A Nobel for Microfoundations

For the first time in human history, we’re not having enough children to keep the world’s population from falling. And fertility is collapsing fastest not in rich nations but in places like Colombia, Thailand, and Guatemala, upending decades of economic wisdom. Economist Jesus Fernandez-Villaverde tells EconTalk’s Russ Roberts that falling fertility has accelerated sharply over… MORE

An ordinary person can earn a paycheque, pay her taxes, cover living costs and mortgage payments, and perhaps even add to her savings — and at the end of the day she will still owe most of her mortgage. This is a normal state of affairs, and nobody finds it puzzling. Yet when a company… MORE

Why do we keep doing things we know we shouldn’t? And is that really a failure of will? Author Meghan O’Gieblyn spent years trying to answer that question, first in response to her struggle with alcoholism and her loss of faith, and then by means of Simone Weil, William James, and Iris Murdoch, who argue… MORE

Keynesian economics is a theory of total spending in the economy (called aggregate demand) and its effects on output and inflation. Although the term has been used (and abused) to describe many things over the years, six principal tenets seem central to Keynesianism. The first three describe how the economy works. 1. A Keynesian believes… MORE

The Economist has an article discussing the issue of forward guidance in monetary policy. Here’s an excerpt: To guide expectations credibly, officials must eventually follow through with the changes they indicate. The quandary is deciding what to do when conditions change, as they have since the Powell pivot, with inflationary pressure stronger than expected, which… MORE

A professor at the Graduate School of Business at the University of Chicago in the 1960s and a primary figure in Chicago School Economics and in the field of Law and Economics, Harold Demsetz has contributed original research on the theory of the firm, regulation in markets, industrial organization, antitrust policy, transaction costs, externalities, and… MORE

Israel Kirzner, Professor Emeritus at NYU, is among the foremost scholars in the continuing development of the Austrian school of economic theory. He has extended our understanding of the workings of a free society, illuminated the role of entrepreneurs in the process of economic discovery, and shed new light on the dynamics of market forces.… MORE

Nobel laureate James M. Buchanan (1919-2013) was recorded in 2001 in an extended video now available to the public. Universally respected as one of the founders of the economics of public choice, he is the author of numerous books and hundreds of articles in the areas of public finance, public choice, constitutional economics, and economic… MORE

If any twentieth-century economist was a Renaissance man, it was Friedrich Hayek. He made fundamental contributions in political theory, psychology, and economics. In a field in which the relevance of ideas often is eclipsed by expansions on an initial theory, many of his contributions are so remarkable that people still read them more than fifty… MORE

Milton Friedman* Milton Friedman was the twentieth century’s most prominent advocate of free markets. Born in 1912 to Jewish immigrants in New York City, he attended Rutgers University, where he earned his B.A. at the age of twenty. He went on to earn his M.A. from the University of Chicago in 1933 and his Ph.D.… MORE

  Franco Modigliani, an American born in Italy, received the 1985 Nobel Prize on the basis of two contributions. The first is “his analysis of the behavior of household savers.” In the early 1950s Modigliani, trying to improve on Keynes’s consumption function, which related consumption spending to income, introduced his “life cycle” model of consumption.… MORE