December 03, 2008, 9:05am EST

  • Are We All Keynesians Now?

    Amid the unfolding global financial crisis, countries across the world are fast in deciding pump-priming is the way to go in engineering a recovery of their economies.


    If my memory serves me right, about a decade ago, economists, especially those from the IMF and the US Treasury were [...]
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    Posted: November 24, 2008, 9:42am EST

  • Hong Kong = Rent-seeking Paradise

    "Social welfare expenditure [in Hong Kong] had increased by 80% from $20 billion in 1997-98 to $36 billion in 2007-08, representing the second largest share of government recurrent resource allocation"

    And No, I do not make this up, it is from the Secretary for Labour and Welfare, Mr Matthew [...]
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    Posted: November 24, 2008, 1:13am EST

  • Bush on Capitalism

    President Bush was talking a lot of sense in the following speech:

    -- History has shown that the greater threat to economic prosperity is not too little government involvement in the market, it is too much government involvement in the market.

    -- Like any other system designed by [...]
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    Posted: November 14, 2008, 9:02am EST

  • Learn Property Rights Economics from its Guru

    Here is the opportunity. More importantly, it is FREE, for now anyway. The chapters are from professor Yoram Barzel's property rights economics text. The first edition came out 1989 and the second one came out in 1997, I read both and the text is an excellent introduction to the' [...]
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    Posted: November 06, 2008, 9:06am EST

  • Can Keynes Save Us All?

    A short answer is no, and that's the conclusion of this interesting piece by Nobel Prize winner in economics (2006) Edmund Phelps in FT.

    This bit is my favourite, at the very end of the piece:

    Capitalism theory stresses diversity in sources of new commercial ideas, in' [...]
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    Posted: November 05, 2008, 10:19pm EST

  • Butch Cassidy and the Sundance Kid

    Thanks to W H Yeung at Next Magazine for allowing me to post this latest column of his before it officially appears in tomorrow's addition of the magazine. Enjoy!

    「致命的自負〠觸發金èžæµ·å˜¯

    格林斯ç­é€€ä¼‘近三年，å†å‡ºå¸­åœ‹æœƒè†è¨Šï¼Œç‚ºä»»å…§çš„金èžæ”¿ç­–å•è²¬ã€‚å¸ä»»å¾Œå°šè¦å• 責，情æ³å ªç¨±ç½•è¦‹ï¼Œç„¶è€Œèª°åˆå¯ä»¥å¦èªé€™ä¸æ˜¯å€‹éžå¸¸æ™‚期？無論中外報章，都大字 標題說他為éŽåŽ»ç–忽監管金èžè¡ç”Ÿå·¥å…·èªéŒ¯ã€‚真的嗎？細閱他的演詞åŠä»–å°è­°å“¡è³ª 詢的回應，說他「èªéŒ¯ã€ç„¡ç–‘是太沉é‡äº†ã€‚
    自由經濟有瑕疵

    中外報章說他「èªéŒ¯ã€äº†ï¼Œçœ‹ä¾†æ˜¯æœ¬î„®æ­¤ç•ªå°ç­”而言å§ï¼š 眾議院政制改é©å§”員會主席è¯å£«æ–‡ï¼ˆHenry Waxman）å•ï¼šã€Œä»¥ä»Šè¦–昔，你是å¦å›¿æ–¼ æ„識形態（ideology），åšå‡ºäº†ä¸è©²åšçš„事？〠答：「是的，我發ç¾äº†ä¸€å€‹ç‘•ç–µï¼ˆflaw）。我ä¸çŸ¥é“這個瑕疵有多嚴é‡æˆ–會å¦æŒ 續。但我為此深å—困擾（distressed）。〠è¯å£«æ–‡çœ¾è­°å“¡å£ä¸­çš„「æ„識形態ã€ä¸ç”¨èªªæ˜¯æŒ‡è³‡æœ¬ä¸»ç¾©è‡ªç”±å¸‚場經濟引伸出來的放 任政策了。ä¸ç®¡å¤§å®¶æ€Žéº¼æ¨£æƒ³ï¼Œç„¶è€Œæ©«çœ‹å´æœ›ï¼Œæˆ‘都見ä¸åˆ°æ ¼æž—æ–¯ç­æœ‰å“ªå€‹åœ°æ–¹æ˜¯ 「èªéŒ¯ã€äº†ã€‚資本主義自由市場經濟ä¸æ˜¯å€‹çŽ«ç‘°åœ’，å³ä½¿é€™å€‹ã€Œæ„識形態ã€åƒæœ‰æ ¼ æž—æ–¯ç­èªªçš„有瑕疵，åªæ¶ˆè­‰æ˜Žæ”¾ä»»æ”¿ç­–å‹éŽäººé¡žæ­·å²ä¸Šå˜—試éŽçš„任何體制，那ä¸ä¾¿ 夠了嗎？' [...]
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    Posted: November 04, 2008, 3:49am EST

