Archive for February 2008

Pretty neat,

February 29, 2008

although expensive: customized energy bars.

You Bar – Fresh, Handmade Nutrition Bars – Home

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Grade 1 spelling games

February 29, 2008

Spell ‘I cup.’ Read the letters out.

From the bus stop wait today.

Clever paper title

February 27, 2008

The Economics of Workaholism: We Should Not Have Worked on This Paper

Daniel S. Hamermesh, University of Texas at Austin
Joel B. Slemrod, University of Michigan

Abstract

A large literature examines the addictive properties of such behaviors as smoking, drinking alcohol, gambling and eating. We argue that for some people addictive behavior may apply to a much more central aspect of economic life: working. Although workaholism raises some of the same health-related concerns as other addictions, compared to most of the more familiar addictions it is more likely to be a problem of higher-income individuals and is more likely to generate negative spillovers onto individuals around the workaholic. Using the Retirement History Survey and the Panel Study of Income Dynamics, we show that high-income, highly educated people exhibit behavior that is consistent with workaholism with regard to retiring–they are more likely to postpone earlier plans for retirement. The theory and evidence suggest that the presence of workaholism calls for a more progressive income tax system than otherwise, although other more targeted policies may be part of optimal policy.

The B.E. Journal of Economic Analysis & Policy

God help us,

February 21, 2008

since we have a girl who is obsessed with Hannah Montana and are planning on a Disney trip. But no to this. No to this. No to this. No to this. Keep repeating.

Disney Needs To Stop | Dlisted

via:
Mortimer’s Mom: Another Disney pleasure my daughters will never know

I don’t mind the CD-generic bubble gum pop with girl positive lyrics. Never seen the TV show.

We went to the concert, because I won tickets at work.

The mess

February 20, 2008

Richard’s Real Estate and Urban Economics Blog: Why an Interest Rate Freeze won’t solve the Subprime Problem

I am still confused about exactly what news caused the meltdown.  There are lots of good reasons to be worried about the feedback from house prices to the overall level of economic activity, and then back to house prices, etc, leading to predator-prey dynamics: Lotka-Volterra equation – Wikipedia, the free encyclopedia

The idea is in an important paper by Kiyotaki and Moore (not with personal real estate, but could be extended to that setting too I think).

Credit Cycles: Kiyotaki and Moore

The authors construct a model of a dynamic economy in which lenders cannot force borrowers to repay their debts unless the debts are secured. In such an economy, durable assets play a dual role: not only are they factors of production but they also serve as collateral for loans. The dynamic interaction between credit limits and asset prices turns out to be a powerful transmission mechanism by which the effects of shocks persist, amplify, and spill over to other sectors. The authors show that small, temporary shocks to technology or income distribution can generate large, persistent fluctuations in output and asset prices.

Transmission mechanism roughly means how shocks in one part of the economy are transferred to other sectors and propagate through time.

I wonder if the appropriate policy response is to somehow loosen up collateral constraints, rather than play around with people’s mortgages.

Addendum: here is why I don’t think resets matter as much as everyone thinks, but the house price itself does matter a lot
NPR: Why Not Just Walk Away from a Home?.

Key quote:

Sometimes, they say, walking away from your mortgage makes economic sense, especially for homeowners who find themselves “upside down” — that is, they owe more on their mortgage than their house is worth

Owing is the stream of payments, not simply the current payment.

Alive

February 18, 2008

and more than barely!

The last few months have been like a long and unsettling dream.  But we are waking up in a warm bed, and the sky is clearing.