A roundup of the best economic posts on the Web
Signatures of speculation
Paul Krugman on his New York Times blog is looking for signs of speculation as food prices rise, and isn't finding any:
"If high futures prices induce increased storage, this reduces the quantity available to consumers, and it can raise the price. And you can, in fact, argue that something like this has been happening for cotton and copper, where there are apparently large and growing inventories. But for food, it's just not happening: stocks are low and falling."
A license to shampoo: Jobs needing state approval rise
Despite calls for smaller government in the United States, a number of business are seeking more regulations to govern their industries:
"The hope is that regulation will boost the prestige of their professions, provide oversight and protect consumers from shoddy work. But economists - and workers shut out of fields by educational requirements or difficult exams - say licensing mostly serves as a form of protectionism, allowing veterans of the trade to box out competitors who might undercut them on price or offer new services."
Why did economists not spot the crisis?
With a hat tip to WSJ Real Time Economics, Raghu Rajan's take on why so many of his peers failed to forecast the financial crisis which precipitated the Great Recession:
"Like medicine, economics has become highly compartmentalized – macroeconomists typically do not pay attention to what financial economists or real-estate economists study, and vice versa. Yet, in order to see the crisis coming, you had to know something about each of these areas, just like it takes a good general practitioner to recognize an exotic disease. Because the profession rewards only careful, well-supported, but necessarily narrow analysis, few economists try to span sub-fields."