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Medicare Part D causes a 63% increase in the number of annual prescriptions.” Effects on patient health: Zip. Zero. Nada. (NBER via Jason Shafrin)
Paul Samuelson’s prediction on what would happen when World War II ended: “There would be ushered in the greatest period of unemployment and industrial dislocation which any economy has ever faced.” (HT to David Henderson at Econlog)
The marshmallow test. It’s a simple test with impressive predictive power. (HT to Samuel Arbesman via Marginal Revolution)
The Paul Samuelson quote is priceless. Thanks to David Henderson for unearthing it.
I don’t think I need a marshmallow test to know that people who are present oriented and lack self discipline will not do as well in life.
Actually, Samuelson was correct. There were three major events that occurred at the end of WW2. First, many of the women hired during ww2 were fired to make room to hire returning the GIs. Second, the GI Bill included both free college tuition and unemployment insurance. Since we had pretty much universal conscription it resulted in universal free college tuition. Those college graduates spurred the greatest economic growth we’ve ever known. Third, we had the Marshall Plan, that didn’t just send money to Europe but we built entire factories that we shipped to Europe. We avoided unemployment by spending alot of money.
artk, if you are correct, why wasn’t there massive unemployment when the nation got back to normal, i.e., the Marshall Plan ended, the soldiers graduated, women continued to enter the labor market, and federal spending got down to 18% of GDP?
The Medicare Part D finding is inconsistent with the research of Frank Lichtenberg (also often apperaing at NBER). See the previous post at this blog here: http://www.john-goodman-blog.com/newer-drugs-are-keeping-people-alive/
Ah… The marshmallow test. I was one of those kids that would have held onto the marshmmallow until it rotted in order to get the two marshmallows later on.
I tried a similar version of the test with my nephew during Christmas. I offered him the choice of a certain amount of money this year versus a larger amount next year if he waited. He chose to wait, which was a good thing. However, I have not seen him repeat this behavior in his regular life.
They tried this on me when I was a kid. My response was to build a campfire to toast the marshmallow. They stopped the experiment immediately.
But seriously, the best way to deal with this is for the subject to hide the marshmallow. In at least one case, the researcher tells the kid not to get out of the seat. If that is a rule, the kid could still take the plate and stick it under his seat.
Of course, the experiment is unrealistic because the marshmallow is the only stimulus in an otherwise barren room. In the real world, we are interrupted by countless temptations. Nevertheless, this is how productivity experts recommend dealing with interruptions like the constant flow of e-mails: Turn off Outlook until you’re ready to read them.
By my count, four of the kids (two boys and two girls) pulled little bits out of the marshmallows or took small bites. They will grow up to be politicians, because they figured out how to cheat on technical grounds.
“artk, if you are correct, why wasn’t there massive unemployment when the nation got back to normal, i.e., the Marshall Plan ended, the soldiers graduated, women continued to enter the labor market, and federal spending got down to 18% of GDP?”
Pent up demand is part of the answer. Also, the US was the surviving industrial major power. We had not taken the hits that Europe had. We invested in turning our factories back out of war mode. We became the world’s factory, with little viable competition. We also created a new, better educated work force. We were the innovators.
Steve