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Economic Growth in Historical Comparative Perspective: Assignment 8: Economic Growth in Historical Perspective

Econ 135: Assignment 8: Character of Modern Economic Growth Paper https://www.bradford-delong.com/2020/03/economic-growth-in-historical-comparative-perspective-assignment-8-economic-growth-in-historical-perspective.html: Explain, in about 500 words, how the character of modern economic growth as it has been seen in the world since 1870 differs from economic growth—or not-growth—in previous eras since the invention of agriculture. Upload your short essay to this webpage. Submitting: a text entry box. Due Apr 8 at 11:59pm...

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Assignment: Tell Us What Is Happening to You, and What You Wish For

This epidemic is nasty: one case at a Biogen executives meeting on Feb 26-27 spread the virus to 100 of the 200 meeting participants. It kills 15% of people in their 80s who get it, 8% of people in their 70s, 3% of people in their 60s, 1% of people in their 50s, and is like a bad flue to people younger.

One frequently discussed scenario for coronavirus in the United States is that it now infects one in every two thousand people, that its infection rate doubles every week, that attempts at social distancing will fail to impact the spread of the virus, that the virus will not become less virulent as the northern hemisphere warms up, and the virus will infect half the population before herd and natural immunity bring a halt to it spread here in America.

Under this scenario—which is optimistic, in some senses of the word—this virus kills one million people in the United States. Under this scenario, the number of those infected will double for seven more weeks, at which point one in fifteen will be newly infected, and then the spread will slow—but your chances of catching the virus will still be high—for another twelve weeks before the epidemic is over here. That carries us for five months—until the end of July. And in many other scenarios we are dealing with this for longer, even if we manage to flatten the curve or if this virus is seasonal, and so vanishes this summer to come back next winter.

We are moving the university online: to lecture slides with audio, to zoom sessions, to asynchronous email for office hours, and to take home assignments. But there are lots of other things we could provide you and lots of other interactions we could set up, if it would assist you this spring.

Assignment: _Please write at least 250 words—at least one page—telling us what you want us to know about how your life is going right now, and informing us of your views of how we should organize and run this class going forward. Submit it at:


Complete it, please, by 5 pm Fri Mar 20, but late submissions will not be penalized...

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Study Questions: Pre-Commercial Revolution Economies

