Vertical integration

Images are from the grand finale chapter of chicagopricetheory.com 2nd edition. 3/3

the premium in absolute terms.

Their prediction holds up almost perfectly 40 YEARS LATER!! If they are correct, today’s large premium could easily increase another 1.5X over the next 20 years. Who wants to advise wide swaths of young people that Katz and Murphy will suddenly be wrong? 2/3

In defense of diplomas:

With 40-years old data, Katz & Murphy predicted that the skill premium in wages would grow 3 percent per year minus any movement down the demand curve due to increased skills in the workforce. 3 percent is a lot; rarely since WWII has skill accumulated enough to reduce...1/3

Video version: youtu.be/1zcIko_L_40?...

Links to McCloskey and Pashigian.
archive.org/details/appl...
archive.org/details/pric...

Landsburg has this as Exhibit 15.11. Here are McCloskey and Pashigian. But the other dozen texts I know don't have it.
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This gem of price theory is useful for public, macro, and labor. Once seen, it's obvious. Yet is quite rare, at least in published textbooks or article.
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youtu.be/qv1JFjT8QeM?...

Short and sweet from Cass Sunstein.
casssunstein.substack.com/p/a-note-on-...

Murphy, Topel, Philipson, and Mulligan: www.youtube.com/watch?v=GY7Y...

Several good bits in this trip down memory lane.
www.wsj.com/economy/infl...

Based on the new Public Choice paper rdcu.be/dTe82

A thread by @dieworkwear.bsky.social argued that clothes are not made as well as in the past. IMO that is also the case for appliances. Now other durables as well according to WSJ. Why a reduction in durability of durables, as tech progress advances?

www.wsj.com/lifestyle/co...

The prediction was based on anticipated regulatory activity, the costs of which proved to be unfairly distributed. Might that be why the 2024 voting patterns varied by household income?

Here is an interesting article that looks at it on a per capita basis. Pretty close to the -5.0% we predicted in 2020.
www.wsj.com/opinion/nobe...

Price Theory is Essential for Causal Inference!

Don't miss out -- understanding these 18 minutes will change how you do economic measurement.
www.youtube.com/watch?v=1zcI...