September 03, 2003
Econ 101b: Fall 2003: The Erosion of Okun's Law

We used to have considerable confidence in Okun's law: that an extra one percentage point rise (or fall) in the unemployment rate over a year would reduce (or boost) that real GDP growth by an extra 2.5 percent over that year because a rising (or falling) unemployment rate would also be accompanied by a falling (rising) share of the population in the labor force and by falling (rapidly rising) productivity. Productivity would fall when the unemployment rate rose for two reasons: first, even when factories are not running at full capacity they still incur substantial setup and maintenance costs; second, even when there isn't enough work for them to do firms would rather hold onto skilled workers than watch them drift away and have to pay to train their replacements the next time the wheel of the business cycle turns. Things have been different, however, in this recession (and to a lesser extent in the preceding early-1990s recession. The standard relationship between output growth and hours worked has gone substantially awry. See that branch poking out of the scatter diagram on the left side? That's the most recent data. (The smaller twig pointing out below and to the left...

Posted by DeLong at 04:22 PM

August 31, 2003
Econ 101b: Fall 2003: Thoughts After One Week

This is going to be an interesting class to teach. It is the most lively undergraduate course I have taught in at least three years. They (or some of them) are very talkative, and they (or some of them) are very interested in challenging me. Whether I do a good job or a bad job this semester will thus depend on whether I can shape their challenges and their talking into a form that will advance the narrative flow I intend the lectures to follow, or whether they will chase down blind alleys....

Posted by DeLong at 11:45 AM

The Architecture of Teaching

It's a horrible room, Evans 70: underground, clockless, windowless, with old blackboards and cheap free-standing metal chairs. Fortunately for me (and them), it is not also horribly overcrowded. I follow Ken Wachter, who is teaching demography. I precede an upper-division mathematical logic class. I soon learned when I took mathematical logic that p -> q was supposed to be the same thing as q v (~p). But I never believed it. It didn't make sense that p -> q should automatically be true whenever p was false. Consider the sentence: "If Socrates were a parrot, he would be 200 feet tall." p = "Socrates is a parrot" q = "Socrates is 200 feet tall". Since p is false, p -> q is supposed to be true. But it clearly isn't. "Implication" in mathematical logic is not what I mean by "If... then... "...

Posted by DeLong at 11:43 AM

August 26, 2003
Econ 101b: Fall 2003: After the First Lecture

Another school year starts, and once again the undergraduates look a year younger than they looked last year: it's amazing how often this happens! At the start of this semester I have only Economics 101b--the go-faster do-more undergraduate economics course. (I'll pick up Economics 202a halfway through the semester.) The course looks good: it looks to be about 60 lively, intelligent, and well-prepared students eager to talk and for whom math is a tool rather than an obstacle. I've already been challenged once with a good question: what happens if foreigners take dollars they have earned and pack them in suitcases which they trade among themselves rather than using them to buy American exports or buy property in America? This is going to be a lot of fun....

Posted by DeLong at 01:54 PM