Study Questions for the History of Economic Growth: For Midterm 1: Econ 135

  1. Explain in words what the steady-state balanced-growth path Solow-Malthus equilibrium equation for real living standards https://delong.typepad.com/.a/6a00e551f0800388340240a50c1a9a200b-pi tells us about what the level of income will be in a Malthusian society.
  2. Explain in words what the steady-state balanced-growth path Solow-Malthus equilibrium equation for the level of population https://delong.typepad.com/.a/6a00e551f0800388340240a50c1aa8200b-pi tells us about what the level of population will be in a Malthusian society.
  3. What do you think are the three most reasons not to take the Solow-Malthus model as gospel in understanding pre-Industrial Revolution economic growth—and its absence?
  4. What are three data sources that economic historians rely on to try to get a handle on the pace of economic growth in pre-modern times?
  5. Why did average incomes and prosperity levels remain so low back before the year 1500?
  6. What were the most important changes that made the Industrial Revolution possible?
  7. Where and when did the Industrial Revolution take place?
  8. What theory about why the Industrial Revolution happened when and where it did do you find most attractive?
  9. What are the limitations of and problems with the theory that you find most attractive about why the Industrial Revolution happened when and where it did?
  10. Were income and standards of living under the Roman Empire subject to Malthusian constraints?
  11. How, so far in this course, has the concept of economic class been important in shedding light on understanding processes of economic growth?
  12. Based on what we have covered in this course so far, what do you expect to see in economic growth in the world economy over the next 50, 100, and 1000 years?
  13. In the Solow growth model, what are the important determinants of prosperity in the sense of income per worker, and how do those determinants interact?
  14. Why is Michael Kremer's (and Paul Romer's, and Jared Diamond's) theory of growth—that much of economic growth can be explained by the facts that ideas are non-rival and that two heads are better than one—attractive?
  15. Why is Michael Kremer's (and Paul Romer's, and Jared Diamond's) theory of growth—that much of economic growth can be explained by the facts that ideas are non-rival and that two heads are better than one—inadequate?
  16. Why is it probably wrong to suppose that humanity's effective effort at innovation and technology development at any point in time is proportional to the human population then?
  17. What kinds of innovative effort are positive-sum? What kinds of innovative effort are negative-sum?
  18. Why do extensive empires often appear to have higher standards of living than other, more divided societies that possess the same level of useful ideas about technology and organization?
  19. Why do extensive empires often appear to have greater population densities than other, more divided societies that possess the same level of useful ideas about technology and organization and the same quality of natural resources?
  20. What was the "Columbian Exchange" and why was it important for economic growth?
  21. What was the impact of the Spanish Conquest on the population levels and the living standards of the Amerindian population living in the Americas when the conquistadores arrived?
  22. Explain why you are annoyed by Jared Diamond's claim that the invention of agriculture was a big mistake.
  23. On what evidence does Greg Clark base his conclusion that English working-class standards of living were roughly $2.50 a day in the eight centuries before 1800?
  24. Was the standard of living of the English working class highest in 1310, 1450, or 1800; and why was it highest when it was highest?
  25. Why does Lant Pritchett believe the world today is much more unequal than it was back in 1800? Do you buy his argument?
  26. Why, in Partha Dasgupta's view, is money an extremely useful societal invention?
  27. Why, in Partha Dasgupta's view, does "Becky" have so much more social power and opportunities than does "Desta"?
  28. At what rate does income per worker grow in the Solow growth model when an economy is on its equilibrium balanced-growth path? Why does it grow at that rate?
  29. At what rate does society's total income grow in the Solow growth model when an economy is on its equilibrium balanced-growth path? Why does it grow at that rate?
  30. What changes would tend to make an economy following the Solow growth model and on its equilibrium balanced-growth path richer?
  31. What changes would tend to make an economy following the Solow growth model and on its equilibrium balanced-growth path poorer?
  32. What is meant by saying that an economy is a "Malthusian economy"?
  33. What is meant by the "demographic transition"?
  34. Why doesn't technological progress raise standards of living in a Malthusian economy on its steady-state balanced-growth path?
  35. What do economic theorists think is the reason that the much larger global STEM workforce today than in 1870-1900 has not led to a faster proportional rate of technological progress now than back then?
  36. What does Aristotle claim are the four branches of household resource management, and which of the four does he think is most important?
  37. How much does Aristotle think a philosopher—or any aristocratic Greek male—should know about economic matters: market prices of commodities and production technologies?
  38. Why does Aristotle believe that markets and merchants are useful for a city-state, and for a Greek aristocratic male?
  39. Why does Aristotle believe that markets and merchants and too much knowledge about them are dangerous and destructive for a city-state, and for a Greek aristocratic male?
  40. Why does Gilgamesh deserve to be King of Uruk? And what should his people do when they recognize that he has turned into an overbearing tyrant?
  41. Why does Willem Jongman believe that the classical Mediterranean became so rich and prosperous, so much so that, in the words of the historian Edward Gibbon: "If a man were called to fix the period in the history of the world, during which the condition of the human race was most happy and prosperous, he would, without hesitation, name that which elapsed from the death of [the Emperor] Domitian [in 96] to the accession of [the Emperor] Commodus [in 180]..."?
  42. Why, in Willem Jongman's view, was the prosperity of the Antonine-Age Roman Empire between the assassination of the Emperor Domitian in 96 and the accession of the Emperor Commodus in 180 not followed by a further expansion of or even the maintenance of equal prosperity?
  43. What happened to the living standards of peasants and craftsmen in western Europe in the two centuries after the 1346-1348 Bubonic Plague, and why do economic historians (led by Robert Brenner) think what happened happened?
  44. What happened to the living standards of peasants and craftsmen in eastern Europe in the two centuries after the 1346-1348 Bubonic Plague, and why do economic historians (led by Robert Brenner) think what happened happened?
  45. Consider the course of history in western Europe after the Bubonic Plague of 1346-8, the course of history in eastern Europe after the Bubonic Plague of 1346-8, and the course of history in the Roman Empire after the Antonine Plague of 165-180. Which two do Willem Jongman and Melissa Dell think are more closely analogous? Why and how?
  46. Why, in Peter Temin's view, was the prosperity of the Antonine-Age Roman Empire between the assassination of the Emperor Domitian in 96 and the accession of the Emperor Commodus in 180 not followed by a further expansion of prosperity and a 1500 years-earlier Industrial Revolution?
  47. Why, in Peter Temin's view, was the prosperity of the Antonine-Age Roman Empire between the assassination of the Emperor Domitian in 96 and the accession of the Emperor Commodus in 180 not followed by a further expansion of prosperity that carried the proportional growth rate of the value of the stock of useful human ideas about technology and organization up from the 0.06%/year of the year -1000 to year 1 Axial Age to something like the 0.15%/year of the year 1500 to year 1700 Commercial Revolution Era?
  48. Why, in Moses Finley's view, was the prosperity of the Antonine-Age Roman Empire between the assassination of the Emperor Domitian in 96 and the accession of the Emperor Commodus in 180 not followed by a further expansion of or even the maintenance of equal prosperity?
  49. What factors made it so that the year 1 was much more likely to have seen the Mediterranean dominated by a Rome-based formal empire of conquest and legions first and trade and cultural influence second than an Athens-based informal empire of trade and cultural influence first and conquest and fleets second?
  50. What, in Josh Ober's view, was the likelihood that classical Mediterranean civilization might have attained something like the pace of commercial activity and productivity growth of the 1500-1700 Commercial Revolution Era?
  51. What is Brad DeLong's guess of the average proportional rate of growth of the real value of the stock of useful human ideas about technology and organization in the long Agrarian Age between the invention of agriculture in the year -8000 and the year 1500? Why was this rate of growth so low?
  52. What is Brad DeLong's guess of the average proportional rate of growth of the real value of the stock of useful human ideas about technology and organization in the Commercial Revolution Era of 1500-1770? Why was this rate of growth so much higher than in the previous Agrarian Age? Why was this rate of growth so much lower than in the subsequent Industrial Revolution Era?
  53. What is Brad DeLong's guess of the average proportional rate of growth of the real value of the stock of useful human ideas about technology and organization in the Industrial Revolution Era of 1770-1870? Why was this rate of growth so much higher than in the previous Commercial Revolution Era? Why was this rate of growth so much lower than in the subsequent Modern Economic Growth Era?
  54. What is Brad DeLong's guess of the average proportional rate of growth of the real value of the stock of useful human ideas about technology and organization in the Modern Economic Growth Era of 1870-today? Why was this rate of growth so much higher than in the previous Industrial Revolution Era?
  55. What is Brad DeLong's guess of what the average proportional rate of growth of the real value of the stock of useful human ideas about technology and organization will be in the next five centuries? Why doesn't he think it will be higher? Why doesn't he think it will be lower?
  56. What is Brad DeLong's guess of what the average proportional rate of growth of human living standards was between the year -6000 and 1500. What factors made it so low?
  57. What is Brad DeLong's guess of what the average proportional rate of growth of human living standards was between the year -6000 and 1500. What factors made it so much lower than the rate of growth of the useful ideas stock?
  58. Suppose that the rate of growth of the real value of the stock of useful human ideas about technology and organization in the world had stuck at its Commercial Revolution Era 1500-1770 pace. What would you guess the world economy would look like today in terms of total human population and average living standards and productivity levels?
  59. Suppose that the rate of growth of the real value of the stock of useful human ideas about technology and organization in the world had stuck at its Industrial Revolution Era 1770-1870 pace. What would you guess the world economy would look like today in terms of total human population and average living standards and productivity levels?
  60. Suppose population growth in the "advanced west"—the European North Atlantic coast countries that were the most technologically advanced and became militarily powerful in the Commercial Revolution Era 1500 to 1770—had been at its historic level of 0.4%/year over 1500 to 1770, that invention and innovation had proceeded as in actual world history, but that the rest of the world had managed to fight off European colonialism and retain control of the Americas and of Indian Ocean trade in non-European hands. Would living standards in the European North Atlantic coast countries have then been likely to increase between 1500 and 1770? (In our history they increased by some 40% over that period.)

