From all of us at TPS: Happy Holidays!
Saturday, December 24, 2011
Thursday, December 15, 2011
Top 10 Economics Papers of 2011
Here is one person's take on the best economics papers of 2011, you'll find a familiar name in the #2 spot...
Wednesday, December 14, 2011
Paper Money
Matt recently brought up the deviation between exchange value and cost of production for fiat monies. Although he was specifically considering pennies, the same discussion applies to paper monies. As I wrote in the comments of the original post:
Here's the BBC profiling paper money from the Ming Dynasty. The first line of the BBC article reads:
If the penny is over valued (exchange value > cost), forgery is encouraged. If the penny is under valued (exchange value < cost), it pays to repurpose existing pennies. [...] In the same way that maintaining overvalued fiat monies requires monopoly privilege, maintaining undervalued fiat monies require the prohibition of repurposing.
Here's the BBC profiling paper money from the Ming Dynasty. The first line of the BBC article reads:
This Chinese Ming dynasty banknote is inscribed with the title Great Ming circulating treasure note and a warning that counterfeiting is punishable by death.That is one way to discourage entry and thereby maintain the exchange value.
Tuesday, December 13, 2011
These Kids and their Darn Rap Music...
Fayetteville State University's Supply and Demand video contest has several contenders. Here's one from my colleagues in the GMU Econ Society:
And here's another from the Hayek-loving Dorian Electra:
Best of luck to all participants!
And here's another from the Hayek-loving Dorian Electra:
Best of luck to all participants!
A Question for Will Luther
Perhaps I'm overlooking something here, but I think Will can help me out.
I hear people mention that the price of producing a penny is greater than one cent. Moreover, the value of the materials used to make one penny are also greater than one cent. While I think there is something to the discrepancy between the two, I'm going to go with the latter-- the copper and zinc in a penny are worth more than one cent. And people use this as reason to get rid of the penny-- but I'm not quite certain where this eventually leads.
Free of government restriction, people would acquire these pennies, melt them down and use them for their material purpose. The money supply contracts, the copper and zinc supplies increase, and we end up at a new equilibrium. Fair enough.
But people aren't allowed to do that. It's illegal. I'm not saying that I agree with the law, but assume that people follow it and it remains in place for the indefinite future. Money system-wise, what's wrong with having a penny that's would be worth more than one cent in raw materials? What if pennies were made of gold-- what then? I suppose people could trade them as commodities expecting at some point to be able to use them as something other than pennies, but then we're back to the law and it either de jure or de facto not holding. The more valuable the penny, the stronger the incentive to get around the law-- but again, I'm curious what makes it not function as a unit of currency.
Does this penny-made-of-stuff-worth-more-than-one-cent argument necessarily need to go hand-in-hand with the ban on destroying money? If so, that's fine-- I just don't see people arguing it beyond "THE COPPER IN PENNIES IS WORTH TWO CENTS!" What am I missing here? I defer to Will's superior knowledge here and am eager to see where I've messed up.
I hear people mention that the price of producing a penny is greater than one cent. Moreover, the value of the materials used to make one penny are also greater than one cent. While I think there is something to the discrepancy between the two, I'm going to go with the latter-- the copper and zinc in a penny are worth more than one cent. And people use this as reason to get rid of the penny-- but I'm not quite certain where this eventually leads.
Free of government restriction, people would acquire these pennies, melt them down and use them for their material purpose. The money supply contracts, the copper and zinc supplies increase, and we end up at a new equilibrium. Fair enough.
But people aren't allowed to do that. It's illegal. I'm not saying that I agree with the law, but assume that people follow it and it remains in place for the indefinite future. Money system-wise, what's wrong with having a penny that's would be worth more than one cent in raw materials? What if pennies were made of gold-- what then? I suppose people could trade them as commodities expecting at some point to be able to use them as something other than pennies, but then we're back to the law and it either de jure or de facto not holding. The more valuable the penny, the stronger the incentive to get around the law-- but again, I'm curious what makes it not function as a unit of currency.
Does this penny-made-of-stuff-worth-more-than-one-cent argument necessarily need to go hand-in-hand with the ban on destroying money? If so, that's fine-- I just don't see people arguing it beyond "THE COPPER IN PENNIES IS WORTH TWO CENTS!" What am I missing here? I defer to Will's superior knowledge here and am eager to see where I've messed up.
Charts!
CNN links to a collection of charts from the BBC; it's a quick look so take a gander. I think the unit labor cost presentation is most striking, though perhaps the marginal impact of the next "we're in big financial trouble" graph has been beaten down to near zero levels?
2011 Gus Rankings: Final Regular Season Poll
Here are the final Gus Rankings for the 2011 college football season.
If Gus had his way, the BCS bowls would look as follows:
National Championship Game: LSU vs. Oklahoma State
Rose Bowl: Oregon vs. Wisconsin
Fiesta Bowl: Stanford vs. Houston
Sugar Bowl: Boise State vs. Alabama
Orange Bowl: Virginia Tech vs. West Virginia
The final conference rankings are as follows (average team score):
Big 12: 18.2
SEC: 18.0
Big 10: 9.2
Pac-12: 5.2
ACC: 2.8
Big East: 2.6
Mountain West: -1.9
Conference USA: -10.3
Mid-American: -13.2
Sun Belt: -13.9
WAC: -20.0
Further, which team was the highest ranked team not to be invited to a bowl game (USC is ineligible for postseason play)? Western Kentucky, at #35.
Which was the lowest ranked team to receive an invite to a bowl game? Northwestern, at #75.
If Gus had his way, the BCS bowls would look as follows:
National Championship Game: LSU vs. Oklahoma State
Rose Bowl: Oregon vs. Wisconsin
Fiesta Bowl: Stanford vs. Houston
Sugar Bowl: Boise State vs. Alabama
Orange Bowl: Virginia Tech vs. West Virginia
The final conference rankings are as follows (average team score):
Big 12: 18.2
SEC: 18.0
Big 10: 9.2
Pac-12: 5.2
ACC: 2.8
Big East: 2.6
Mountain West: -1.9
Conference USA: -10.3
Mid-American: -13.2
Sun Belt: -13.9
WAC: -20.0
Further, which team was the highest ranked team not to be invited to a bowl game (USC is ineligible for postseason play)? Western Kentucky, at #35.
Which was the lowest ranked team to receive an invite to a bowl game? Northwestern, at #75.
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