EconLog Archive
Public Choice Theory
Anti-Consumer Regulation
Two recent columns concerning the regulation of Internet commerce show how regulation sometimes restricts competition at the expense of the consumer. The Wall Street Journal argues that state regulations prevent consumers from obtaining health insurance that otherwise would be available via the Internet. New Jersey’s regulators, for example, have the power to tell insurers what .. MORE
Social Security
Paris in the Springtime
Two recent opinion pieces discuss the French ritual of strikes in May. The Wall Street Journal writes, Four workers financed each pensioner in 1960 and two in 2000. By 2020 the ratio will be one-to-one. Mr. Raffarin has told the French that “If we do nothing today, in less than 20 years our pensions will .. MORE
Growth: Consequences
“Concentrated Poverty” Declines
Paul A. Jargowsky found that “concentrated poverty” (people living in high-poverty neighborhoods) declined by 24 percent in the United States in 1990’s. In contrast, he says that from 1970 to 1990 poverty became more concentrated spatially. Based on the trend of prior decades, one might have reasonably assumed that high-poverty neighborhoods were an unavoidable aspect .. MORE
Economics of Education
The Academic Job Market
Two recent essays discuss the academic job market. Laura Vanderkam argues that students with good academic skills over-estimate their chances of landing a good job with a Ph.D. Like actors, however, humanities graduate students have to realize that — except for a few jackpot cases — there is no market for their product. When you .. MORE
Economic Growth
Three P’s of Growth
Steven Kirchner points to a speech by Australian Secretary to the Treasury Ken Henry on the topic of the determinants of growth. Henry decomposes output per capita into output per hour worked times hours worked per working-age person times the proportion of working-aged people in the population. He calls these factors the three P’s: productivity, .. MORE
Cost-benefit Analysis
Government Performance Effectiveness
Ted Balaker links to this analysis by the Office of Management and Budget of the effectiveness of government programs. Demanding that programs prove results in order to earn financial support, however obvious and sensible, marks a dramatic departure from past practice. No one has asked about the extent to which Elderly Housing Grants help the .. MORE
Institutional Economics
Institutional Survival
Henry Farrell argues against the view that institutions must reduce transactions costs in order to survive. there are an awful lot of institutional arrangements out there that demonstrably have very little to do with efficiency or transaction cost reduction, and an awful lot to do with furthering the interests of social elites. Just look at .. MORE
Regulation and Subsidies
Regulatory Tariffs Vs. Quotas
Reason Foundation’s Ted Balaker sees a libertarian silver lining in the cloud of state government budget deficits. After all, some states are now eyeing legalized gambling as a new cash cow. Maybe the next step will be to legalize – and tax – marijuana. It is a well-known proposition in international trade that trade quotas .. MORE
Public Choice Theory
Government Overgrowth, II
Was the stock market boom good for New York? Not according to Megan McArdle, otherwise known as ‘Jane Galt’. in an era of prosperity, city spending grew an astonishing $5.6 billion, or 25% – right up to the capacity of record capital gains income and Wall Street bonuses to sustain it. Now that the money .. MORE
Optimum Currency Areas
Economic Policy Diversity
In an essay on diversity in economic policy, I propose dividing the United States. By splitting into the virtual regions of Miltonia and Hillaria, we could run a “natural experiment” to see how things work. Perhaps after ten or twenty years, we Miltonians will come around to the point of view that “It takes a .. MORE
Economic Growth
Growth and Demographics
Steven Nyce and Syl Schieber analyze the likelihood that the size of the labor force will start to decline in many developed countries. It now appears that many of the developed economies will experience periods in which the numbers of non-elderly will decline. Moreover, in some cases, these declines will exceed the rates of labor .. MORE
Fiscal Policy
Temporary Dividend Tax Cut?
Jacob Levy criticizes the Senate’s proposed temporary tax cut on dividends. The arguments in favor of repealing the dividend tax have to do with removing distortions from the capital markets and from the incentives faced by corporations, and with improving tranparency in corporate accounting. Removing distortions from the capital markets is a good thing for .. MORE
Behavioral Economics
Comment of the Week, 2003-05-16
On the topic of revealed preference, David Thomson writes, Human beings are neither existentially [n]or psychologically able to endure lives of everyday indolence and unrelenting pleasure seeking. That sounds like the introductory sentence for a thesis in behavioral economics. For conventional economists, the question is whether or not you can treat people as if they .. MORE
Economics of Health Care
Economics of Obesity
Obesity is getting increased attention from health policy experts and economists. Roger Bate writes, My analysis is preliminary and in any case proves nothing, but it is indicative that fast food has little to do with overall obesity rates. If fast food were the main cause of weight gain, we would expect to see the .. MORE
Behavioral Economics
Surveys Vs. Revealed Preference, III
I take a skeptical view of surveys in this essay. From the standpoint of revealed preference, the [survey evidence] that income over $20,000 does not raise happiness simply falls apart. Observing the fact that even people with very high incomes choose to work, an economist would infer that for most people the point at which .. MORE
Optimum Currency Areas
Should Britain Join the Euro?
This is a fierce debate. The partisans in favor write, By removing the barriers of separate currencies, the creation of the euro has led to a rapid increase in cross-border trade in the euro-zone. Germany’s trade with the EU has leapt from 27% of national output in 1998 to 32% in 2001. France’s trade with .. MORE
Trade Barriers
21st Century Trade Barriers
Two stories that have been discussed recently about new variations of protectionism. One concerns the European Union’s ban on genetically modified food. This issue will be taken to the World Trade Organization by the U.S., along with other countries, including Argentina. Some 23 percent of Argentina’s farm land is sown with genetically modified seeds and .. MORE
Public Choice Theory
Government Overgrowth
One fascinating phenomenon is that when government grows so large and its interest groups so powerful, it threatens to crowd out the private sector. This is a concern in Israel, where a new economic plan that tries to limit government spending is meeting stiff opposition from the trade union movement, the Histadrut. Another place where .. MORE
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