  • If you are a macroeconomist, do not read further than this

    I have always thought that the issue of the relationship between financial markets and the "real economy" was really deep. I thought that it was a critical part of macroeconomic theory that was poorly developed. But the economics profession for the past thirty years instead focused on producing stochastic calculus [...]
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    Posted: October 23, 2008, 3:01am EDT

  • Who's Who?




    Two pictures with two guys, one of them is a famous actor and other one is the newly minted Nobel Laureate. Guess who's who?







    ' [...]
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    Posted: October 13, 2008, 9:53am EDT

  • Paul Krugman on the Subprime Mess

    Look, I do not like Krugman and I think there are other economists who deserve more to get that your know what I am referring to prize.

    Still, I have got to say that Krugman articulated quite well what triggered the whole subprime mess in this Youtube vid, enjoy!
    [...]
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    Posted: October 13, 2008, 9:10am EDT

  • Economic Downturn + Minimum Wage in HK = What a Deadly Combination

    According to the Sunday edition of Ming Pao:

    多個勞工團體今早éŠè¡Œåˆ°æ”¿åºœç¸½éƒ¨ï¼Œè¦æ±‚政府訂立最低工資åŠæ¨™æº–工時。

    Another story in the same paper, it reported that:

    å‹žå·¥åŠç¦åˆ©å±€é•·å¼µå»ºå®—表示，金èžå±æ©Ÿå°å‹žå·¥å¸‚場影響未完全浮ç¾ï¼Œé¦™æ¸¯ä¸èƒ½å€–å…，é è¨ˆå¹´åº•å¤±æ¥­çŽ‡æœƒä¸Šå‡ï¼Œä½†æœªèƒ½ç¢ºå®šæœƒå¦å·®éŽSARS時的低ä½ã€‚

    Alright, let me get this straight, folks here in HK want minimum wage to be introduced right around the time when the ripple effects of [...]
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    Posted: October 12, 2008, 2:54am EDT

  • Is Recapitalizing the Banks By the Government the Answer to Restore Confidence in Financial Markets?

    The answer is a yes for a growing number of economists according to this WSJ story:

    The government's plan to buy equity in financial institutions, announced Friday by Treasury Secretary Henry Paulson, is an idea that many academic economists have championed from the start of the crisis.

    Here' [...]
     | Rate | Archive
    Posted: October 11, 2008, 10:02am EDT

  • The Scariest Sentence I Have Read Today

    "When the price of credit-default swaps on some company's bonds gets way too high, people look at that and it affects the stock price, it affects their ability to borrow, it starts to affect their credit rating, and their rating affects the credit-default swap price in turn. It becomes a'" [...]
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    Posted: October 03, 2008, 11:59pm EDT

  • Bernanke and the Financial Accelerator Model

    After the recent two weeks of tumult in the American economy, consumers couldn't be blamed for wishing they had a crystal ball that could help them see into the uncertain future. Will there be a recession? How bad would it be? Should Congress and the White House launch a $700' [...]
     | Rate | Archive
    Posted: October 03, 2008, 10:16pm EDT

  • Best Line On the Unfolding US Financial Crisis I Have Read Today

    Virtually all of the franchise value of Goldman and Morgan is human capital. The folks at these firms are the most innovative product developers and skilled risk managers that the world has ever seen.

