BB&T Professor for the Study of Capitalism
Editorial Board Member
As a macroeconomist, I investigate both long-term economic growth and short-term business cycles. My current research explores why IQ and other cognitive skills appear to matter more for nations than for individuals.
For example: A two standard deviation rise in an individual person’s IQ predicts only about a 30% increase in her wage. But the same rise in a country’s average IQ score predicts a 700% increase in the average wage in that country. I want to understand why IQ appears to have such a large social multiplier.
The story is much the same for math and science scores: A person’s individual score predicts little about how she’ll do in the job market, but the richest and fastest-growing countries in the world tend to do much better on math and science tests. If the IQ multiplier is even half as large as it appears to be, then health, nutrition, and immigration policies in developing countries should be targeted at raising the average intelligence of the world’s poorest nations.
An even more important implication of my research is that low-skilled immigrants should be allowed to work in the world’s richest countries: Low-skilled immigrants have little or no net effect on the wages of the citizens of rich countries, but their lives massively improve when they are allowed to work in these countries. I’m currently at work on a book on these themes: The working title is Hive Mind: How your nation’s IQ matters so much more than your own.
In the past, I’ve worked on Capitol Hill and I’ve studied the monetary transmission mechanism. I speak on policy topics regularly in the media and in the Washington, DC, area. Recent media appearances include C-Span’s Washington Journal, the Washington Post, the Wall Street Journal, Bloomberg BusinessWeek, Fox Business, and the New York Times; a full collection here.
Selected Academic Papers
IQ and National Productivity
Abstract: A recent line of research in economics and psychology hypothesizes that differences in national average intelligence, proxied by IQ tests, are important drivers of national economic outcomes. Cross-country regressions, while showing a robust IQ-growth relationship, cannot fully test this hypothesis. Thus, recent work explores the micro-foundations of the IQ-productivity relationship. The well-identified psychological relationship between IQ and patience implies higher savings rates and higher folk theorem-driven institutional quality in high average IQ countries. Experiments indicate that intelligence predicts greater pro-social behavior in public goods and prisoner’s dilemma games, supporting the hypothesis that high national average IQ causes higher institutional quality. High average IQ countries also have higher savings intensity by a variety of measures. Other possible IQ-productivity channels are discussed, as are possible environmental causes of differences in national average IQ.
Human Capital and Institutional Quality: Are TIMSS, PISA, and National Average IQ robust predictors?
(With Niklas Potrafke, Intelligence, 2014)
Abstract: Is human capital a robust predictor of good institutions? Using a new institutional quality measure, the International Property Rights Index (IPRI), we find that cognitive skill measures are significant, robust, and large in magnitude. We use two databases of cognitive skills: estimates of national average IQ from Lynn and Vanhanen (2012a) and estimates of cognitive ability based on Programme for International Student Assessment (PISA) and Trends in International Mathematics and Science Study (TIMSS) scores estimated by Rindermann et al. (2009). The Rindermann cognitive ability scores estimate mean performance as well as performance at the 5th and 95th percentiles of the national population. National average IQ and the 95th percentile of cognitive ability are both robust predictors of overall institutional quality controlling for legal system, GDP per capita, geography dummies, and years of total schooling. Some possible microfoundations of this relationship are discussed.
Patience, Cognitive Skill, and Coordination in the Repeated Stag Hunt
(with Omar al-Ubaydli and Jaap Weel, Journal of Neuroscience, Psychology, and Economics, 2013)
The O-Ring Sector and the Foolproof Sector: An Explanation for Skill Externalities
IQ and Entrepreneurship: International Evidence
(with R.W. Hafer, April 2012)
Abstract: National measures of cognitive skill, including IQ tests, have received attention recently as a possible driver of cross-country productivity differences. In a parallel literature, national measures of entrepreneurial activity and pro-entrepreneurship policies have received similar attention. This paper is the first to demonstrate that higher national average IQ reliably predicts higher ratings for the Acs-Szerb Global Entrepreneurship Development Index (GEDI). Results hold after controlling for GDP, education levels, inequality, broad economic freedom indices, and other factors. Microfounded explanations for these results are considered.
Will the Intelligent Inherit the Earth? IQ and Time Preference in the Global Economy
Abstract: Social science research has shown that intelligence is positively correlated with patience and frugality, while growth theory predicts that more patient countries will save more. This implies that if nations differ in national average IQ, countries with higher average cognitive skills will tend to hold a greater share of the world’s tradable assets. I provide empirical evidence that in today’s world, countries whose residents currently have the highest average IQs have higher savings rates, higher ratios of net foreign assets to GDP, and higher ratios of U.S. Treasuries to GDP. These nations tend to be in East Asia and its offshoots. The relationship between national average IQ and net foreign assets has strengthened since the end of Bretton Woods.
