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Category: Law and Economics
Becker-Posner Blog - January 07, 2010
Oliver Williamson's influential contributions to the theory of firms were the stimulus for our discussion topic this week of the analysis of organizations. Posner gives an excellent discussion of various factors that determine organizational structure and efficiency, such as conflicts between pri
Becker-Posner Blog - January 07, 2010
Oliver Williamson, an economist who won half a Nobel prize last week, has made important contributions to a field of economics that is not as well known as it should be: "organization economics." This is a field, closely related to a branch of sociology called organization theory, to which pionee
Becker-Posner Blog - January 07, 2010
Limiting the compensation of a handful of employees at a handful of firms can't have any effect except to benefit the firms' competitors by making them more attractive places to work. The limitations are a form of scapegoating designed to appease public anger over the high incomes of financiers w
Becker-Posner Blog - January 07, 2010
I sympathize with all the people who are upset by the very large bonuses, stock options, and other compensation received by heads of some financial institutions that ran their companies into the ground through bad investments. However, I also believe it is a big mistake to have a pay czar,
Becker-Posner Blog - January 07, 2010
Longtime readers of this blog will be pleased to learn that this month sees its migration into book form. Uncommon Sense: Economic Insights, from Marriage to Terrorism, which collects what we believe are the best, most interesting, and most lasting posts from this blog. The posts selecte
Becker-Posner Blog - January 07, 2010
The government's preliminary estimate of the growth in American GDP during the third quarter of 2009 is an impressive annual rate of 3.5%. This figure may be revised downward (or upward) as more data on the third quarter become available, but it surely definitely signals that the US recession is
Becker-Posner Blog - January 07, 2010
In October, the President announced that $13 billion (some commentators believe a more accurate estimate is $14 billion) of the $787 billion stimulus package enacted this past February would be used to pay every social security annuitant $250 in 2010, ostensibly to "compensate" for the fact that
Becker-Posner Blog - January 07, 2010
Becker is certainly right that growth in productivity is an important driver of economic growth. But we must consider the source of the growth in productivity in order to understand the conjunction in the last two quarters of rapidly rising productivity with rapidly rising unemployment.
I
Becker-Posner Blog - January 07, 2010
Last week two pieces of news about the American economy were disclosed, with important implications for where the economy is going. On Thursday, the Labor Department reported that during the third quarter of 2009, productivity jumped at the remarkable annual rate of 9½%. On Friday, the Labor Dep
Becker-Posner Blog - January 07, 2010
Japan has had a very slow rate of growth in its GDP since 1991, averaging just a little over 1 percent. Given this slow growth, and the government's continued failed efforts to prop up their economy by running large fiscal deficits, the ratio of government debt to its GDP has risen from on
Becker-Posner Blog - January 07, 2010
Japan spent the 1990s unsuccessfully trying to recover from a collapse of the Japanese banking industry caused by the bursting of a housing bubble, despite aggressive monetary and fiscal policies. As a result of those policies, Japanese national debt soared, but was financed mainly internally bec
Becker-Posner Blog - January 07, 2010
Becker's analysis is impressive, but I hesitate to state with confidence that China would be better off to revalue its currency. As Becker points out, China has pegged its currency to the dollar at a rate of exchange that greatly undervalues its currency relative to ours. As a result China sells
Becker-Posner Blog - January 07, 2010
By all accounts, President Obama's visit to China last week was pretty much a failure on all the major issues, which include China's contributions to climate change, nuclear weapons, and various aspects of the world economy. I will concentrate my discussion on two of the most important and
Becker-Posner Blog - January 07, 2010
During this "Great Recession", unemployment has risen from under 5% at the beginning of the recession in December of 2007 to more than double that rate to reach its highest level so far in October of 10.2%. This is the second highest unemployment rate in the postwar period, surpassed only by the
Becker-Posner Blog - January 07, 2010
On December 3 the President will convene a "jobs summit" to consider what if anything to do about the dismal employment picture. And dismal it is. The figure of 10.2 percent unemployment in October understates the problem because people who have given up on seeking a job, or who are involuntarily
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