Somehow he succinctly describes the key insight in one page. Here is the full paper at jstor. I vainly searched the web for “Akerlof rat race intuition” and of course there was nothing better, because why bother? The article marked a key turning point in the shifting of thinking of most economists away from a “with free markets and people and firms engaging in voluntary transactions the presumption should be to leave things alone” to a perspective of “with information asymmetries ubiquitous and indeed constantly ‘manufactured’ the presumption should be that we know very little about how economies are really working.” The issue came up in a student discussion of the 35 hour work week, versus, say, a 40 or 50 hour work week. How would we research and justify a stance as a citizen one way or the other? (Assuming that the whole point of the work week restriction is that it is fairly binding on what some people and firms would otherwise want to do.)
Blogs I Follow
- Key leader in the Burkina Faso tri-border area interviewed about… how to spend lots of money!
- Who would have thought in other countries there is also demand for protectionism? Ghana’s footwear manufacturing industry
- Recent reading and viewing recommendations
- Great quote from Teju Cole, “Every Day is for the Thief” about markets!
- A most disturbing finding about ethnicity in Kenya
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