The Virus, Vaccination, and Voting

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July 25, 2021 — Ever since the 1960s, we have heard the cliché, “If they can put a man on the Moon, why can’t they do X?” where X is usually some goal like eliminating hunger — technologically simpler than the scientific miracle of space flight, but harder to accomplish in practice because it involves human behavior.  In 2021, the salient question is, “If we can accomplish the scientific miracle of developing vaccines capable of ending the Covid-19 pandemic that has killed millions, why can’t we convince enough people to get vaccinated?” read more

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How concerned am I about a bubble?

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For The International Economy magazine, Summer Issue, 2021.
Question: “HOW CONCERNED ARE YOU ABOUT A BUBBLE?”

“On a scale of one to ten, how worried are you about the potential for asset bubbles bursting?”

My response:  9 out of10

Financial markets are indeed experiencing bubbles, spurred in part by easy money. Eventually, the bubbles will end.  A bursting could have severe adverse consequences for the real economy, as in 1929 or 2008; but fortunately, that outcome is not guaranteed.

Asset prices are high by historical standards. For example, Shiller’s ratio of US stock prices to cyclically adjusted earnings is above 37, as of June 2021.  It has been above 30 only twice before: 1929 and 2000. read more

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Maxims of Richard Zeckhauser and errors of commission

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July 14, 2021 — Richard Zeckhauser, my colleague at Harvard Kennedy School, is indeed legendary.  A book by Dan Levy, titled Maxims for Thinking Analytically: The wisdom of legendary Harvard Professor Richard Zeckhauser, has been released today.

I recommend it highly. This is not a collection of tangential papers published together in someone’s honor.  Rather each chapter consists of an immortal maxim of Richard’s together with applications to real-world decision-making, whether at the personal or public-policy level. There are 19 such pithy insights, such as “Think probabilistically about the world,” or “Good decisions sometimes have poor outcomes,” or “Eliminate regret.”  Dan skillfully weaves into each of his chapters concise contributions from a big set of Zeckhauser-admirers, including Max Bazerman, Jason Furman, Hsien Loong Lee, Jennifer Lerner, Barry Nalebuff, Larry Summers, among many others. read more

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