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Malthusian Agricultural Economies

Th Feb 6: 2.1. Malthusian Agricultural Economies

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Simulating the Solow Growth Model

How does an economy well-approximated by the Solow growth model—one that has a constant labor-force growth rate n and labor-efficiency growth rate g; a constant savings-investment share of production s and capital deprecation rate δ; and a constant elasticity θ of production Y with respect to the economy's capital intensity κ, where capital intensity is defined as κ = K/Y, the quotient of the economy's capital stock K and its production level Y—behave? What does it do? How are you—if you are a student—to understand it? And to use it?

Standard explanations often focus on graphs like:

Solow_growth_model_graphs

which are often unhelpful.

With this class I would like—if I can get it working—to take another tack. If you have a Berkeley CalNet account, click on this link: https://datahub.berkeley.edu/hub/user-redirect/git-pull?repo=https%3A%2F%2Fgithub.com%2Fbraddelong%2Flecture-support-2020&urlpath=tree%2Flecture-support-2020%2F. If you have access to another Jupyter notebook server, go to https://github.com/braddelong/lecture-support-2020. In either case, then open the file: lecture-support-solow-2020-01-23.ipynb. You should then have, open, my Solow Growth Model Simulator. Click in the second code cell—the one whose first line is—"# SET PARAMETERS, INITIAL CONDITIONS, AND SCENARIO LENGTH IN THIS CELL". You can now edit the text in this code cell. Do so in order to either accept defaults or change the variable assignment statements (those with no "#" in the first column and an "=" sign in them to set values for the model parameter in the lines:

  • n = 0.01 # the labor-force L proportional growth rate
  • g = 0.02 # the labor-efficiency E proportional growth rate
  • s = 0.12 # the share of production Y that is saved and invested
  • δ = 0.03 # the capital depreciation rate
  • θ = 1.09 # the elasticity of production Y with respect to capital intensity κ

Then click lower down and edit in order to accept default or choose alternative starting values L_0, E_0, and κ_0 for the initial values as of time 0 for the labor force, labor efficiency, and capital intensity in the lines:

  • L_0 = 1
  • E_0 = 1
  • κ_0 = 8

Then click lower down again and either accept the default or choose the length of time for which the simulation will run in the lines:

  • T = 100

Then go up to the top of your environment. In the "Kernel" drop down menu click on "Restart Kernel and Run All Cells"

Then scroll down the webpage. If all has gone well you should see, interspersed among the code, ten graphs showing how each of and some combinations of the model variables behave over time.