    ---That is from a new blog with rotating contributors from the Columbia Business School, interesting [...]
     | Rate | Archive
    Posted: September 29, 2008, 3:28am EDT

  • Head You Lose, Tails I Win

    Do we want to live in a system where profits are private, but losses are socialised?

    --- That is a question posed by U of Chicago professor Luigi Zingales on the appropriateness of the Benanke--Paulson rescue package, more here. [...]
     | Rate | Archive
    Posted: September 24, 2008, 2:45am EDT

  • As Reagon Would Have It: Government is the Problem

    Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves.

    Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and [...]
     | Rate | Archive
    Posted: September 24, 2008, 2:16am EDT

  • Amusing Pair of Sentences on the Unfolding Financial Crisis I Have Read Today

    --- From Gary Becker

    Despite my deep concerns about having so much greater government control over financial transactions, I have reluctantly concluded that substantial intervention was justified to avoid a major short-term collapse of the financial system that could push the world economy into a major depression.

    --- [...]
     | Rate | Archive
    Posted: September 22, 2008, 2:41am EDT

  • 路人甲, Morris and Randy

    ä¹ä¸ƒå¹´ç§‹çš„一個晚上，ç¨å€‹å…’從è¯ç››é “飛往三藩市é¢è©¦ï¼Œé£›æ©Ÿä¸Šæš—黃的燈光散è½åœ¨æˆ‘手中æ§ç€çš„å°æ›¸ï¼Œæ·šæ°´æ»´åœ¨æ©™é»„色的書紙上分外動人。 書的åå­—å« Tuesday with Morris.

    ********

    é¢è©¦æˆåŠŸï¼Œä¹å…«å¹´å›žæ¸¯å·¥ä½œã€‚


    ********

    å年後的一個懶洋洋下åˆï¼Œä¸€å£æ°£æŠŠ The Last Lecture 讀完，心情平éœã€‚


    *******

    是éŽåŽ»å年的生活令我變得麻木ã€æ³ æ¼ èµ·ä¾†ï¼Ÿ


    *******

    To me, reading The Last Lecture reminds me of reading one of those pop self-help books written by Anthony Robbins. [...]
     | Rate | Archive
    Posted: September 05, 2008, 2:00am EDT

  • Harold Demsetz's New Book




    The book is due next month. Check out the table of contents here. [...]
     | Rate | Archive
    Posted: August 26, 2008, 3:56am EDT

  • Best Line I Have Read Today

    Spaghetti is undoubtedly a delicay. But better leave it to the restaurant.

    No, it is not about food, it is actually about free trade agreements, read more here. [...]
     | Rate | Archive
    Posted: August 26, 2008, 3:21am EDT

  • My Alma Mater Ranks Above U of Southern California

    No, no I do not make this up, that is according to the latest ranking of the US News and World Report. See it for yourself here. [...]
     | Rate | Archive
    Posted: August 25, 2008, 9:05pm EDT

  • å‡å¦‚我是劉先生

    Disclaimer: All the following did not happen

    At a press conference:


    Reporter: What are your feelings now that 1.3 billion are sad that you could not compete the other day?

    Mr Liu: You see, I do this stuff because I like it, I enjoy it, not [...]
     | Rate | Archive
    Posted: August 19, 2008, 11:16pm EDT

  • å¹²é ç‚®è£½å‡ºæ¢å±•æ–‡æ¡ˆ

    Thanks to Yeung Wai-hong at the Next Magazine for letting me publish his editorial in the next issue of the magazine here first! Enjoy!

