Monday, July 16, 2012

More evidence that yes, markets do work to supply the high skilled labor needed to run a modern economy...

...has been submitted by me to the National Academy of Sciences to appear as an insertion in a forthcoming report of theirs. Sorry - nothing to show now, but I'll share it when it comes out.

Markets work. And markets also fail sometimes. And when they fail, I occassionally think it's appropriate for governments to do something (often not). But one thing that definitely doesn't make sense is for government to do something when markets are working how we want them to work!


  1. I think I've asked you this question before Daniel Kuehn, but I don't think I got a response. I could be wrong though. In any case...

    If you found a study by econophysicists (using the tools of statistical physics or other advanced techniques from physics) that featured the STEM training labour market, would you cite it?

    Also, what is your opinion of statistical mechanics/statistical physics?

    1. Well that would depend on the study, of course - what it said, etc.

      I don't have much of an opinion either way on statistical mechanics and statistical physics. Knowing what little I do about quantum theory I imagine it's a very important approach.

  2. Daniel, you being keen on labour market matters, you might like my recent post on how crucial is the opaque heterogeneity of labour in understanding how labour markets and how wages are sticky because they are based on contracts set in nominal terms (to take advantage of the enormous information and transaction cost advantages of money) where set rates are basic to the control/risk trade-off that is at the heart of the employment contract. Expecting employment contracts to act like commercial contracts in sharing risk is to mistake what makes an employment contract an employment contract (accepting direction traded-off against a floor under income risk) while expecting them to be on-going auctions undervalues existing employees as known quantities with firm-specific knowledge.

    It's my of course wages are sticky post.


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