Note what looks interesting. Then go back to the top, and change something in the second code cell. Once again, go up to the top of your environment, and in the "Kernel" drop down menu click on "Restart Kernel and Run All Cells". What has changed? What strikes you as interesting? Take notes.

Repeat until you think you have an understanding of how an economy that happened to be well-modeled by the Solow growth model would behave.

The assignment? Write 200-300 words on the simulations you carried out, why you chose the parameter values and starting conditions you did, what (if anything) you learned from this exercise, and how useful you think models and exercises like this are in understanding economic growth out there in the real world.


https://nbviewer.jupyter.org/github/braddelong/lecture-support-2020/blob/master/lecture-support-solow-2020-01-23.ipynb

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Model Economic History Papers

Note: Gross and Moser have been heavily, heavily revised since submission: you are not expected to write something that gets into the AER as-is.

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Weekly Economic History Memo Questions Bank

Memo 1: Malthusian Economies

Was the invention of agriculture the worst mistake in the history of the human race?

Readings:


 

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1.1. Theory: Robert Solow's Growth Model: The History of Economic Growth: Econ 135

Th Jan 23: Robert Solow's Growth Model


Notes & Further Readings:

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Lecture Notes: The Solow Growth Model: The History of Economic Growth: Econ 135

Jupyter (formerly iPython) notebook:

https://nbviewer.jupyter.org/github/braddelong/long-form-drafts/blob/master/solow-model.ipynb
https://nbviewer.jupyter.org/github/braddelong/long-form-drafts/blob/master/solow-model-2-basics.ipynb
https://nbviewer.jupyter.org/github/braddelong/long-form-drafts/blob/master/solow-model-3-growing.ipynb
https://nbviewer.jupyter.org/github/braddelong/long-form-drafts/blob/master/solow-model-4-using.ipynb
https://nbviewer.jupyter.org/github/braddelong/long-form-drafts/blob/master/solow-model-5-pre-industrial.ipynb

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0. Introduction: The History of Economic Growth: Econ 135

Rosling-dollar-street

T Jan 21: Growth in Historical Perspective, Humans and Their Economies


Notes & Further Readings:

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-1. Before Class Begins: The History of Economic Growth: Econ 135

Jetsons

  1. Acquire: An iClicker, and access to the course readings

  2. Read: Course administration documents https://delong.typepad.com/files/135-course-summary.pdf https://delong.typepad.com/files/135-course-procedures.pdf https://delong.typepad.com/files/135-administrative.pdf

  3. Read: Partha Dasgupta (2007): Economics: A Very Short Introduction, Prologue & chapters 1-4 https://delong.typepad.com/files/dasgupta-economics.pdf

  4. Read: Aristotle: Politics, Book I https://delong.typepad.com/files/aristotle-politics-book-i.pdf

  5. Do Assignment 1 (3 pts) https://tinyurl.com/dl-2020-01-18a: Write & answer a syllabus FAQ question, due T Jan 21 9:00 am.


Notes & Further Readings:

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The History of Economic Growth: Econ 135: Assignments

Suggested Question (and Answer) for Course FAQ List: Assignment 1: Read the syllabus documents: https://delong.typepad.com/files/135-course-summary.pdf https://delong.typepad.com/files/135-course-procedures.pdf https://delong.typepad.com/files/135-administrative.pdf

Using the information in the syllabus, think up a question that should be on the FAQ—the Frequently Asked Question—list for the course.

Answer the question you thought up.

Upload your question and answer to your account at the course on canvas.

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Reading Notes on Book I of Aristotle's "Politics"

Let me remind you about Aristoteles son of Nikomakhos of Stagira:

He lived from -384 to -322, in the Greek-speaking communities around the Aegean Sea. He spent most of his time in Athens. For the two millennia following his death, he would be, for a large chunk of the world, THE Philosopher: capital “P” and capital “THE”. 1650 years after his death, poet Dante Alighieri would call him “the Master… of those who know”, “il Maestro di color che sanno”. Aristotle’s was, even at so long a distance in time, the most powerful intellectual name that one could conjure with...


https://www.icloud.com/pages/0nLIYWAFXAkPWR0xug-NT21vg


https://www.icloud.com/keynote/0SKox_f6G3cEvDxV-biXLgcPA


Aristotle: Politics, Book I https://delong.typepad.com/files/aristotle-politics-book-i.pdf

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A Note on Reading Big, Difficult Books...

