EconLog Archive
International Macroeconomics
The centralization of power
Hardly a day goes by without further evidence that the world is moving toward Viktor Orban-style authoritarian nationalism. Here’s the latest piece of evidence, from the WSJ: A small group of the former president’s allies—whose work is so secretive that even some prominent former Trump economic aides weren’t aware of it—has produced a roughly 10-page .. MORE
Incentives
Follow the Money
“Follow the money” is a phrase used in many detective shows and political thrillers. Look for how the villain spent money on or received money from, and there is your culprit. The same is true when examining economic and political decision-making. In today’s world, it is common to talk about rent seeking behavior on the .. MORE
Economics of Health Care
Is Nationalism Bad for Your Health?
In recent years, there has been increasing pressure to isolate the US from any sort of contact with the Chinese economy. The latest sector to be affected is healthcare, where there is a proposal to ban US drugmakers from contracting out various tasks to Chinese firms. Here’s The Economist: The knock-on effects for the Chinese .. MORE
Labor Market
How to Hobble the Fast-Food Industry and Fast-Food Jobs
One of the ideas that economists are most sure of is that when the price of something rises, other than due to something that shifts the whole demand curve, the quantity demanded falls. Conversely, when the price of something falls, the quantity demanded increases. This is not controversial in economics. Moreover, it’s so clear .. MORE
Economics and Culture
In Defense of Seeking the Truth
There have been some interesting developments with NPR recently. A long time veteran of the organization, Uri Berliner, wrote an essay lamenting that the organization has gone from and admittingly left-leaning but still rigorous and fair journalistic enterprise to a politically driven monoculture that lets ideology drive its reporting. NPR, he says, no longer facilitates .. MORE
Price Controls
Great Moments in Denying Reality
California has some of the strictest insurance regulations in the country. It is the only state where insurers are not allowed to base their rate hikes on catastrophe models — forward-looking calculations of risk — or the rising cost of reinsurance premiums, according to both Zimmerman and the Department of Insurance. Under current regulations, insurers are only .. MORE
Economic and Political Philosophy
Factoid and Ideas: King’s Horses Amok in London
Serious arguments, economic and moral, exist to justify the state (the central and sovereign apparatus of government). Serious objections to these arguments also exist. It is interesting to note that most people, including most economists, ignore both kinds. I thought about this when I read the funny factoid reported by the Wall Street Journal about .. MORE
Economics and Culture
It’s Not “Midwest Nice” to Break the Rules
Wisconsin comedian Charlie Berens has a great routine about 4-way stops in the Midwest. Midwest drivers are so nice and obsequious that they’ll endlessly wave the other guy on at the stop sign, even when they were there first and have the right-of-way. Like all good comedy, it’s funny because it’s at least a little .. MORE
Books: Reviews and Suggested Readings
Is Politics Immoral? Meet Princess Mathilde
Political and moral philosophy are related to economics, and even less stealthily to the older political economy. The economist cannot recommend a government policy without making or accepting a value judgment consistent with who is going to be helped and who will be harmed. At least, he must believe that the policy falls within the .. MORE
Energy, Environment, Resources
Externalities Should be Handled with Care
The Financial Times has an interesting interview with Esther Duflo, who was awarded the Nobel Prize in Economics in 2019. She argues that developed nations have a moral duty to compensate poor countries for the damage done by carbon emissions: If you combine these three numbers, you get basically the money value of the cost .. MORE
Books: Reviews and Suggested Readings
Ideas and Implications
Thomas Sowell frequently emphasizes the importance of thinking beyond the immediate and obvious impact of some economic policy and thinking through the larger implications. He actually wrote an entire book dedicated to this idea – Applied Economics: Thinking Beyond Stage One. A similar and useful exercise to evaluate an idea is to really try to .. MORE
Violence and War
Neoconservatism, Nationalism and Liberalism
In recent years, the Republican Party has been drifting toward authoritarian nationalism. The globalists within the party are moving toward retirement, and younger people who are deeply skeptical of the previously dominant neoconservative wing of the party are replacing them. I am also skeptical of neoconservativism, but do not believe that authoritarian nationalism is the .. MORE
Public Choice Theory
Is Our Way of Electing a President Really that Unusual?
A commenter on a recent Pierre Lemieux post wrote: The only shot Trump has (and had) at the Presidency is due to the arcane system used in America to elect Presidents (why not use direct presidential elections like the rest of the world? … it is so much clearer and easy to understand! … .. MORE
Cost-benefit Analysis
My Weekly Reading for April 21, 2024
Five Fiscal Truths by Ryan Bourne, Cato at Liberty, April 18, 2024. Excerpt: The recorded federal deficit from 2023, at $1.7 trillion (or 6.3 percent of gross domestic product, or GDP), was 23 percent higher than in 2022, but even that was pushed artificially downward by the Congressional Budget Office (CBO) recording the Supreme Court’s .. MORE
Economic Methods
Human Costs, Animal Costs, and Economic Costs
People who distinguish “human costs” from “economic costs” are either making an ideological statement or don’t understand what economic theory usefully calls a cost. Just to quote one example: a Financial Times columnist mentions, as if it goes without saying, the “economic, military and human costs” of further confrontation with the Iranian rulers (“Israel Has .. MORE
Cross-country Comparisons
Socialism is a Luxury Good
Several decades of neoliberal economic reforms brought about the greatest global reduction in poverty ever achieved, by far. But success brings laziness, and many countries began to take their achievements for granted. Even successful policies fail to eliminate all economic problems, and because neoliberalism was the dominant strategy from the 1980s to the 2000s, pundits .. MORE
Public Choice Theory
There Are Degrees of Disavowal
Co-blogger Pierre Lemieux writes: Whatever one thinks of the criminal prosecutions and state “civil” suits against Donald Trump (and there are good reasons to question many aspects of them), they represent the powerful state that he has not disavowed, except perhaps in occasional and incoherent baby talk, as long as he was running it. And .. MORE
Political Economy
There Is Politician’s Talk and Politician’s Talk
Whatever one thinks of the criminal prosecutions and state “civil” suits against Donald Trump (and there are good reasons to question many aspects of them), they represent the powerful state that he has not disavowed, except perhaps in occasional and incoherent baby talk, as long as he was running it. And there is something special .. MORE
Business Economics
Robert Hessen RIP
Economic and business historian Robert Hessen died on Monday, April 15 at age 87. I wrote some reminiscences of him on my Substack site, “I Blog to Differ.” Here I want to link to his 2 contributions to my Concise Encyclopedia of Economics. One is his article “Corporations.” Here are two key paragraphs. Here’s a .. MORE
Cross-country Comparisons
Now do Japan
I have frequently argued that China has the world’s largest economy, at least if measured in PPP terms. (Of course in per capita terms they are still only a middle-income country.) Others insist on using market exchange rates, which suggest the US economy is still significantly larger. Fair enough. But you need to be careful .. MORE
Books: Reviews and Suggested Readings
On Fairness – Aesop vs Sesame Street
The YouTube algorithm is a mysterious thing. It’s supposed to recommend videos you might like, based on videos you’ve watched and rated before, but as far as I can tell the recommendations are generated randomly by a half-asleep chimpanzee. Still, just as broken clocks are still right twice a day, random suggestions can manage to .. MORE