Econlinks for 27-12-’07

  • How to avoid recession in USA: Greg Mankiw’s answer. Gary Becker and Richard Posner advocate a similar perspective (the argument is centered, of course, on the subprime housing mess). Former Fed boss Greenspan already said that one should do absolutely nothing and wait for the bubble to break on its own, just as the people above (e.g.
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Econlinks for 27-11-’07

  • Becker and respectively Posner, on tax evasion. Why is tax compliance higher than one would expect (with a reservation here: it also follows from Posner’s argument than in fact tax evasion isn’t necessarily lower than rationally expected…) and is that mainly due to the rational fear of punishment or to the taxpayers’ feeling of moral duty/ fairness etc?
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How intelligent should leaders be?

Although I think there is more to the story, quite insightful thoughts from Richard Posner and Gary Becker on the relationship between intelligence and leadership. A few potential caveats I’d point out very rapidly:
  • the examples considered are clearly selected to fit the theory advanced (though it is far from clear that if one considered, say, all -succesful and unsuccesful – political leaders within the last century, from all over the world, not just the USA, the correlation between intelligence and leadership would turn positive)
  • “leadership failure” is far from easy to define.
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