Medieval-reading

Knowledge system and cognitive science guru Andy Matuschak writes a rant called Why Books Don’t Work https://andymatuschak.org/books/, about big, difficult books that take him six to nine hours each to read:

Have you ever had a book… come up… [and] discover[ed] that you’d absorbed what amounts to a few sentences?… It happens to me regularly…. Someone asks a basic probing question… [and] I simply can’t recall the relevant details… [or] I’ll realize I had never really understood the idea… though I’d certainly thought I understood…. I’ll realize that I had barely noticed how little I’d absorbed until that very moment…

However, he goes on to say:

Some people do absorb knowledge from books… the people who really do think about what they’re reading.… These readers’ inner monologues have sounds like: “This idea reminds me of…,” “This point conflicts with…,” “I don’t really understand how…,” etc. If they take some notes, they’re not simply transcribing the author’s words: they’re summarizing, synthesizing, analyzing…

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Note to Self: One take on how we can learn better:

  • Andy Matuschak and Michael Nielsen: How Can We Develop Transformative Tools for Thought? https://numinous.productions/ttft/: 'It’s difficult not to be disappointed, to feel that computers have not yet been nearly as transformative as far older tools for thought, such as language and writing.... We believe now is a good time to work hard on this vision again. In this essay we sketch out a set of ideas we believe can be used to help develop transformative new tools for thought...

  • Andy Matuschak: Why Books Don’t Work https://andymatuschak.org/books/: 'Books are magical! Human progress in the era of mass communication makes clear that some readers really do absorb deep knowledge from books... the people who really do think about what they’re reading.... Readers must learn specific reflective strategies... run their own feedback loops... understand their own cognition.... These skills fall into a bucket which learning science calls “metacognition”.... It’s challenging to learn these types of skills.... Worse, even if readers know how to do all these things, the process is quite taxing...

  • Andy Matuschak and Michael Nielsen: Quantum Computing for the Very Curious https://quantum.country/qcvc: 'Presented in a new mnemonic medium which makes it almost effortless to remember what you read...

Continue reading "" »


A Note: Read Oxford "Very Short Introductions" as a Way of Studying for the Econ 105 Exam...

In general, I am not a believer in studying by rereading things you have read before. I am a believer in reading new things, related to but different from those already assigned in the course. This seemed (and seems) to work far better for me than going back over what I have already read. (Some clues as to why this works can be found in Andy Matuschak: Why Books Don’t Work https://andymatuschak.org/books/: "People [who] do absorb knowledge from books... are the people who really do think about what they’re reading.... If they take some notes, they’re not simply transcribing the author’s words: they’re summarizing, synthesizing, analyzing. Unfortunately, these tactics don’t come easily..." It comes easily to me if I am reading something new but related.) If you are like me, you might find it more productive in studying for the exam not to reread already assigned passages, but rather to take a look at three books from Oxford's Very Short Introduction series:

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Adam Smith: Society & the “System of Natural Liberty”

2.3) Society & the “System of Natural Liberty”: Adam Smith was a genius because he had a truly game-changing insight into how our societal division of labor should be organized. As far as the production and distribution of our collective material wealth is concerned, you see, most of what we need and want is both excludible and rival.

If something is “excludible”, that means we can assign it an owner—some one of us can be designated to control it, and to decide on its use, or decide to transfer “ownership” of it to something else. If something is excludible, we can push the decisions about how it is to be used out to the periphery of society, to the people on the ground who know what is going on, rather than have the decision made by some centralized bureaucracy clueless because of its inability to reliably judge information conveyed to it at third- or fourth-hand. Having ownership makes sense if information about what is going on is dispersed and hard to assemble: giving control to people on the spot is then a very good idea.

If something is “rival”, that means that one person's use of it forecloses the opportunities of others: if I am using this iPhone, you cannot be using the same iPhone. If a good is rival, that one of us is using it diminishes the opportunities and possibilities available to others. That makes them poorer. Thus it makes sense to charge a price for somebody using a rival commodity. That makes them feel in their gut the effects of their decisions on the opportunities open to others. Charging prices is a way to align individuals’ incentives about whether it is worth it for them to make use of a commodity with the effects of their decision on the overall well-being of the society.

Hence, Adam Smith argued in his Inquiry into the Nature and Causes of the Wealth of Nations, the wealth of nations is most greatly enhanced by following the dictates of what he named the System of Natural Liberty—“liberty” because it leaves people free to do what they wanted with their labor and their possessions, “natural” because it conforms with human nature, "system" because it can be and is extended to the status of a general principle. Let people decide what they want to do with their things and their labor, and they arrange themselves in a large highly-productive societal division of labor. Self-interest focuses people on creating value. Competition curbs any distracting focus of self-interest on accomplishing exploitation.

