Research Findings That Don’t Surprise Me

20 September 2010 at 1:47 pm 7 comments

| Peter Klein |

The Institutional Causes of China’s Great Famine, 1959-61
Xin Meng, Nancy Qian, Pierre Yared
NBER Working Paper No. 16361, September 2010

This paper investigates the institutional causes of China’s Great Famine. It presents two empirical findings: 1) in 1959, when the famine began, food production was almost three times more than population subsistence needs; and 2) regions with higher per capita food production that year suffered higher famine mortality rates, a surprising reversal of a typically negative correlation. A simple model based on historical institutional details shows that these patterns are consistent with the policy outcomes in a centrally planned economy in which the government is unable to easily collect and respond to new information in the presence of an aggregate shock to production.

It is said that when the Nobel Prize in economics was first established, prizes were given for using economics to teach people things they didn’t already know, e.g., that economic growth might increase inequality, that depressions are caused by central banks, that macroeconomic stabilization policy doesn’t work, etc. Now, prizes are given to economists who teach other economists things that regular people already know — politicians are self-interested, you shouldn’t put all your eggs in one basket, institutions matter, different people know different things, etc.

Entry filed under: - Klein -, Institutions, New Institutional Economics. Tags: .

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7 Comments Add your own

  • […] para pensarse: el Nobel de economía Peter Klein en Organizations and Markets: It is said that when the Nobel Prize in economics was first established, prizes were given for […]

  • 2. FC  |  20 September 2010 at 3:05 pm

    Uh, yeah. I would expect a famine manufactured by the totalitiarian political elite to be directed at other sources of wealth and power. As seen in USSR, Sudan, Cambodia, and pretty much every other case.

  • 3. PLW  |  20 September 2010 at 4:03 pm

    How many things do regulator people know that aren’t true?

  • 4. PLW  |  20 September 2010 at 4:03 pm

    Make that “regular people”, although the original also applies.

  • 5. David Hoopes  |  20 September 2010 at 5:53 pm

    Here’s a new book that details the number of people who died a few years later during Mao’s “Great Leap Forward.” The estimate is an upward revision of previous work. I realize this is tangential at best to the discussion. But, as Peter’s post notes, occasionally academics seem to take the long way around to a point.

    http://www.independent.co.uk/arts-entertainment/books/news/maos-great-leap-forward-killed-45-million-in-four-years-2081630.html

    I really like the, “different people know different things” bit. Guess I can retire now.

  • 6. David Hoopes  |  21 September 2010 at 10:46 pm

    I’m mildly surprised by the Tea Party posting on orgtheory.net. I don’t really get why the Tea Party is seen as being so extreme. Sorry for going off on another tangent.

  • […] teórico convencional sobre los mercados de trabajo. Lo que enlaza con una reflexión que hacía Peter Klein antes de la concesión del premio sobre las conclusiones de un paper (pero que puede aplicarse, y […]

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