Monday, June 25, 2012

Postrel and Cowen on Schooling

praises and excerpts a post by Steve Postrel about the signalling model of schooling and the rising cost of University level education.  

In it he attacks the signaling model on education but talks a lot about rigor and the lessening for rigor in a negative way.  

If schooling is about capital formation shouldn’t rigor be reduced over time as new discoveries about how to educate and new technologies come on line?

If the goal is to teach more people more of what they need to know to live a better more productive life we should never focus on rigor.  We should rather focus on what is learned. Instead of talking about rigor we should discussing that students need to learn more information, more important information and develop better skills. Once you mention rigor, though it can be a tool to get people to learn more, I think signaling because rigor is an indirect goal. Rigor in the non-signaling model in never the goal, learning is the goal and we are not sure that rigor always increases learning (see Robert Frank).

Tuesday, June 5, 2012

Sumner: "Lower inflation during recessions is a sign of procyclical monetary policy, i.e. policy failure"

Scott Sumner writes:
Lower inflation during recessions is a sign of procyclical monetary policy, i.e. policy failure.

Yes! I do not know why pop econ is so counter to this.  If we are producing less due to investment mistakes or supply shocks or whatever, prices in general should go up as supply goes down. The fact is that sometimes inflation is good and sometimes deflation is good.
One proof that inflation is sometimes good is that farm and petroleum economies are doing good (North Dakota has very low unemployment).  Employment is high in food and petroleum producing areas, and as for real wealth production is up and rising. 

Let me address another thing to my fellow conservatives.  You think that debt is bad and that people and corporations should pay down their debt but you fret about the rise in base money.  Well since money is created be debt wont we need much more base money if everyone gets wiser and uses less debt?

Now a big problem is that monetary policy is controlled by voters and though relatively lower home prices are good and needed but to home owners, who are mostly voters lower home prices are a negative and so they want lower food and gasoline prices and higher home prices.