U.S. Troops and Foreign Economic Growth
(with Tim Kane, Defence and Peace Economics, 2012)
The Bond Market Wins
(Econ Journal Watch, 2012)
Human Capital in the Creation of Social Capital: Evidence from Diplomatic Parking Tickets
(with John Nye, 2011)
National IQ and National Productivity: The Hive Mind across Asia
(Asian Development Review, 2011)
Speed Bankruptcy: A Firewall to Future Crises
(Published in Journal of Applied Corporate Finance, Summer 2010)
Cognitive Ability and Technology Diffusion: An empirical test
(Economic Systems, 2012)
IQ in the Production Function: Evidence from immigrant earnings
(Economic Inquiry, 2010)
Are Smarter Groups More Cooperative? Evidence from repeated prisoners’ dilemma experiments, 1959-2003
(Published in Journal of Economic Behavior and Organization, 2008)
Dynamic IS Curves With and Without Money: An international comparison
(Published in Journal of International Money and Finance, 2008)
On Money and Output: Is money redundant?
(Published in Journal of Monetary Economics, 2007)
Intelligence, Education, and Economic Growth: A Bayesian averaging of classical estimates (BACE) approach
(Published in Journal of Economic Growth, March 2006)
Syllabus for Fall 2014 Ph.D. Mathematical Economics
Syllabus for Spring 2014 Principles of Macroeconomics
Syllabus for Fall 2013 Ph.D. Mathematics for Economists
Syllabus for Spring 2013 Principles of Macroeconomics
Syllabus for Spring 2013 M.A. Macroeconomics
Syllabus for Fall 2012 Ph.D. Mathematics for Economists
Syllabus for Spring 2012 Principles of Macroeconomics
Syllabus for Spring 2012 M.A. Macroeconomics
Syllabus for Graduate Public Choice
Syllabus Fall 2011 M.A. Mathematical Economics
Syllabus for Graduate Monetary Economics
Syllabus for Ph.D. Macroeconomics I
Syllabus for M.A. Mathematical Economics
Syllabus for M.A. Macroeconomics
Syllabus for M.A. Economic Growth
Syllabus for M.A. Time Series Econometrics
Syllabus for Undergraduate Public Choice
Syllabus for Undergraduate Economic Methodology
Syllabus for Principles of Macroeconomics
Syllabus for Principles of Macroeconomics
Syllabus Spring 2010 M.A. Macroeconomics
Additional Writings and Presentations
10% Less Democracy: How Less Voting Could Mean Better Governance
Precautionary Saving: A two-period illustration
There are few good closed-form results for precautionary saving, here’s a simple example that you might find useful if you’re learning or teaching dynamic economics with a little math.
Using the Solow Growth Model as a Forecasting Tool
Does today’s fast growth in country X signal that country X is catching up to the economic frontier? Or will the growth likely sputter out far before country X catches up?
Abstract: If a moderately rich country grows fast, that’s a strong signal of convergence, according to the Solow Model. But a poor country has to be growing exceptionally fast for it to be a signal that they’re one their way to catching up with the global frontier.
Taxes Rational Workers Want: An Illustration of the Chamley-Judd Theorem
A 2-page discussion of the Redistribution Impossibility Theorem, with links to two simple Excel simulations, March 2013
Abstract: As a rule, rational workers prefer to tax workers, not capitalists.
(Mercatus Center Working Papers, with Daniel Rothschild, 2011)
A Political Coase Theorem for the Intelligent
(Slide presentation at Konstanz University, 2011, and Public Choice World Congress, 2012)
The Economics of Financial Crises
(Slide presentation for Moscow State University graduate students visiting GMU, December 2009)
The Great Recession
(Slide presentation for George Mason University’s inaugural Alumni Weekend, October 2009)
Economics of the Geithner Plans
(Slide presentation for the Mercatus Center’s Capitol Hill Campus series, April 2009)
(Slide presentation for the Mercatus Center’s Capitol Hill Campus series, March 2009)
Artificial Intelligence and Economic Growth: A few finger-exercises
(January 2009: A response to a discussion between Robin Hanson and Eliezer Yudkowsky at Overcoming Bias)
Imitate FDR’s Treasury Secretary: Bankruptcy not Bailouts
(November 2008: Published in U.S. Exchequer, pages 45-46)
My media clippings, catalogued by Mercatus.
My Twitter feed, GarettJones: All the economics I can fit into 140 characters.
A 2009 photo of my brother Jerry and I backpacking in the Vogelsang section of Yosemite National Park. Photo taken by my brother Mitch.
A macroeconomic revolution all in one photograph.
A photo of me in my office in Carow Hall.
A TV series you really ought to watch.
And another: The first sitcom inspired by public choice theory.
Another kind of spontaneous order.