Ap Economics Barron 39;s Pdf

[Elia Khensamphanh]

Daniel Barron is an Associate Professor in the Strategy department. He received his PhD in Economics from the Massachusetts Institute of Technology in 2013. Before coming to Kellogg, he was a Postdoctoral Associate at Yale University. Professor Barron's interests include contract theory and organizational economics. His research focuses on how firms and other organizations build and sustain collaborative relationships.

His primary teaching interests include the economics of information and macroeconomics, while his research interests are labor economics and contract theory. He has served as the Loeb Professor of Economics as well as head of the Department of Economics.

Barron is also a faculty affiliate in the Purdue University Research Center in Economics (PURCE), which he was instrumental in launching in 2013 along with Krannert economics professor John Umbeck and current department head Justin Tobias.

He has had numerous articles published, including papers in the American Economic Review, Journal of Human Resources, Journal of Law and Economics, International Economic Review, Review of Economics and Statistics, and the Journal of Labor Economics.

Over the course of his career, Barron has been a consultant to the U.S. Department of Labor, the Small Business Administration, ARCO, Texaco, Shell, Visa International, Amoco, and various law firms. He has received research grants from the Brookings Institution, the Department of Labor, the National Institutes of Health, the Carthage Foundation, the National Science Foundation, Small Business Administration, and W.E. Upjohn Foundation, among others.

Kai Barron is a postdoctoral research fellow at WZB Berlin Social Science Center and a member of the Berlin School of Economics (BSE). His primary research fields are behavioral and experimental economics. Barron's work focuses on studying how individuals process information, thereby constructing narratives, and forming expectations to understand the world around them.

During his time at the Minda de Gunzburg Center for European Studies (CES), he will focus on identifying the factors that influence individuals when they choose to adopt one narrative explanation of objective data over another. He will also study how narratives can be used as a persuasive tool to shift the beliefs and behavior of individuals and evaluate which interventions can be used to protect against this form of potentially harmful persuasion.

EPSTEIN: I really do. Writing about economics is a joyride. A boss once told me that I?m the only person he?d ever met who reads fat tomes on economic theory for fun! But economics is fun. If you read the right books, you find out that economics offers wisdom that helps solve the great mystery of how society goes about creating prosperity.

I haven?t always loved economics. My mother was a communist and my father was a capitalist, so I was always consumed by this great ideological drama while growing up. After college, I started going to the New School for Social Research to find some answers. I became Robert Heilbroner?s prot?g? and I wrote for his textbook. I don?t want to criticize him because he helped me, but, candidly, I must say there wasn?t a lot of substance there. But there wasn?t a lot of substance in any of these economics classes.

I began teaching economics while at the New School, but at some point I just couldn?t face the class any more and teach the models which seemed to have so little to do with real people and their economic decisions. My lack of enthusiasm came through in my teaching. So I quit. I had decided that I was not a socialist, and, in those days, there didn?t seem to be much room for non-socialists teaching economics.

I decided to get a real job on Wall Street. I became a commodities analyst, and in that way, I began to develop an intuition about markets and how they worked. Those were tough times of rising inflation. I recall housewives boycotting rising beef prices. Not knowing that they should have been attacking the Fed, they went after mythical price gougers at the local grocery store.

EPSTEIN: I noticed a book called Man, Economy, and State by Murray Rothbard in the library of the New School. I browsed through it briefly, then bought it. I read it and began to get excited about economic science, realizing that I was an Austrian. The theory connected with what I knew from my profession in the commodities industry and that there was such a thing as economic science.

Later I read virtually all of Mises. But Rothbard, to my mind, is the greatest Austrian of them all. And yet he stood on the shoulders of Mises. The Austrians were very lucky to have had two great geniuses working in one century. This is very unusual in the history of thought.

Trailing after Mises and Rothbard, to my mind, is Hazlitt, who was also a great genius. My favorite Hazlitt book is The Failure of the New Economics. I wish it had a racier title because it sure is a lively book. It yields an enormous amount of wisdom about economics. I recall when a book attacking Wall Street came out by Doug Henwood (who has another book attacking information technology on the way). It was a complete misunderstanding of Wall Street and what it is supposed to do.

