The Wu Index

Physicists have started using a new index to rank scholars, which has now been applied to economists.

A Reading for the Pigou Club

From Harvard economist Ed Glaeser.

A Paradox

Can the "the Mick Jagger of Harvard" be "Very dorky, very loveable"?

Why food prices are rising

From Yale's Ernesto Zedillo:

There's little doubt that the present spiral in grain prices is closely linked to U.S. and EU policies enacted to boost production of biofuels. The American and European governments subsidize the production of biofuels, limit their import and mandate their use. The exact extent to which these policies have impacted food prices is still a matter of contention, but not even the most enthusiastic proponents of ethanol can deny that by inducing a greater allocation of agricultural resources toward biofuel production, the amount of grain available for food has been reduced. According to the World Bank, while global production of corn increased by 51 million tons from 2004 to 2007, biofuel use of corn in the U.S. alone increased by 50 million tons, thus leaving no margin to satisfy the increase of 33 million tons in global consumption for other uses during the same period. This explains why some respectable experts, such as the former chief economist for the U.S. Department of Agriculture and a top World Bank agricultural economist, have imputed a large proportion of the rise in food prices to the growing use of food crops for fuel.

Wrongheaded biofuel policies constitute only one aspect of the complex and expensive web of protectionist agricultural policies practiced by most developed countries that the WTO Doha Round was supposed to fix. The leading trading countries have repeatedly failed to commit to real reform, with short-term political convenience overriding their own national long-term interests. The latest example of this anomaly is the new Farm Bill approved by the U.S. Congress in May. Instead of reducing agricultural subsidies, this bill provides for bigger and more distorting ones. Even more than the 2002 Farm Bill, this one has eroded U.S. credibility and leadership at the WTO trade talks and given the other key players yet another excuse to evade their own responsibility to make the Round successful.

Remember where the two presidential candidates stand on ethanol and the farm bill.

What do economics and hummus have in common?

They both come in a neoclassical variety.

Thanks to the blog reader who sent this in.

More on the GSE Rescue Bill

Larry Lindsey reports:

Congress rejected a proposal that Fannie and Freddie be barred from paying dividends if they are receiving injections of capital from the federal government. This idea would seem to be the first lesson in a course on Government Bailout 101. The government shouldn't be shoveling taxpayer money in the front door while the company is shoveling dividends to shareholders out the back door.

Freddie Mac paid $1.6 billion in dividends last year while Fannie Mae paid $2.5 billion. Both have dividend yields that are many times higher than the norm. Congress chose to protect the shareholders at the expense of the taxpayer.

The Cost of Being PC

Here is a ranking of academic disciplines by political correctness:

The most PC: Psychology, Sociology, English, History, Elementary education

The least PC: Criminal justice, Economics, Marketing, Accounting, Computer science, Biology, Finance, Management information, Mechanical engineering, Electrical engineering

Political correctness is defined here as "the belief that gender gaps in math and science fields are largely due to discrimination; support for affirmative action; and belief that discrimination is a key cause of racial inequities in American society. Generally, members of this cohort see race and gender as fundamental ."

I notice that the non-PC disciplines appear to correlate with the most lucrative college majors. Some might take this fact as even more evidence that life is fundamentally unfair.