This “System of Natural Liberty” is, Smith argues, good. As Heilbroner summarizes:

Self-interest… drives men to action…. [But] a community activated only by self-interest would be a community of ruthless profiteers. This regulator is competition, the socially beneficial consequence of the conflicting self-interests of all the members of society. For each man, out to do his best for himself with no thought of social cost, is faced with a flock of similarly motivated individuals who are in exactly the same boat…. A man who permits his self-interest to run away with him will find that competitors have slipped in… will find himself without buyers in the one case and without employees in the other. Thus very much as in the Theory of Moral Sentiments, the selfish motives of men are transmuted by interaction to yield the most unexpected of results: social harmony…. The… market is that it is its own guardian. If output or prices or certain kinds of remuneration stray away from their socially ordained levels, forces are set into motion to bring them back to the fold. It is a curious paradox which thus ensues: the market, which is the acme of individual economic freedom, is the strictest task master of all…

This leads to a fraught question: Is this a theological point? Is the fact that acting “naturally” in the sense of giving market exchange free rein produces good results evidence that there is a benevolent Providence out there? Is this a teleological point? Are, in some sense, money and gift-exchange aimed at creating prosperity? How is it that processes that are not human—that lead to consequences not desired directly by any human—have a mind of their own, and lead to good ends? It is indeed a marvel that, as Smith puts it, in his theory at least:

[While] every individual… endeavours… to direct that industry that its produce may be of the greatest value… labours to render the annual revenue of the society as great as he can…. He… neither intends to promote the public interest, nor knows how much he is promoting it…. He intends only his own security…. He intends only his own gain…. In this, as in many other cases, [he is] led by an invisible hand to promote an end which was no part of his intention…”

It is a marvel. But what kind of a marvel is it?

It is not that Smith is opposed to government. Government is necessary to protect property, and to enforce contracts: people—most people—will respect others’ property and keep their own contracts, most of the time. But for the non-most people and at the non-most times we need the police, hence we need government. We need public works. We need public education. We need national defense. Adam Smith is very clear on all of these. In fact, Book V of the Wealth of Nations on what the government should do and how it should do it is the largest of the five parts of the book. But, Smith is certain, attempts of some centralized bureaucrat to undermine the System of Natural Liberty in its proper sphere—to direct who should do what when and where—were likely to produce not wealth and prosperity but poverty and misery.

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Lecture Notes: Adam Smith

Salon

Adam Smith starts with the observation that humans are largely but not exclusively self-interested creatures: we are, largely but not exclusively greedy. Yet we have a complex and sophisticated societal division of labor. And that division of labor is essential to our prosperity. Indeed, it is essential to our survival: drop one or two of us into the Sierra Nevada, even in summer, and we will quite likely die. Drop 100 of us, and we will quite likely survive, and even flourish. How can animals that are by nature greedy nevertheless cooperate on a large scale? That is the deep moral-philosophical question that we can see in both of Smith’s big books...

pages: https://www.icloud.com/pages/0DimW1dRNmxkH9qXpOdbHyOjw
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Hoisted from the Archives from 2006: Tightwad Hill

Tightwad Hill: Stanford Week: "Many of the great rivalries are fundamentally class rivalries - the "big-city" university v the land grant agriculture college. This is what fuels Alabama/Auburn, or Oregon/OSU. Some are even about religion (BYU/Utah) or fashion (USC/UCLA). Cal/Stanford is the only great rivalry that's fundamentally about ideology.... The ideology at play here is authoritarianism. Cal teaches its own to question authority by imposing a faceless, soul-crushing bureaucracy upon its students.... Four years at Berkeley feels like a Kafka novel-you come out with a perhaps too-healthy skepticism of professors, administrators, Presidents and the like. Stanford is a school next to a mall and some golf courses that is populated by cheerful authority figures who want to like you. They serve as your counselor, and help you choose your classes. They arrange comfy dorm rooms, and social events with your fellow fascinating students drawn from all parts of the country. They want you to succeed, because you're one of them-the few, the proud, the elites. Isn't it grand? You exit Stanford feeling really, really good about yourself. You exit Berkeley happy to have survived the experience. Berkeley is exhilirating; Stanford is pleasant. Both sets of alumni run the world, but only one group of alumni feels entitled to...

