EconLog Archive
Economics of Health Care
Sowell on Health Care
Thomas Sowell has an essay in three parts on the issue of universal health care coverage. In part one, he challenges politicians who continue to treat profits as evil, in spite of the superior performance of capitalism relative to socialism over the last half century. With profits eliminated, in theory there should have been lower .. MORE
International Macroeconomics
Deflation-fighting and Depreciation
Continuing the discussion that began with the thread Liquidity Trapped?, we can add opinions from Richard Berner of Morgan Stanley and Victor Canto of the Cato Institute. Canto writes, The data make a compelling case that we are on the verge of deflation. While no one can hold Alan Greenspan and the Federal Reserve solely .. MORE
Energy, Environment, Resources
California Energy Regulation
Lynne Kiesling bemoans electricity regulation policy in California. [The original deregulation effort] was much more about freeing up restrictions on trade in wholesale electricity markets, although it did a pathetic job of that, requiring buyers and sellers to use the government-created faux market that was the Power Exchange, mandating that they engage only in day-ahead .. MORE
Macroeconomics
Liquidity Trapped?
The threat of deflation and/or a liquidity trap has been discussed in a number of places recently. Columnist Robert J. Samuelson writes, Global demand remains weak; surplus capacity discourages new investment; gluts depress prices. Deflation could be dangerous: Lower prices could squeeze profits and depress stocks; and lower prices could prevent corporate debtors from repaying .. MORE
Austrian Economics
Comment of the Week, 2003-05-07
In the thread about capitalism as a benevolent system, Ward mused, Maybe there should be a school of Austrian Environmentalism that studies innovative ways to clean up or maintain the environment. To which Lynn Kiesling replied, one organization that does provide insights into “Austrian entrepreneurship” applied to environmentalism is PERC: To read more of the .. MORE
Cost-benefit Analysis
Nanotech Research Funding
Is Federal funding for research in nanotechnology justified? Declan McCullagh raises some doubts. First, private sources will pay for basic research. It may not be at the level that all researchers would prefer, but if it can lead to applied research results, the private sector will still do some of it. Second, nanotechnology includes a .. MORE
Fiscal Policy
Rethinking Keynes
In Would Keynes Change His Mind?, I suggest that some key elasticities in the economy have changed since Keynes wrote. Today, the economy is more elastic than it was in the 1930’s. Today’s recession is a far cry from the Great Depression of the 1930’s. Of course, some of this may be due to a .. MORE
Fiscal Policy
Social Security Tax Cut?
A proposal from former Labor Secretary Robert Reich: The best and the fastest way to get more money into the pockets of people who are likely to spend it quickly is to cut the taxes of average working people. Most people pay more in payroll taxes — primarily for Social Security and Medicare — than .. MORE
Austrian Economics
Capitalism as a Benevolent System
Critics of capitalism see it as a cruel system that fosters injustice and exploitation. An alternative view is offered by many economists, particularly those of the Austrian School. George Reisman, for example, speaks of what he calls twelve insights into the benevolent nature of capitalism. For example, A continuing increase in the supply of economically .. MORE
Fiscal Policy
Comment of the Week, 2003-04-30
On the subject of job-creation arithmetic, Paul Zrimsek writes, It’s a pity that the great divide-by-ten controversy has diverted everyone’s attention from what ought to be the main point: that the comparison Krugman drew between tax losses to the government and the salaries of the created jobs is meaningless whether he’s doing the math correctly .. MORE
Efficient Markets Hypothesis
Stock Market Regulation
‘Jane Galt’ casts doubt on the deterrence value of the settlement in which Wall Street investment firms agreed to pay a large fine. I don’t want this to be the opening act in some morality play, directed by Spitzer, in which the rest of America is absolved for speculating wildly on investments they don’t understand. .. MORE
Energy, Environment, Resources
Regulatory Pollution
Discussing a forthcoming study of air pollution by Joel Schwartz, Ronald Bailey writes, For example, [Schwartz argues that] a proposal to raise the prices of conventional cars and use the extra money to lower the prices of electric cars—which are estimated to cost $17,000 more than conventional cars—would be counterproductive. Since new conventional cars will .. MORE
Fiscal Policy
The Budget Debate, IX
Jonathan Rauch has a nice summary of the issues in the Budget debate. The economists note that if tax cuts are paid for through higher deficits instead of lower spending, the government borrows back from the economy the capital that it injects. The administration retorts that its dividend tax cut will improve the allocation of .. MORE
Fiscal Policy
Spend Less on Education?
Sometimes, an economist argues against conventional wisdom, as in this essay, where I question the view that the government needs to increase its spending on education. If we combine the limited extent to which education is a public good with the factors that make government the highest-cost producer, it becomes almost certain that the cost-benefit .. MORE
Fiscal Policy
Job-Creation Arithmetic, II
On his web site, Paul Krugman has posted the textbook macroeconomics of fiscal policy for stimulating employment. In a related post, Krugman explains how this basic macroeconomic model explains what some people (like me, for instance) found puzzling about a recent column in the New York Times. No, I didn’t forget to divide by 10…no .. MORE
Economic Growth
Savings, Capital Deployment, and Growth
I was taught in graduate school that economic growth has two main drivers: the savings rate, which determined the steady-state capital-labor ratio; and the efficiency of labor, which increases over time due to technological change and better human capital. Yesterday at a seminar, I heard IMF chief economist Ken Rogoff mention another parameter: the efficiency .. MORE
Trade Barriers
Trading with Weasels
In this essay, I argue against excluding France, Germany, and Russia from trading with Iraq. Private-sector companies from France, Germany, and Russia should be allowed to compete for Iraq’s business, along with other private-sector companies. Even if we have a quarrel with the governments of the Weasels, it is not productive to take revenge on .. MORE
Microeconomics
Basic Supply and Demand
Reading this story about unemployment among computer programmers left me feeling amused and vindicated. “This is the worst I’ve seen,” said … an out-of-work systems integration analyst, who has been involved in the tech industry since 1974. “I’m running into people who have been out of work a year or a year and a half. .. MORE
Economics of Education
Comment of the Week, 2003-04-23
On the subject of productivity in the government sector Scott (no last name included) wrote, …All of the educational proposals currently in vogue specifically involve reducing productivity. They keep looking for smaller class sizes and higher teacher pay with the promise of better educational achievement for the students. But no one is promising as large .. MORE
International Macroeconomics
Optimum Currency Areas
Martin Feldstein explains why Europe is not an optimum currency area, even though the United States is one. First, American employees move within the country when demand is relatively weak in a particular region, facilitated by a common language and a culture that regards moving across the country as perfectly normal. Germans are not leaving .. MORE
Fiscal Policy
Job-Creation Arithmetic
Paul Krugman writes, The average American worker earns only about $40,000 per year; why does the administration, even on its own estimates, need to offer $500,000 in tax cuts for each job created? Krugman’s arithmetic is to take the ten-year revenue loss from the tax cut, divide that by the number of jobs that supposedly .. MORE