EconLog Archive
International Trade
A Bad Month for Libertarians?
In this essay, I say that libertarians had a bad month in November. Howard Dean came out in favor of re-regulation of “utilities, large media companies and any business that offers stock options.” As Megan McArdle put it, “those of us with libertarian tendencies had better keep looking for a politician who is really interested .. MORE
Economic Growth
Economics of Nanotechnology
If the nanotechnology revolution takes off, what will be the economic consequences? Brad DeLong proposes this analytical framework: What commodities–what goods and services–become extraordinarily cheap as a result of the technological revolution? What human activities–what jobs and skills–become key bottlenecks, and thus become remarkably valuable and well-paid? What risks blindside the society as the technology .. MORE
Austrian Economics
Meeting the Enemy
What leads to bad economic policy? Bryan Caplan writes, On the conventional view—widely accepted by economists, pundits, and the man in the street—the public demands policies in its own best interest, but the political system ignores their wishes. Bastiat and Mises dispute both parts of this story. They assert that democratic competition effectively drives politicians .. MORE
Social Security
Social Security Reform
The Social Security Administration has evaluated a proposal by Peter Ferrara for private social security accounts. This plan would establish voluntary, progressive individual accounts for workers who are under age 55 on January 1, 2005 and would provide for a reduction in the Social Security retirement and aged survivor benefits for those who participate. All .. MORE
International Trade
Immigration Policy
Samuel Brittan calls for an open immigration policy in the UK. If we favour the free movement of goods, capital and people, between Yorkshire and Lancashire, or between the north and south of England, why should a frontier make a difference? … Why not try complete free movement of labour for a five or ten .. MORE
Price Controls
A Re-importation Parable
Edward Lotterman tells fellow Minnesotans a parable to try to help them understand drug re-importation. The incomes of U.S. surgeons are substantially higher than those in any other country in the world. U.S. hospitals could save consumers tons of money by flying in rotating squads of Brazilian and German surgeons to operate on U.S. patients .. MORE
International Trade
India and the U.S.
Business Week runs a long, balanced article on India’s economy and its relationship to the United States. For all its R&D labs, India remains visibly Third World. IT service exports employ less than 1% of the workforce. Per-capita income is just $460, and 300 million Indians subsist on $1 a day or less. Lethargic courts .. MORE
Macroeconomics
Labor Market Issues
Today’s New York Times has two opinion pieces on the labor market. Pessimist Steve Roach does not believe that the productivity growth that we are seeing is real or lasting. we are woefully underestimating the time actually spent on the job. It follows, therefore, that we are equally guilty of overestimating white-collar productivity. Productivity is .. MORE
Regulation and Subsidies
Regulation and Housing Cost
Is housing more expensive in Manhattan because land is more valuable there? Edward L. Glaeser, Joseph Gyourko, and Raven Saks argue that housing is more expensive because of regulation. In twelve out of the twenty-one markets that we examine, on average home costs no more than ten percent more than the costs of the physical .. MORE
Finance: stocks, options, etc.
Financial Crime
Michael Lewis writes, The millions of dollars that mutual funds have, in effect, stolen from their small customers are dwarfed by the billions they have wasted for them. In his just-published book, “A Random Walk Guide to Investing,” Burton Malkiel shows that over the past two decades index funds have outperformed 88 percent of managed .. MORE
Economics of Health Care
AARP rent-seeking
I have not been following the prescription drug benefit bill closely enough to be able to provide a sound economic analysis. According to the Washington Post, I am not alone. This is an extremely expensive, 1,100-page bill that will have a profound effect on the nation’s fiscal and physical health. And although it was not .. MORE
International Trade
Trade Policy
Who is setting trade policy in the Bush Administration? Certainly not Bruce Bartlett, who writes, one of the new trade restrictions applies to brassieres. Yet there is no domestic manufacturer of this product… The Bush administration has shown incredibly poor judgment in trade policy ever since taking office. Its steel tariffs backfired by costing more .. MORE
Price Controls
Drug Price Controls
Some economists published a petition against drug price controls. Drug-price controls are more difficult to remove than other price controls. Controls on oil and other products often tend to be limited or short-lived, as voters eventually object to the resulting shortages and distortions. The effects of drug price controls, however, are far more difficult to .. MORE
Energy, Environment, Resources
New Energy Legislation
Lynne Kiesling, who believes that rent-seekers should be prosecuted, is in an accusatory frame of mind concerning the latest energy legislation. She writes, choosing to expand ethanol mandates as a renewable energy initiative is a big mistake. Using more ethanol will increase our dependence on foreign oil and impose costs that far outweigh its benefits. .. MORE
Fiscal Policy
Trade Deficit, Saving, and Tax Policy
I argue that our trade deficit is really a savings deficit. Increasing exports relative to imports is not a matter of beating up on China to live up to its commitments in the World Trade Organization. It is not a matter of prohibiting U.S. firms from outsourcing to India. It is a matter of increasing .. MORE
Regulation and Subsidies
Prosecute Rent-Seekers?
Lynne Kiesling sketched an interesting idea for antitrust enforcement. prosecutions based on the use of lobbying, regulation, and political relationships (i.e., rent seeking) to deter entry. Economists traditionally have evaluated monopoly power using measures such as the Herfindahl index of concentration. Kiesling is suggesting that only industries with monopoly power will spend resources lobbying Washington .. MORE
Regulation and Subsidies
Prairie Population Problems
Both Michael Lind and Ronald Bailey note a population decline in the old prairie states. However, they come to opposite conclusions. Lind wrote, Imagine a federal program that would help poor and working-class Americans to move not from crowded cities to suburbs in the same general area but from crowded states to low-density states where .. MORE
Information Goods, Intellectual Property
Government and Research
In this essay, I argue that we should not fear losing our technology edge. In doing the cost-benefit analysis on government funding of scientific research, one factor that should not be given weight is national competitiveness. I can see worrying about our ability to compete in military technology, but not in civilian research. I really .. MORE
Microeconomics
Price Discrimination and Profitability
Alex Tabarrok asks, If we graphed use of price discrimination against profits would we find a positive slope across the economy as a whole? I doubt it, yet this is what the theory would seem to predict. Send me your thoughts. My first reaction is that it is difficult for me to come up with .. MORE
Austrian Economics
Austrian Economics
After taking a quiz on Austrian Economics, I wrote about my agreements and disagreements with that school. Much of what I believe about economics is based on the concept of imperfect knowledge. Imperfect knowledge implies that as we gain knowledge, our standard of living improves. However, we still have much to learn. We know how .. MORE
Macroeconomics
Knife-edge Macroeconomics
One of the more irritating tropes in economic journalism is the “knife-edge” metaphor. A reporter will write a news-analysis piece that breathlessly explains that the Federal Reserve is on a knife edge, with recession on one side and inflation on the other. It seems as though the New York Times editorial writers have read too .. MORE