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Berkeley Social Science: Authors Meet Critics: The Populist Temptation _ http://matrix.berkeley.edu/event/authors-meet-critics-populist-temptation: "Please join us on October 3, 2019 at 4pm for a book talk featuring: Barry Eichengreen, Professor of Economics & Political Science, UC Berkeley; Paul Pierson, Professor of Political Science, UC Berkeley; Brad DeLong, Professor of Economics, UC Berkeley. Barry Eichengreen’s book, _The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era, places the global resurgence of populism in a deep historical context. It argues that populists tend to thrive in the wake of economic downturns, when it is easy to convince the masses of elite malfeasance. While bankers, financiers, and ‘bought’ politicians are partly responsible, populists’ own solutions tend to be simplistic and economically counterproductive. By arguing that ordinary people are at the mercy of extra-national forces beyond their control, populists often degenerate into demagoguery and xenophobia. Eichengreen posits that interventions must begin with shoring up and improving the welfare state so that it is better able to act as a buffer for those who suffer most during economic slumps. In discussing his book, Eichengreen will be engaging two eminent colleagues: Paul Pierson, a renowned specialist in populism, social theory, and political economy, and Brad DeLong, a distinguished economist who served as Deputy Assistant Secretary of the Treasury for Economic Policy during the Clinton Administration and is currently a research associate of the National Bureau of Economic Research. This talk is presented as part of Social Science Matrix's new "Authors Meet Critics" book series, which features lively discussions about recently published books by social scientists at UC Berkeley...

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Josiah Ober: The Greeks and the Rational: The Discovery of Practical Reasons

School of Athens

Josiah Ober: The Greeks and the Rational: The Discovery of Practical Reasons: "September 19 Lecture 1. Gyges’ Choice: Rationality and Visibility. September 26 Lecture 2. Glaucon’s Dilemma: Origins of Social Order. Lecture 3. Deioces’ Ultimatum: How to Choose a King. Lecture 4. Cleisthenes’ Wager: Democratic Rationality. Lecture 5. Melos’ Prospects: Rational Domination. Lecture 6. Agamemnon’s Cluelessness: Reason and Eudaimonia...

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Harry Brighouse: Advice for New College Students: "Bear in mind that while there’s such a thing as getting into too much debt, there’s also such a thing as working too many hours. Seek balance (Finding it is easier said than done). Choose classes on the following bases: does the subject interest you?; how big is the class? (seek out small classes even if you are shy; especially if you are shy, because that’s how you’ll learn not to be); how good is the professor? How do you know who’s a good professor?... Do they engage?... Are they open to a full range?... Do they make you write a lot? (if so, that’s a positive, not a negative) Do they seem to enjoy teaching?... Find out from your friends. Or from your enemies if that’s the best you can do!...

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Ancient Economies: A Malthusian Model: Markdown Notebook

DRAFT: Ancient Economies: A Malthusian Model : The math for complicating the standard Solow Growth Model with (a) a rate of population growth that depends positively on the excess of spending on necessities above "subsistence" and (b) a level of the efficiency-of-labor that depends inversely on population, as a higher population induces resource scarcity that makes labor less productive. For understanding both the long-term apparent stagnation of living standards between the Neolithic and the Industrial Revolutions, and for understanding the rise and fall of ancient civilizations. Question: How should we add on to the Python class for the Solow Growth Model to turn this into a tool for doing problem sets for Econ 101b (and perhaps 135):

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-17-Ancient_Economies.ipynb

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A Competitive Market: Python Class/Notebook

DRAFT: A Competitive Market: A Python class for a competitive market equilibrium with linear supply and demand curves—equilibrium price, equilibrium quantity, producer surplus, consumer surplus, total surplus. Looks for input parameters giving the slopes of the demand and supply curves, plus the maximum willingness-to-pay of the most eager demander and the minimum opportunity cost of the most efficient supplier. Now ready to hand over to others for editing, tightening, and additions.

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-10_market.ipynb

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Solow Growth Model: Python Class/Notebook

CANDIDATE: Solow Growth Model Derived and modified from Stachurski-Sargent http://quantecon.org. A Python class for simulations using the Solow Growth Model, with additional code for performing simulations with baseline- and alternative-scenario parameter values. Focuses on the capital-output ratio κ as the key state variable, as it is (a) observable, and (b) with constant growth-model parameter values converges exactly (in continuous time at least) as an exponential. Now ready to hand over to others for tightening and additions:

https://nbviewer.jupyter.org/github/braddelong/LS2019/blob/master/2019-08-08-Sargent-Stachurski.ipynb

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Note to Self: Is there somebody I should read who has thought deeply and powerfully about these issues?: Homer's Odyssey Blogging: "Like Little Birds... They Writhed with Their Feet... But for No Long While...": I love [David] Drake. I love the Odyssey. But I am distressed to find myself somewhat more sympathetic than I want to be with Plato's recommendation that only "hymns to the gods and praise of famous men" be allowed in the Just City because allowing more would lead to sensation and melodrama and would excite the baser instincts of men. And I have now opened up the following can of worms: How do we educate people to read—listen—watch—properly, so that they become their better rather than their worse selves? Mind you, I do not wish that the Odyssey were otherwise (or that David Drake wrote otherwise). But I do wish we teachers taught better how to read—and listen—and watch...

