Spoons and the Social Discount Rate
-
There's an economist, Tyler Cower, with a blog, known for throwing out interesting / contrarian opinions, often on commonplace things. It's generally interesting reading, but last week, his twitter account was hacked:
@MarginalRevolution said:Tyler’s twitter account was hacked yesterday for the most pedestrian of motives:
An amazing new weight loss product! It worked for me and I didnt even change my diet! [link redacted] — tylercowen (@tylercowen) May 31, 2012
Justin Wolfers tweeted that this was rather unimaginative and following a challenge from Eric Crampton at Offsetting Behaviour a new meme was born, #tylertweets. First the honorable mentions:Although gas station tacos are generally excellent you should never get carnitas at a gas station that has clean squeegee water #tylertweets — Gabriel Rossman @GabrielRossman
#tylertweets New in my pile: “50 Shades of Grey”. Self-recommending. — Robert Guico @lpangelrob
@ModeledBehavior truly rose to the challenge:Its hard to imagine spoons will exist in their current form in 30 years. What does this tell us about the social discount rate? #tylertweets — Modeled Behavior (@ModeledBehavior)
Yesterday, Tyler responded to the spoons tweet:
@Tyler Cowen said:
The comments read like something you'd get around here. Sorry, I didn't find any potty humor or video game discussion, but I LOL'd.
Let’s assume an intertemporal equilibrium. The rate of return on buying consumer durables ought to equal (risk-adjusted) the rate of return on capital. Spoon improvement means a lower rate of return on holding spoons, which means a lower return on durables, which in turn means a lower rate of return on capital investment. For a given set of interest rates, that implies a higher rate of social discount.That said, I find it easy to imagine spoons will exist in their current form in 30 years. What if I were wrong? I would be overestimating the MU of money in future periods and thus saving too much. I ought to buy more non-spoon items, renting my current spoons, knowing that spoon improvements will glide me into a cushy retirement.
-
Economy is hard! Let's go shopping!
-
@dhromed said:
Economy is hard!
It is! Just ask (on this side of the pond) for example Richard "cunt" Murphy - retired tax accountant of Wandsworth who has an unwholesome grasp of government procedures but is sadly lacking in econimics nous. Regularly ripped apart by another (yes, the twat also blogs - I got 'banned' for asking where his numbers came from) blogger Tim Worstall. Not that this seems to stop the Retired Accountant of Wandsworth spouting his bollocks.
-
@boomzilla said:
Yesterday, Tyler responded to the spoons tweet
That reads like a Private Eye spoof, "me and my spoons".