    說æ¢å±•æ–‡ä¸€æ¡ˆçš„癥çµæ˜¯ä»–的「酌情權ã€ï¼Œæ®†ç„¡ç•°è­°ã€‚è¦æ˜¯æ²’有「酌情ã€æ²½å”®ï¼ˆæˆ–ä¸ æ²½å”®ï¼‰ç´…ç£åŠå³¶çš„權力，他åˆä½•ä¾†è¼¸é€åˆ©ç›Šçµ¦æ–°ä¸–界發展之嫌？å¯æ˜¯ã€Œé…Œæƒ…權ã€é€™ å•é¡Œæ ¸å¿ƒåˆä¾†è‡ªå“ªè£¡ï¼Ÿé‚£ç„¡ç–‘是伴隨政府干é å¸‚場而來的孿生兄弟了。

    政府ä¸æ’手干é å¸‚場則已，一æ’手則必然賦與主責官僚若干酌情空間，（政策是死 的， 人æ‰æ˜¯æ´»çš„；無權酌情，何以推行政策？）從而è¡ç”Ÿç§ç›¸æŽˆå—的機會。故此 根絕貪污之é“ä¸æ˜¯å¢žåŠ ç›£ç®¡è¦æ¢è€Œæ˜¯æ¸›å°‘å¹²é ï¼Œå¦å‰‡æ“´å¤§å»‰ç½²ç·¨åˆ¶ä¸€ç™¾å€ã€ä¸€è¬å€ ä»å°‡æ­¸æ–¼å¾’然。åƒå¤ªå²å…¬èªªçš„，利字當頭，「刀鋸之誅ã€åˆè±ˆåš‡å¾—倒「舞文弄法〠之輩？

    眾所周知，涉案的紅ç£åŠå³¶æ˜¯å€‹å¹²é æ¨“市的居屋項目 —— 以低於市價給中下家庭 æ供居屋。這更ä¸æ˜¯ä¸€èˆ¬çš„居屋，而是有ç§äººç™¼å±•å•†åƒèˆ‡çš„計劃（新世界是政府的 æ‹æª”）；故此政府有責任在é™æœŸå…§ç‚ºç™¼å±•å•†æ供買家，å¦å‰‡è¦è³ å„Ÿã€‚

    ä¸å·§ï¼Œç´…ç£åŠå³¶å»ºæˆï¼Œç‚ºäº†æ•‘樓市，董建è¯å…ˆæ˜¯åˆ¤äº†å…«è¬äº”çªç„¶æ­»äº¡ï¼Œé€²è€Œåœå”®å±… 屋。跟新世界訂定的åˆåŒåˆå¦‚何是好？按å”議，è¦éº¼çœŸé‡‘白銀賠償其æ失；è¦éº¼ä¾¿ 按個公平價格出售紅ç£åŠå³¶çµ¦æ–°ä¸–界；æ¨æ­¤ä¹‹å¤–，別無他途。當時æ¢å±•æ–‡ç‚ºæˆ¿å±‹åŠ è¦åŠƒåœ°æ”¿å±€çš„常任秘書長，率領地政總署ã€å±‹å®‡ç½²åŠå¾‹æ”¿ç½²çš„專家談判出賣物業； 事出çªç„¶ï¼Œç„¡å…ˆä¾‹å¯æ´ï¼Œä½ èªªä»–的酌情空間åˆæœ‰å¤šå¤§ï¼Ÿ

    事後孔明å¯èƒ½æœƒèªªé€™æ˜¯å€‹ä¸å¹³ç­‰å”議，然而ä¸å¯ä¸çŸ¥è€…，引入ç§äººç™¼å±•å•†å»ºé€ å±… 屋，其主旨乃在加快居屋供應以平抑樓價。居屋價格既然由官家訂定，利潤有é™ï¼› [...]
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    Posted: August 12, 2008, 4:25am EDT

  • Best Conclusion I Have So Far Today

    And doesn't the fact that Hong Kong's made it this far without antitrust give you a moment's pause about the domestic benefits of these laws?

    More here. [...]
     | Rate | Archive
    Posted: August 08, 2008, 12:00am EDT

  • Best Line I Have Read Today

    But the success of other nations should not be taken per se an indication that America is in decline.

    That is Gary Becker talking, more here.

