- Stelios Michalopoulos, Alireza Naghavi and Giovanni Prarolo on Trade, geography, and the unifying force of Islam
Islam spread remarkably quickly before the era of European colonialism. This column argues that an important economic factor in determining the geographic range was spatial inequality that necessitated a politically unifying force like Islam. Regions that harboured such economic inequality were especially ripe for a system like Islam that offered progressive redistributive tenets with centralised authority to enforce them.
- Marco Annunziata on The next productivity revolution: The ‘industrial internet’
Today’s technological innovation is regarded by many as all about social media and entertainment, with no impact on economic growth. This column argues that such scepticism is premature. A closer look at selected industries suggests that the ‘industrial internet‘ – a network that binds together intelligent machines, software analytics and people – through accelerated adoption of sensors and software analytics, will have a powerful impact on productivity and growth.
- Mario Rizzo on Interests are More Powerful than Ideas?
What has changed since 1960 with regard to economic liberty? From an intellectual perspective, so many more people are aware of Ludwig von Mises, Friedrich Hayek and non-Keynesian economic thought. Milton Friedman spread his ideas about market-oriented economic policy. Thanks originally to James Buchanan and Gordon Tullock, we know again about public choice and rent seeking. (Somehow intellectuals had forgotten the lessons taught by James Madison and others.) Most economists are, at long last, convinced that Mises and Hayek were broadly correct about socialist calculation.
And yet government is more involved in more aspects of the economy, by far, than in 1960.
- Winton Bates asks Can happiness surveys predict the desire to migrate?
The Gallup organization has found in its surveys that about 15 per cent of the world’s adults would like to move to another country permanently if they had the chance. The rate varies substantially between different parts of the world, with about 38 per cent of adults in Sub-Saharan African countries saying that they would like to move permanently if they were able.
About 80 per cent of those who wish to leave low-income countries would like to go to high-income countries, with the United States the most popular destination in terms of absolute numbers. The desire to move tends to be higher in countries with medium to low human development, according to the UN’s Human Development Index.
- John Taylor on Recent Books to Read on Rules-Based Money
For a respite from the saga of the fiscal cliff why not read some of the latest books on monetary economics and policy? Below is a list of books on money published in 2012 which I found to be interesting and provocative. You can find a common theme in these books: that poor economic performance provides convincing evidence of the need for a sound rules-based monetary policy. But you can also find disagreement about how to achieve such a policy with proposals for interest rate rules, money growth rules, fixed exchange rate systems, nominal GDP targeting, and gold and commodity standards. Though my favorite is a simple interest rate rule (also discussed in this book on the Taylor rule), one can learn a lot by studying the case for other rules
- Anton Howes on Out-innovate the state
Even in the face of high taxes, borrowing and debt, the history of modernity gives us every reason to be optimistic. Economic growth and the rise in living standards since around 1780 has been immense. In Britain, not even accounting for improvements in the quality and choice of consumer products, the average person is 1500% wealthier than their ancestor in 1780. Crucially, this progress has been the result of sustained innovation, increasing the productivity of existing processes and products, and displacing the markets for old goods with newer and better substitutes in a process of creative destruction. Perhaps more importantly however, innovation is also able to displace government provision and restriction of certain goods.