EconLog Archive
Law and Economics
Eminent Domain and the Problem of Government
In our forthcoming paper at the Review of Law & Economics, “The Long-Term Impact of Kelo v. City of New London: Comparing State Legislative and Judicial Responses”, my former Western Carolina University colleagues Ed Lopez and H. Justin Pace and I discuss justifications for eminent domain.[1] Primarily, we discuss the holdout problem. The holdout problem .. MORE
Economic Methods
We Must Stop Saying “Must”
In my first year of grad school, one of my professors had a long list of “forbidden words”. These were terms that do more to confuse than enlighten when used in economic analysis. Terms like “need”, “afford”, “exploits”, “vicious circle”, etc. Today, I’ll argue that we might wish to add the term “must” to that .. MORE
Economic Education
EconLog Price Theory: Fentanyl
We’re bringing back price theory with our series on Price Theory problems with Professor Bryan Cutsinger. You can see all of Cutsinger’s problems and solutions by subscribing to his EconLog RSS feed. Share your proposed solutions in the Comments. Professor Cutsinger will be present in the comments for the next couple of weeks, and we’ll post his .. MORE
#ReadWithMe
Introducing We Have Never Been Woke
Time again for another one of my multi-post deep dives into a book I found interesting. This time, the book is We Have Never Been Woke: The Cultural Contradictions of a New Elite by Musa al-Gharbi. As always, my next several posts will be my attempts to reflect al-Gharbi’s views rather than my own, and .. MORE
Liberty
A Nonexistent Quote About Free Trade
I fear we have to admit it: there is not a single truly free country among the 200 or so that occupy this planet. If there were one, we would have expected a representative of its state to declare publicly, about the current trade war, something like the following—let me put it in blockquote even .. MORE
Economics of Health Care
My Weekly Reading for July 27, 2025
Meet the Medicaid Double-Dippers by the Editorial Board, Wall Street Journal, July 21, 2025. Excerpt: The Centers for Medicare and Medicaid Services (CMS) reported late last week that 1.2 million Americans last year were enrolled in Medicaid or the Children’s Health Insurance Program in two or more states. The agency worked with software engineers .. MORE
Price Controls
Price Controls on Oranges
Earlier this week, I posed the following problem in price theory. The government imposes a binding price ceiling on oranges. But it does not impose any price ceiling on orange juice. After the price ceiling on oranges is imposed, what will happen to the price of orange juice? (Assume a competitive market for oranges.) Show .. MORE
Cost-benefit Analysis
Home Economics
After renting for my entire adult life, I decided to buy my own home. At the end of the summer, I will be moving into a lovely condo just a half-mile from my office on campus. In a certain sense, the move to the condo seems like a downgrade. The building is older than my .. MORE
Business Economics
Untenable Tenant Anger
Today, I continue on the previously explored theme on how economics can create reactions others might find as odd. In my earlier take on this, I described how I am very often glad rather than resentful that a particular good or service requires payment – even (especially?) when its something I really need. For this .. MORE
Statistics and Statistical Analysis
It Can’t Be A Coincidence!
Recently, co-bloggers Scott Sumner and Kevin Corcoran had a series of excellent posts on causation, coincidence, and identities (Scott’s post is here and Kevin’s are here, here, and here). I want to add my two cents to the conversation with some readings and thoughts for interested readers. A theme that runs through both their posts .. MORE
Politics and Economics
Does the public favor rent control?
Consider the following tweet: When I moved to Massachusetts in 1982, major cities such as Boston, Cambridge, and Brookline had rent control. Massachusetts is also one of the most Democratic states in the country. Today, Massachusetts doesn’t have rent control. So how did that happen? In 1994, Massachusetts had a referendum on rent control, and voters .. MORE
Business Economics
The REAL Land of Cockaigne
Grocery stores are true marvels of markets. Roast chickens don’t fly into your mouth, but they are roasting on a rotating spit in the deli section. Typical grocery stores carry thousands of items that make the land of Cockaigne look meagre. The centuries old myth and poem about Cockaigne depicts a mythical place that far .. MORE
Incentives
Be Glad It Isn’t Free
People who think a lot about economics often have reactions that strike others as unusual. For example, I recently finished registering for a 10k run in Astoria, Oregon. As part of the registration process, you had to select when you’ll be picking up your race packet (a prepacked bag that would have, among other things, .. MORE
Economic Education
The Effect of Price Controls on Oranges on the Price of Orange Juice
A problem in Price Theory. Here’s a question that I gave a number of my students in economics courses at the Naval Postgraduate School. If I recall correctly, a large percent of the students answered it correctly. And this was well before AI. (Of course, since it was on a problem set, they did have .. MORE
Economic and Political Philosophy
Can a Constitution Limit the State?
A major disagreement between James Buchanan and Anthony de Jasay is whether it is possible to devise a constitution that effectively constrains the state, limits its power and danger. Many other classical liberals and libertarians have struggled with the same question (including Friedrich Hayek), but the opposition between Buchanan and de Jasay is paradigmatic as .. MORE
Regulation
My Weekly Reading for July 20, 2025
Fiscal Fallout: Washington state government spending surges 116% since 2015 by T J Martinelli, The Center Square, July 14, 2025. Excerpt: Washington state faces deficit spending by 2028 as lawmakers just hit taxpayers with the state’s largest combined tax increase – all driven by massive state spending increases over the past decade, an investigation of state .. MORE
Competition
The Protective Effect of a Tariff
Tariffs, like any tax, will generate deadweight loss in the economy. The deadweight loss is broken down into two categories: the consumption effect of the tariff and the protective effect of the tariff. The consumption effect of the tariff is the lost gains from trade that were occurring before the tariff but are now not .. MORE
Books: Reviews and Suggested Readings
It’s Time to Think About the Big Picture Again
Although Paris still gets fed, our economy is facing turbulence. There’s presumably more than one reason for this. One reason I want to highlight here is the failure of many economists to recognise the importance of systems thinking—and act accordingly. So, what do I mean by systems thinking? Essentially, it means analysing a complete system, .. MORE
Statistics and Statistical Analysis
Selective Coincidences
I really enjoyed Scott Sumner’s recent post about how people are bad at understanding coincidences. There are many reasons why we can be bad at this, but one I want to talk about here is that we only selectively recognize certain coincidences, making them appear far more striking than they really are. Here’s an example .. MORE
Cross-country Comparisons
GDP and Living Standards
According to the IMF, America’s GDP per capita (in PPP terms) is 35.6% higher than in Canada. In a recent post, I pointed out that to the casual observer, Canadian living standards seem fairly close to those in the US, albeit slightly lower. In this post I’ll try to address the question of why the .. MORE
Monetary Policy
Interest Rate Cuts and Federal Reserve Independence
Lately, President Trump has been pressuring Federal Reserve chairman Jerome Powell to cut interest rates. This has set off concerns about Federal Reserve independence. And reasonably so. Generally speaking, the more independent the central bank is from political pressure, the better the country’s economy performs on monetary measures like inflation (interested readers can find a .. MORE