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Luke Froeb
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27 followers
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Luke's posts

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Nice summary of the affordable housing crisis
in the S tanford Law Review : [the cause of the affordable housing crisis] is uncontroversial among urban economists but not broadly understood by low-income families, advocates for low-income families, housing activists, and their allies in academia, polic...

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Who monitors the monitors?
In our problem solving framework we ask three simple questions to diagnose goal misalignment: Q1:  Who made the bad decision? Q2:  Did they have enough information to make a good decision? Q3:  And the incentive to do so? Answers to these three questions wi...

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Cost disease in education and health
Fabulous post on why costs have gone up so much in education a corresponding increase in education or health.   The two graphs describe the problem: The question an economist would ask is simple: So, imagine you’re a poor person. White, minority, whatever. ...

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Why three point shots are the best in basketball
Basketball coach Dan D'Antoni on why his team takes so many 3-point shots: "If you can get a layup and it's clean — it's not one that's highly contested — it's [worth] 1.8 points [per attempt]. It's 1.3 from that corner, 1.27. Do you know what a post-up is,...

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The trickiest trade in the world is ...
negotiating a ransom .  Moral hazard, adverse selection, and uncertainty. HT:   Merle Hazard

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Another pension fund lowers discount rate to 7%
If a pension fund has to pay out $100 in 30 years, and earns 7.5% on its investments, it must save 100/(1.075)^30=13.14 today.  If it earns only 7.0%, the amount that it much save increases by 15%. Calstrs, the second biggest pension fund in the world , jus...

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Why currency devaluations are losing their punch
Typically a currency devaluation will help domestic firms because it makes their exports cheaper in the foreign country, which increases demand. However, if the domestic firms also import, then the currency devaluation will also drive costs up. We find that...

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RIP, Dewey
Colleague former Fed Governor Dewey Daane, died last week at 98.   Nice obit in WSJ .  He was one of the first to welcome me to Vanderbilt, invite me into his Tennis game, and introduce me to the rest of Nashville, all of whom he knew.  One of the most colo...

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REPOST: Stossel on Greed


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Short-termism is inefficient
The Knicks basketball team have only a three-year contract with their best young player.  As a result, they have less incentive to worry about his long term viability, and have increased his playing time from 28 min/game to 35 min/game.  Somewhat predictabl...
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