    Needless to say I am in agreement with Becker on this one. That's why I do not subscribe to any of [...]
     | Rate | Archive
    Posted: August 05, 2008, 11:18pm EDT

  • Now this is progress

    According to a story reported in China's Caijing magazine, a tax firm (let's call it firm A) in the coastal Zhejiang province has filed a complaint to the court that a local government has violated the newly implemented antitrust law.

    According to the story, firm A complains that another [...]
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    Posted: August 05, 2008, 10:21pm EDT

  • Books I Plan On Getting

    1. The Price of Everything: A Parable of Possibility and Prosperity The author Russ Roberts was a former student of Milton Friedman and the author of earlier economic novels like the Invisible Heart and the Choice.

    2. Stealing from Each Other: How the Welfare State Robs Americans [...]
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    Posted: August 04, 2008, 4:41am EDT

  • Oh My Go......

    Three in every four Catholics agree on the need for a minimum wage law, according to a survey by the Hong Kong Catholic Commission For Labour Affairs...

    So reported in today's edition of the HK Standard, more here.

    If people are so eager to help out, here [...]
     | Rate | Archive
    Posted: August 04, 2008, 4:30am EDT

  • Randy Pausch 1960 --2008



    Professor Randy Pasuch passed away...here is more from ABC, and here from his colleague at UVA.

    My condolences to his family.



    [...]
     | Rate | Archive
    Posted: July 28, 2008, 10:20am EDT

  • Marty

    David Warsh has written an extremely lucid review of Marty Feldstein as head of the NBER. More here. [...]
     | Rate | Archive
    Posted: July 28, 2008, 1:45am EDT

  • Web 2.0 Is this It?

    I have heard a lot about Web 2.0 of late and its business potential. I have no clue what it is though. But if the Web 2.0 business model can bring more stuff like this vid, hey, I am totally for it.

    This short video is pretty amusing. I, [...]
     | Rate | Archive
    Posted: July 24, 2008, 9:50am EDT

  • 林行止ã€é¦™æ¸¯ã€æœƒè¨ˆå¸«

    「香港怪ç¾è±¡ä¹‹æœ€æ˜¯æœƒè¨ˆå¸«ç¶“常評論政經事務，此為世界所無的香港畸態。ã€

    The above line appears in Mr Lam's column today. Right on. More here. [...]
     | Rate | Archive
    Posted: July 24, 2008, 4:42am EDT

  • Me

    Recently I was invited by L, my former colleague who is now working for Hong Kong Economic Journal, to contribute a piece to his paper commemorating the paper's 35 anniversary.

    A few people have missed it when it was published last week and asked me to reprint here. [...]
     | Rate | Archive
    Posted: July 22, 2008, 11:37pm EDT

  • Bogus Economics

    A guy wrote in today's (23 July) Hong Kong Economic Journal making a case for the minimum wage:

    第二ã€å®¢è§€ä¾†èªªï¼Œä½ŽæŠ€è¡“勞務市場並ä¸å­˜åœ¨åˆ»æ„的價格æ“控情æ³ã€‚但在ç¾ä»Šäº’è¯ç¶²çš„年代，僱主所æ“有的似乎是完全的市場資訊，當æŸå€‹åƒ±ä¸»äº†è§£åˆ°å…¶ä»–僱主願æ„付出的工資價格後，他是沒有誘因去把工資無故æ高的。

    If a worker can produce 10 dollars worth of stuff, and the worker is currently paid nine dollars. (Let's put aside the question of why the worker gets [...]
     | Rate | Archive
    Posted: July 22, 2008, 11:24pm EDT

  • Coase on China

    Below is the introduction Ronald Coase delivered at the beginning of the China conference which we have talked about here before. Thanks to Linda, Professor Steven Cheung's wife, for kindly providing me with a copy of the introduction and granting me permission to reproduce it here:

    China’s Economic Transformation
    [...]
     | Rate | Archive
    Posted: July 22, 2008, 2:28am EDT

  • 話家常

    相識二載的 D 那天å°æˆ‘說，å°æ™‚窮，買ä¸èµ·æ±½æ°´ï¼›åˆ°ä»Šå¤©å››å多歲負擔得起， å»å‡ºæ–¼å¥åº·ç†ç”±å¾ˆå°‘å– ã€‚

    ******************************

    I know D back in my college days. Those were good times to say the least. We both were and still are deeply influenced by Professor Steven N S Cheung's works.