As often happens, you cannot find an answer to people like Henwood in the conventional literature, and yet his brand of anti-capitalism is very powerful. The Austrians, and Hazlitt in particular, have done important work by dealing with these people in great detail.

Later I took a job as senior economist at the New York Stock Exchange, and was there for 13 years. That?s where I learned about statistics and mainstream economics. But what I brought to it was an Austrian skepticism. And today I use the Austrian theoretical framework to inform my work. I once received a letter from a reader that I treasure: it said ?you are the best economics columnist since Henry Hazlitt.? Imagine that!

I loved his History of Economic Thought. My great regret is that he wasn?t able to cover the period he was most interested in, from Carl Menger up to the present. My favorite part of the two volumes he did finish is his chapter on Adam Smith. Robert Heilbroner loved Adam Smith, and I was supposed to teach Smith?s work in seminar. I remember thinking that Adam Smith?s treatise was a mess. I was appalled at the chaos I was confronting. It?s true that Smith had a magisterial style, but otherwise I was thrilled when Rothbard ripped into him.

I hear people say that Rothbard was not fair to Smith, and failed to give him credit for what Smith did well. Maybe, but part of the glory of that book on the history of economic thought is that it is all so fresh, and Rothbard?s personality shows through in the prose. Praising Adam Smith is old hat; Rothbard gives a completely different view with definitive judgments.

EPSTEIN: This is actually one of the great advantages of my job. Everyone is anxious to explain his or her perspective. When a new report or statistical release comes out I like to call Wall Street economists and give them a hearing. But I also call academic economists, including Austrians, and even economists working for statistical bureaus, who are often quite knowledgeable. These three groups rarely speak to each other, so I see part of my job as alerting each group as to what the other group is thinking.

I try to be a jack of all trades and a semi-expert on at least some. I talk to the Wall Street economists for insight on the developing drama of the economy. What?s been going on for the last few years is a case of high drama, and the Street economists know more about it than the academics. But from academic economists, particularly Austrians, I can discover the underlying rationale for deeper trends. I want to use their insights in a way Street economists do not.

I must say that some money-market economists I know have recently been taking a deeper interest in questions like: how does the Federal Reserve affect economic trends? One man I know, Lewis Crandall, worked on the desk at the New York Fed, and now he covers the central bank as an independent analyst. He knows how money is created, which is unusual. He understands that the ISLM model is nonsense. He has a far more realistic view of markets than most academic economists. So there are some people out there who are able to draw wisdom from news reports and academic treatises.

EPSTEIN: They often exasperate me. They have an absolute obsession with working solely with government statistics to derive their insights. They believe the numbers, never question them, and completely refuse to draw on other evidence. Not all, but far too many.

For instance, let me cite the case of the national income accounts, which refers to interest plus consumption plus government plus net exports. The part of the consumption component of the national income accounts, which is two-thirds of the gross domestic product, that applies to food consumption has been declining in real terms throughout the 1990s. If you take the nominal estimate of food consumption and you whack it, the way they always do, with the price index, food consumption was indeed declining in real terms on a per capita basis.

Are we really supposed to believe that through the 1990s, the average American was eating less, even though it didn?t seem to show up in any other statistic? The normal pattern is that when an economy expands, waistlines expand with it. I was perplexed that this wasn?t happening, and called the US Department of Agriculture. They, of course, happily work on a much lower level of abstraction than most academic economists. They don?t deal with nominal sales numbers and then whack it with a price index. They have pretty good figures, for example, on pounds of meat sold?on or off the bone. And their numbers showed meat consumption increasing.

Then I called the Bureau of Economic Analysis, which keeps these big numbers. The guy who is in charge of the food numbers was indeed willing to grant that there might be something wrong. He wasn?t aware of the numbers from the Department of Agriculture. He just instinctively figured they were wrong. I wanted to say, ?look, you know they are wrong, so why not apply a little ad hoc escalator and make them increase?? But he couldn?t do that because it would throw everything into chaos.

c80f0f1006