The Difference Between Healthy Competition and Monopoly

I’m currently doing some work on evolutionary economics without really having gotten far beyond the basics. I am certain this stuff is great and important, but all the books always kind of loose me at the point where too many “statistical moments” come in, I am asked to solve non-linear differential equations and I find myself spending most of my time reviewing how the rules of integration work. I’m terrible at math, is what I’m saying. But the book by Stanley Metcalfe on my desk at the moment still seems a really terrific introduction into the topic. What really fascinated me, however, is something only marginally related to the models themselves. Something so blatantly obvious when you think about it yet so cleverly hidden that I had never noticed it with this clarity. One of economists’ favorite words is actually nothing but a farce in most standard economic models: we speak of competition where there really is none!

Continue reading

Crossing into the Gaza Strip

First of all, ignore the terrible thumbnail Youtube chose for the video below the fold, and allow for a short break from Economics. I had initially planned on staying away from discussing the whole Israel-Palestina mess on this blog. Don’t worry, that’s not going to change anytime soon. I know only a handful of people with whom I can talk about the issue in a meaningful, non-inflammatory way, and everytime I do all I learn is that I need to learn more. During my time doing an internship in Cairo this summer, however, I met a lot of seasoned travellers of the Middle East. In one of our many late-night sessions over chai and sheesha we came to the (in retrospect rather naive) conclusion that it would be fascinating to actually try and cross into the Gaza Strip through the recently reopened Rafah border crossing. Needless to say, we never did nor seriously tried. Appearently the only foreigners allowed to cross are either aid workers or journalists. So the mistery of what the Gaza Strip actually looks like remained – until I recently stumbled upon a link on Soup (a tumblr by Reuters Social Media Editor that occasionally offers some fascinating tidbits of news and wisdom) to the following short documentary. I found it a very worthwile watch for totally non-political reasons.

Continue reading

Links of the Week

Since all of us have better things to do, we asked our robot intern Watson to find this week’s most interesting news stories and compile them into a short list for your convenience. Here’s what he came up with.

Hayek, Friedman and the Illusion of Conservative Economics, from Robert M. Solow at The New Republic

While it’s actually a book review of “The Great Persuasion: Reinventing Free Markets since the Depression” by Angus Burgin, which you might or might not care about, it offers a great amount of insight and personal anecdotes by one of the great economists of the 20th century, Robert “neoclassical growth model” Solow. When Nobel Laureates speak (or write, in this case), it’s never a bad idea to listen.

Dividing the Chores: Who Should Cook and Who Should Clean?, from Emily Oster at Slate

Amusing yet thoroughly serious thoughts on how household chores should be assigned in order to achieve what we all love: economic efficiency. Hint: think comparative advantage.

Continue reading