    Funny thing is, we were not aware of each other's [...]
     | Rate | Archive
    Posted: July 11, 2008, 9:31am EDT

  • So you want to know more about the Subprime mess?

    This first legi volume on the Subprime mess has essays written by a very strong lineup of economists including Charles W. Calomiris, Mike Bordo, Guido Tabellini, Carmen Reinhart...

    Even better is the fact that it's FREE, download it here. [...]
     | Rate | Archive
    Posted: July 09, 2008, 3:26am EDT

  • Best Indicator of China's Economic Growth. No, it's Not GDP

    No, no, no, definitely not GDP figures as a lot of pundits like to charge them as not reliable and cooked.

    What is a better, more reliable indicator then? One that the government would find it hard to tinker with.

    I think I have found one, [...]
     | Rate | Archive
    Posted: July 08, 2008, 4:23am EDT

  • The Man Who Started It All




    [...]
     | Rate | Archive
    Posted: July 07, 2008, 9:38am EDT

  • Coase, Chicago and China Conference

    The conference organized by R. Coase on China is forthcoming in mid-July.

    Stars who will attend include Coase, Bob Mundell, Doug North, Bob Fogel, Janet Landa and Gordon Tullock. You can access the conference's program here. Enjoy!

    And yes, Professor Steven N S Cheung's paper would be [...]
     | Rate | Archive
    Posted: June 30, 2008, 12:49pm EDT

  • 比爾蓋茲 (Bill Gates) 與‘創新’資本主義

    æ—©å‰æ¯”爾蓋茲的‘創新’資本主義 (Creative Capitalism) 演說引起媒體的廣泛報導。

    多ä½è‘—å經濟學者近日在一åšå®¢è¨Žè«–這‘創新’資本主義的å¯è¡Œæ€§, 包括有 Gary Becker, Bill Easterly, Dick Posner, Greg Clark...等，大都å°é€™å¶„æ–°ç†å¿µæœ‰æ‰€ä¿ç•™ã€‚

    Read more here. All posts deserve a close read, and yes, even if you do not fully agree with their authors' views. [...]
     | Rate | Archive
    Posted: June 30, 2008, 4:13am EDT

  • Anti-Commons

    A good friend of mine Ming is curious about the term anti-commons. The term actually was coined back in 1998 by Columbia Law School professor Michael Heller in a Harvard Law Review piece, some simple description of the concept could be found here.

    Two years later, Jim [...]
     | Rate | Archive
    Posted: June 25, 2008, 9:49pm EDT

  • Interesting Links

    1. A new book by free trade guru Jagdish Bhagwati.

    2. A new book on anti-commons.

    3. Jim Buchanan on Rawls.

    4. An interesting piece on Mises and Schumpeter.

    5. A new economics novel by Cafe Hayek's Russ Roberts. [...]
     | Rate | Archive
    Posted: June 25, 2008, 12:44am EDT

  • Government Policy Should Not Bias Towards Homeownership

    No, the line above does not come from some free market economists, it is a line I've got from Paul Krugman's latest column in NYT.

    I can't remember when is the last time I acutally agree with stuff written by Krugman, this is certainly one of those rare [...]
     | Rate | Archive
    Posted: June 23, 2008, 9:58am EDT

  • "Anybody who can claim that Milton was not one of the major thinkers of his time is crazy"

    That is Columbia University Free Trade Guru talking.

    Here is the source. And Professor Jagdish Bhagwati is criticizing those U of Chicago professors (you hear me right, U of Chicago professors) who oppose the establishment of an Institute in Milton Friedman's honor.

    HT to Truth [...]
     | Rate | Archive
    Posted: June 23, 2008, 9:16am EDT
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