EconLog Archive
International Macroeconomics
Herb Stein on Balance of Payments
One of the best decisions I made in the early 1990s was to get Herb Stein to do a piece on the balance of payments for The Concise Encyclopedia of Economics, which was then The Fortune Encyclopedia of Economics. His first two paragraphs are still beautiful: Few subjects in economics have caused so much confusion—and .. MORE
Adam Smith
Authoritarianism: A Deal with the Devil
The mouse smiled brightly It outfoxed the cat! Then down came the claw, And that, Love, was that -Lyrics to a lullaby recited by the devil Raphael Commenting on a recent post by Scott Sumner, Mactoul argued “Authoritarianism is useful when you are trying to downsize the federal bureaucracy.” This sort of love affair .. MORE
Competition
Henderson on Canada as a 51st State
On February 14, I received an email from Alexa DiFrancesco, a producer at the government-funded Canadian Broadcasting Corporation. She wrote, in part: I’m reaching out because my team is working on a Canada-US call-in show between 4 and 6pm ET (2pm and 4pm MT) on Sunday, Feb 23rd. It will be carried on NPR, CBC and .. MORE
Books: Reviews and Suggested Readings
Review of the Strong Gods II: Big Picture Problems
Even though I like the broad brush-strokes of Reno’s ideas, as I mentioned in my previous post, I think there are important points where Reno goes wrong. First of all, while Reno (to his credit) acknowledges that the banishing of the strong gods was motivated for good reasons, and in response to real horrors, he .. MORE
Labor Mobility, Immigration, Outsourcing
Back to the farm?
At one time, most Americans were farmers. By late 20th century, the vast majority of farmers had moved to the city for jobs in manufacturing and services. More recently, China is going through the same sort of transformation, as hundreds of millions of people move from the countryside to the city. This has contributed to .. MORE
Free Markets
How Today’s Egg Prices Scrambled Traditional Economic Theories
Late one night in 1989, economist Jeffrey Sachs found himself in a smoke-filled room of government officials in Warsaw, Poland. The country had just declared independence from the Soviet Union, which had exerted central control over prices of tens of thousands of items, leading to frequent shortages. Sachs argued to the economists and politicians that .. MORE
Finance
Don’t Cap Credit Card Interest Rates
A proposal to cap credit card interest rates at 10% is gaining support from politicians on both the left and the right. Advocates argue that this policy will work to the advantage of potential borrowers who will no longer be charged rates of 25% or higher. But things aren’t so simple. For one, there’s a .. MORE
Books: Reviews and Suggested Readings
Unshackling the Shackled Leviathan
Commenting on a post of mine, co-blogger Scott Sumner offered a striking reflection: “I feel sort of like Rip Van Winkle, like I fell asleep in the USA and woke up to find myself living in a banana republic.” According to a Wall Street Journal story, some members of Congress are beginning to start waking .. MORE
Politics and Economics
The Evolution of Sanctions
Jordan Schneider has a very informative interview with Edward Fishman, who is an expert on the use of sanctions. Until recently, the US would occasionally impose sanctions but not require other countries to adhere to our policy. That all changed with the Iran sanctions, where the US imposed secondary sanctions on third parties that engaged .. MORE
Books: Reviews and Suggested Readings
Review of the Strong Gods: Some Positive Notes
In the previous posts of this series, I have simply been describing the ideas R. R. Reno lays out in his book The Return of the Strong Gods, attempting to put the case in terms I think Reno himself would agree accurately represents his ideas. At this stage, I’ll be adding my own thoughts to .. MORE
Books: Reviews and Suggested Readings
Repeating a Historical Experience of Autarky?
As the US government’s enervation and economically illiterate interventionism fuel trade wars and dreams of autarky, it is worth looking at the long historical experience of economic isolation that started under the late Chinese emperors at the time of our High and Late Middle Ages. Three books help us understand the world in that regard. .. MORE
Economic Methods
Was this Kuznets Idea “Stupid”?
On his blog yesterday, Harvard economics professor Greg Mankiw stated that the idea of excluding government spending from GDP is “amazingly stupid.” Unfortunately, he didn’t say why. It would be nice to know why. I’m not sure if Greg is aware of this: a Harvard University professor who won the Nobel Prize in economics in .. MORE
Labor Mobility, Immigration, Outsourcing
Some Further Thoughts on Housing
Here are some housing articles that caught my eye: 1. A recent paper by Sven Damen, Matthijs Korevaar & Stijn Van Nieuwerburgh has the following abstract: Residential properties with the lowest rent levels provide the highest investment returns to their owners. Using detailed rent, cost, and price data from the United States, Belgium, and The .. MORE
Liberty
My Weekly Reading and Viewing for March 2, 2025
Matt Taibbi: The Collapse of the Censorship Regime Interview by Zach Weissmueller and Liz Wolfe, “Just Asking Questions,” Reason, February 27, 2025. Excerpt: The Department of Homeland Security…has this concept, you know, they call it building resilience on the one hand, or pre-bunking on the other, which is this idea of introducing a potentially controversial or difficult idea to .. MORE
Economic Education
EconLog Price Theory: Cutsinger’s Solution to the Membership Difference
Question: Uber offers a membership option that entitles members to a percentage reduction in the price of Uber rides. Evaluate the following two statements: 1- Suppose an Uber customer is indifferent between becoming an Uber member or paying the standard Uber ride price. This customer will never spend less, and, in general, will spend more .. MORE
Labor Mobility, Immigration, Outsourcing
The Ultimate “Gold Card”
President Trump recently proposed a “gold card” aimed at high net worth immigrants, which would sell for $5 million. Tyler Cowen has an article in Bloomberg that discusses the pros and cons of this proposal: It’s a good idea, both from the standpoint of government revenue and for wealthy prospective immigrants. But the US would .. MORE
Cross-country Comparisons
Property Rights in Colombia: Reality and Challenges
According to the International Property Rights Index, prepared by the Property Rights Alliance, Colombia ranks 80th out of 125 countries. While this result reflects some progress in the protection of property rights compared to nations with less institutional development, it also highlights significant challenges. Factors such as corruption, legal insecurity, and weak protection of intellectual .. MORE
Energy, Environment, Resources
Pierre Poilievre on Canada’s Dysfunctional Energy Policy
In a recent interview with Canadian psychologist Jordan B. Peterson, Conservative Party leader Pierre Poilievre noted some important facts about Canadian oil. The whole 11-minute interview is worth watching. Some highlights: 4:10: The nature of the Canadian trade surplus. “Yes, it is a ripoff. Canada is ripping itself off.” 4:25: Canada’s entire trade surplus .. MORE
International Macroeconomics
How does a stronger US dollar hurt international college students?
Two years ago, a bright-eyed student stepped off a plane from Melbourne after a 17-hour flight to the United States, excited to begin a college journey in a new country. He had never been to the USA before and was ready to deal with whatever tribulations studying in a foreign country had in store. However, .. MORE
Free Markets
Aluminum, Economics, and Liberty
Consider the market for aluminum and the general tariff of 25% that the US administration has planned to impose on all American importers of this metal starting March 12 (compared to a current tariff of 10% that hits fewer aluminum products and exempts some countries including Canada and Mexico). A very good starting point for .. MORE
Fiscal Policy
What money?
I see a lot of discussion about what the government should do with the $1 trillion dollars that DOGE intends to save by reducing wasteful government spending. In fact, this is not a meaningful question, as even in the unlikely scenario where DOGE achieves $1 trillion in saving, there would be no money available to .. MORE