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Berkeley Economics: Economics CIP Code Update and FAQs | Department of Economics: "(5) What are the practical effects of this change for domestic students? For international students? The reclassification of Economics as a STEM major may enhance research and funding opportunities, job market placement and diversity and growth in the field that can be associated with other STEM majors. For international students, the STEM classification increases accessibility to US job opportunities with an extension of work visas, etc. This was not an available option with our current general economics CIP code.... (6) As an international student, how will this impact my Optional Practical Training (OPT)? OPT is work authorization available to F-1 international students who have been full-time students for at least two consecutive semesters and who plan to seek employment in the United States in their fields of study. On March 11, 2016, the U.S. Department of Homeland Security (DHS) published a new STEM Final Rule, with effective date May 10, 2016. Eligible students may now apply for a 24 Month STEM Extension up to 90 days prior to the expiration of their OPT Employment Authorization Document (EAD). Our CIP code approval qualifies our degree programs as a STEM related field of study for the Optional Practical Training (OPT) extension for employment of 24 months. For further information about your OPT options, please consult with the Berkeley International Office (BIO)...

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Richard Feynman: Math and Science: "How am I going to explain to you the things I don’t explain to my students until they are third-year graduate students? Let me explain it by analogy: The Maya Indians were interested in the rising and setting of Venus as a morning “star” and as an evening “star”—they were very interested in when it would appear. After some years of observation, they noted that five cycles of Venus were very nearly equal to eight of their “nominal years” of 365 days (they were aware that the true year of seasons was different and they made calculations of that also). To make calculations, the Maya had invented a system of bars and dots to represent numbers (including zero), and had rules by which to calculate and predict not only the risings and settings of Venus, but other celestial phenomena, such as lunar eclipses. In those days, only a few Maya priests could do such elaborate calculations. Now, suppose we were to ask one of them how to do just one step in the process of predicting when Venus will next rise as a morning star—subtracting two numbers. And let’s assume that, unlike today, we had not gone to school and did not know how to subtract. How would the priest explain to us what subtraction is?...

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PREVIEW: Economic Growth in Historical Perspective: U.C. Berkeley: Spring 2020

After hearing Ellora Derenoncourt rave about being a TA for Melissa Dell and her Econ 142: The History of Economic Growth, I have decided to go full parasite and stand up my own version of the course for the spring of 2020 here at U.C. Berkeley. Tell me what you think! Here are my notes so far:


Course to be at: Teaching Economics: https://delong.typepad.com/teaching_economics/econ-135.html


Econ 135: Economic Growth in Historical Perspective

This course examines the idea and reality of economic growth in historical perspective, beginning with the divergence between human ancestors and other primates and continuing through with forecasts for the 21st century and beyond. Topics covered include human speciation, language, and sociability; the discovery of agriculture and the domestication of animals; the origins and maintenance of gross inequality; Malthusian economies; the commercial and industrial revolutions; modern economic growth; international prosperity differentials; OECD convergence and East Asian miracles; the political economy of growth and stagnation; and the stubborn persistence of poverty.

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Emi Nakamura 2019 John Bates Clark Medal Winner

American Economic Association

This is so great! And so deserved! I have always thought that the principal benefit to beiong an economist at U.C. Berkeley is how incredibly lucky we all are with our colleagues. It's nice to see the world recognizing that: American Economic Association: 2019 John Bates Clark Medal: "Emi Nakamura is an empirical macroeconomist who has greatly increased our understanding of price-setting by firms and the effects of monetary and fiscal policies. Nakamura’s distinctive approach is notable for its creativity in suggesting new sources of data to address long-standing questions in macroeconomics. The datasets she uses are more disaggregated, or higher-frequency, or extending over a longer historical period, than the postwar, quarterly, aggregate time series that have been the basis for most prior work on these topics in empirical macroeconomics. Her work has required painstaking analysis of data sources not previously exploited, and at the same time displays a sophisticated understanding of the alternative theoretical models that the data can be used to distinguish...

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Framing the Industrial Revolution

https://www.icloud.com/keynote/0-3JUJaZHlPgS6_6W91jmkw8Q


#berkeley #teachingeconomics #teachinggrowth #teachinghistory #highlighted
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Modern Economic Growth Memo Question

Economics tends to view growth as a continuous and diffuse process: if one firm does not solve the problem of how to efficiently utilize resources, others will and drive the first out of business; if one technological vein plays itself out, energy will focus on others. These readings all argue different. They argue one side of a debate. They argue either that some unique and particular institutions and technologies matter a lot. What kinds of evidence not presented in these readings might lead you to come down on one or the other of the many, many sides in this debate—either on the side of economists' standard prior, or that in fact it is still other and still different institutions or technologies or simply the aggregate state of the economy that matters the most?

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Modern Economic Growth: Eagle's-Eye View Slides

https://www.icloud.com/keynote/0uV-761YfOFH171v7LfWSara


#teachingeconomics #teachinggrowth #teachinghistory #moderneconomicgrowth #highlighted #berkeley
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