Interviews with Hayek

GMU folks might enjoy this interview by Jack High of Nobel Laureate F.A. Hayek. There are several other videos in the series, which should appeal to everyone, especially if you want to know a bit more about Hayek than what was in the Hayek vs. Keynes rap video.

Some Reasonable Thoughts on the Stimulus

I normally steer clear of such topics, but Megan McArdle offers some good thoughts:

Wading through the online debates, I note that opinions on stimulus are nearly 100% correlated with the composition of that stimulus, and the opinionator's prior view of that activity. So when Democrats are in power and stimulus is mostly spending, liberals think that the stimulus is an issue of fierce moral urgency stymied by venal greed and rank idiocy, while conservatives develop deep qualms about budget deficits. When Republicans are in power, and stimulus consists mostly of tax cuts, Democrats get all vaporish about deficits and the income deficit, while Republicans suddenly realize that the normal rules don't apply in an emergency. When out of power, both sides will grudgingly concede that some small amount of highly temporary stimulus might be all right, but note (correctly) that the other side seems to be trying to make permanent as much of this "stimulus" as possible.

For me, then, this mostly ends up as a proxy war over the level of government spending, a war I'd rather fight honestly on value grounds rather than attempting to disguise my preferences with a shoddy veneer of "scientific" logic.

Consequences of Entrepreneurial Finance

From the NBER Digest:

Some of the 'softer' features of entrepreneurial financing, such as angels' mentoring and networks of business contacts, may have helped the new ventures the most.

Angel investment groups are an important and growing source of entrepreneurial finance. These groups - which are typically semi-formal networks of high-net-worth individuals - meet regularly to hear aspiring entrepreneurs pitch their business plans before deciding whether to invest in such ventures. In The Consequences of Entrepreneurial Finance: a Regression Discontinuity Analysis (NBER Working Paper No. 15831) co-authors William Kerr, Josh Lerner, and Antoinette Schoar analyze the role of these "angel" entrepreneurial financiers in the success and growth of new ventures. Their approach also exploits breakpoints in the funding process to separate the role of matching (that is, good entrepreneurs pairing with good investors) from the value provided by the angel investors.

What is the ROI from Higher Education?

Bloomberg this morning offers its analysis of this question. MIT comes out on top, with the highest net return on investment (about $1.7 million over 30 years), although it doesn't have the highest annualized rate of ROI. That honor goes to the Georgia Institute of Technology, which has an annualized net ROI of 14.2%. By comparison MIT's is 12.6%.

One story about the relative merit of attending MIT versus a public school with much lower in-state tuition is that entrance is equivalent to purchasing a lottery ticket (Brad DeLong discusses one version of this). MIT students will no doubt find an excellent job upon graduation, but some will find a job that is so excellent that they will soon be millionaires. Presumably the odds of becoming super-rich are higher from one of the elite schools than for one of the bargain schools. Of course, it could simply be that MIT is a great school and offers a superior education or perhaps that students who enroll are more motivated and thus just do better after graduation. Thoughts?

The Big Questions: Health Edition

From the World Policy Journal: "What is the most pressing health issue and how can it be solved?" The intro article offers several answers by a panel of experts (PDF). The TOC for the full issue, which is focused on issues of global health, is here. John Barry, the author of the wonderful The Great Influenza, has a free, ungated article on the next big pandemic (PDF). It is self-recommending, as they say.

Beer and Entrepreneurship...?

"We wanted to celebrate entrepreneurship — and good beer!" That's Rep. Betsy Markey, cited by Tim Haab at Environmental Economics. The broader context is (Politico):

House Resolution 1297, sponsored by Rep. Betsy Markey, supports "the goals and ideals of American Craft Beer Week."

"We've got quite a number of microbreweries and entrepreneurs that are creating jobs, and we wanted to celebrate that this is a craft," Markey told POLITICO.

"I think beer has been a tradition since this country was founded," said Markey.

Is it possible that the term "entrepreneurship" is used too frequently and with too loose an interpretation?

High Growth Firms

There is some great research on the important role of gazelles and young firms in driving growth and job creation. An interesting new study takes another look at some of these results. The abstract:

Prior studies have defined high-growth firms (HGFs) in terms of sales or employment, and analyzed their contribution to employment growth. We define HGFs by employment and sales and add definitions of value added and productivity. We examine the contribution of HGFs to employment growth, economic growth, productivity growth, and sales growth. All HGFs give a disproportionately large positive contribution to economic growth and most also give large positive contributions to growth in employment, productivity and sales. Although HGFs of different definitions are usually not the same firms, young firms are more likely to be HGFs irrespective of definition.

The paper is by Sven-Olov Daunfeldt,Niklas Elerta, and Dan Johansson, and is focused on Sweden. The results seem comparable across countries however.

"The economic contribution of high-growth firms: Do definitions matter?" (PDF)

The Degree Gap

Mark Perry has a great post about the number of female versus male collegiate graduates. One sentence (carpe diem): "For associate's, bachelor's and master's degrees, women will receive 1.823 million college degrees, which will be 571,000 more degrees than men will earn (1.252 million) this year."

The post is fascinating, and it has a link to the underlying data. Do check it out.

Esther Duflo on Randomized Trials

At Ted, Esther Duflo gives an overview of how randomized control trials can help answer questions in public health and education (via Alex Tabarrok).

The State Dept View of Entrepreneurship

Jeff Cornwall has a funny post about an email he recieved from the U.S. Department of State, which reflects, in part, how government thinks about entrepreneurship policy. Jeff is too hard on Josh Lerner, who's done great work on innovation policy, but otherwise it's something to keep in the back of your mind as the President prepares to kick off his Summit on Entrepreneurship.