Don Boudreaux has challenged UC-Berkeley professor Brad DeLong to a wager similar to the famous 1980 Julian Simon/Paul Ehrlich wager.? (See his letter below)

Simon bet Ehrlich that the prices, adjusted for inflation, of five metals would decrease over ten years. Simon won that bet because he knew that price increases cause conservation and substitution that lead to price decreases.? For example, a lot of copper has been replaced by fiber optic cables made from sand.? (See the wikipedia entry here and the link in the “P.S.” to Don’s letter below.)

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I wonder if Delong accept Boudreaux’s challenge??

Prof. J. Bradford DeLong
Department of Economics
UC-Berkeley

Dear Brad:

Happy 2011!

I write to you as one of your recent nominees (the others being my former student Mark Perry, and New York Times?s science writer John Tierney)
for ?stupidest man alive.?? (I win this contest, by the way, because
I?m certain that both Mark and John are a heckuva lot smarter than I
am.)

Being stupid, I?m an easy financial mark for persons smarter than
myself.? So here goes: let?s make a bet very much like the famous bet
that Julian Simon and Paul Ehrlich made in September 1980.

Because of inflation, I propose that the wager be larger than the
Simon-Ehrlich amount.? How about $2,500?? And I offer to you terms
similar to those that Julian offered to Ehrlich.? Like Ehrlich, you can
choose whichever bundle of five or more raw materials you like, and
choose which (professionally respected) means to be employed for
adjusting nominal prices for inflation.

The bet will be for a duration of at least ten years, but no longer than 15 years.? (You choose.)

If I win (fat chance, I know, given the pinto beans I have for
brains) you will contribute 2,500 (tax-deductible!) U.S. dollars to the
Department of Economics at George Mason University.? If ? er, when ?
you win, I?ll mail you a check for $US 2,500.

Shall we wager?!

Don

P.S.? I add here, for the record, that I agree fully with my colleague Alex Tabarrok?s assessment of the Simon-Ehrlich bet.? Still, I?m willing ? as was Julian ? to bet on real prices as a good-enough proxy for human well-being.

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