True Progress

Why does the car you bought in 2012 cost more than the car you bought in 1960? The Chevrolet Impala was the best selling vehicle in the US in 1960 with a list price of $2,590. This compares to the Toyota Camry, the best selling car in 2012, which has a list price of $22,055. Why the difference of $19,286? Most of us instinctively answer “inflation”, but it is also undeniable that today’s car is safer, more reliable, more comfortable, and more efficient than that of 1960. How much of the price increase is due to technological improvements, and how much is due to pure monetary inflation? Let’s try to answer that question. Read the rest of this entry »

We generally understand efficiency when considering different options to the same problem, for example, how to get from point A to point B, by running, driving, or flying. One method will use more energy than the others and will therefore be less efficient. One refrigerator will chill the same amount of food as another and use less energy and will therefore be more efficient.

We also implicitly understand a trade-off between time and energy (less time to do the same task usually requires more energy). But, when we start to compare different activities, say having steak for dinner versus buying a DVD player or taking a 3-day vacation versus buying a new bicycle we often lack the information to compare the overall efficiency between the two different options in terms of energy or materials or really any possible standard that might interest us. Read the rest of this entry »

Discussions and debates on the merits of various forms of monetary policy–usually relatively technical–have invaded even the mainstream news media of late. One idea often advocated is a return to the “gold standard”, a form of monetary policy in place (although not continuously) sometime after the invention of paper currency until about the 1930′s depending on what country you happened to live in at the time.

While the advocacy in favor of or against a gold standard is often intense (especially in certain circles in the United States and the United Kingdom) specifics on the mechanics and policy implications of implementing such a system are often lacking. Read the rest of this entry »