So, here are some thoughts on Masonomics in general.I've had a few courses in the econ dept but the bulk of my experience is with the School of Public Policy (SPP). In general SPP represents a wider range of views across a range of disciplines (economics, sociology, political science, engineering...), but the two main items I'd add to this list are that regions are the most useful unit of analysis, and that it is not possible to talk about domestic policy without talking about international policy; there are few domestic policies that are not affected and influenced by internalional institutions and politics. In general there is considerable overlap between the economics department and SPP, and both departments share a focus on rigorous and multidisciplinary methods (econometrics, social network analysis, GIS...).
1. Incentives matter. That is central to economics. It also is important for political economy--Masonomics uses public choice, which says that government officials, rather than acting as benevolent omniscient stewards, respond to incentives.
2. Signaling matters. It matters in education, health care, finance, politics, marketing, and personal relationships. I would suggest that if there is to be a Masonomics perspective on macro, then signaling should be central.
3. Institutions matter. Formal and informal rules shape economic behavior, for better or worse. For example, differences across countries in the standard of living are determined largely by institutions.
4. Evolution matters. When others see a lack of planning or central direction as chaos, Masonomists see Hayek's spontaneous order. A system of decentralized trial-and-error decisions works better than many people realize. Central regulation works less well than many people expect.
Monday, May 4, 2009
Arnold Kling discusses Alex Tabarrok and Tyler Cowen's new Macroeconomics textbook and finishes his review with a summary of Masonomics: