EconLog Archive
Politics and Economics
Working for Change in Democratic Politics
Brother, can you paradigm, or spare a signature? In a recent post, blogger Janet Bufton writes: The second way toward lasting change is to do the persuasive work that would have brought them [the changes] about—or the best approximation that the people can bear—through democratic politics. This method does not save anyone from the problems .. MORE
Free Markets
Did Taylor Swift “Juice the Economy”?
It may seem obvious that Taylor Swift “juiced the economy” during her two-year Eras world tour (Hannah Miao, “Billions in Cocktails and Friendship Bracelets: How Taylor Swift Juiced the Economy,” Wall Street Journal, December 8, 2024). But it is not. For example, the claim cannot be evaluated by simply counting how much money her fans .. MORE
Efficient Markets Hypothesis
NGDP Guardrails: Do the Right Thing
Tyler Cowen recent asked o1 Pro this question: What is the biggest problem with the idea of the Fed subsidizing an NGDP futures market, as economist Scott Sumner has proposed? Feel free to give an answer relying on theoretical macroeconomics, agency problems, finance theory, and the like. Here’s part of the response: One of the .. MORE
Cross-country Comparisons
My Weekly Reading for December 15, 2024
Friday Feature: SEA Homeschoolers by Colleen Hroncich, Cato at Liberty, December 6, 2024. Excerpt: Conservative Christians probably aren’t generally seen as trailblazers, but they were at the forefront of homeschooling in the 1960s and 1970s. So it’s not surprising that curricula and resources for homeschoolers are often Christian in nature. When Blair Lee, a college .. MORE
Economics and Culture
What Stray Cats Taught Me About Spontaneous Order
My wife and I recently returned from our first trip to Greece. Between a busy schedule of espresso, sailing, hiking, pilgrimages to historical sights, and just generally eating our way across the Hellenistic Empire, I noticed one thing in particular: cats. Cats everywhere. In the street, on our feet, in the bar, on the car. .. MORE
Regulation and Subsidies
Subsidies and Waste
It is possible to spend $100,000 on a luxury car. Most people don’t do so, and not just because they cannot “afford” one. Even among Americans with over $100,000 in wealth, only a tiny fraction would choose to spend $100,000 on a luxury car. You can also spend $35,000 on a luxury car, something like .. MORE
Economic History
The Fed’s Financial Chicanery: No End to the Money Printing
Here’s a multiple-choice question I’ll be placing on an upcoming quiz in my monetary economics class: The Federal Reserve is like which of the following: A failed 1980s Savings & Loan 2023 failure Silicon Valley Bank 2001 mega bankruptcy Enron All of the above Answer: All of the above. The Fed compares to S&Ls because .. MORE
Adam Smith
The Other Kind of Romance in Politics
Public choice is often called by the shorthand “politics without romance.” In the Concise Encyclopedia of Economics entry, William Shughart summarizes this romance to overcome as, The wishful thinking…that participants in the political sphere aspire to promote the common good. In the conventional “public interest” view, public officials are portrayed as benevolent “public servants” who .. MORE
Institutional Economics
What Is Kakistocracy?
Every year in December, The Economist finds a “word of the year” that summarizes a major event or trend and has gained popularity in its wake. It is useful to know that the magazine has been opposed to populism as it rose in the United States and elsewhere in the world but, I would say, .. MORE
Macroeconomics
Paul Krugman retires from the NYT
Over the years, I’ve done a number of posts reacting to Paul Krugman‘s columns and blog posts. Now that Krugman is retiring from his NYT column (but not from academia), I thought I’d share a few observations about his career as a pundit. What made Krugman such an influential economic pundit, perhaps the most influential? .. MORE
Cryptocurrency
Crypto, Investment, and Intrinsic Value
Crypto doesn’t have intrinsic value; neither does paper money and neither does gold. A friend who regularly reads both the Financial Times and my posts on EconLog and on my Substack sent me the following email: I was talking with a friend who is a wealth manager at JP Morgan, and he is advising .. MORE
Economic Education
Consumer Purchasing Price Theory: Cutsinger’s Solution
[Editor’s note: We’re bringing back price theory with our series on Price Theory problems with Professor Bryan Cutsinger. You can view the previous problem and Cutsinger’s solution here and here. Share your proposed solutions in the Comments. Professor Cutsinger will be present in the comments for the next two weeks, and we’ll again post his proposed solution shortly thereafter. .. MORE
Politics and Economics
How valuable is just asking people?
A story in three acts, dear reader, that you may have seen in various forms before: Act one: An activist or TV talking head declares that the economy is failing, particular for those who are struggling most, and economic conditions are terrible. Act two: An economist interjects that actually, the economy is doing quite well, .. MORE
Finance
How to Get Rich Slowly
To get rich slowly, hang on to that beat-up old sedan. In an EconLog post on December 7, Giorgio Castiglia surprised me with the following story: At a 10-year high-school reunion, a middle school math teacher arrives in a beat-up old sedan and an old buddy of his pulls up in a shiny new convertible .. MORE
Cross-country Comparisons
One Year of Milei: Stabilization, A Balanced Budget and Deregulation in Argentina
Today marks exactly one year since Javier Milei rose to the presidency in Argentina. Expectations were high among libertarians, as this was the first time a self-described ‘anarcho-capitalist’ was elected to the highest office anywhere in the world. During his first year, Argentina has certainly experienced change. The country is no anarcho-capitalist paradise, but is .. MORE
Media Watch
Synecdoche, Bullets, and Politics
The following is not the most important aspect of the tragic murder of Brian Thompson, the CEO of UnitedHealthcare. But it does illustrate how using the correct words and being conscious of figures of speech help avoid confusion. Technically, a firearm cartridge is made of (1) a casing, which holds gunpowder and a primer to .. MORE
Monetary Policy
Gell-Mann Amnesia and AI
Tyler Cowen recently challenged us to try to stump an AI named “o1”: 1. o1 is a very good economist. Try to stump it if you can. I could not find o1, so I used ChatGPT 4.o mini. I hope someone will try the following question with an o1 and report the results in the .. MORE
Macroeconomics
The Monkey’s Paw and Interest Rates
A recent article in The Economist discussed what they assume is the president-elect’s view of interest rates: A more hawkish Fed may, in turn, invite the wrath of Mr Trump, who has insisted that, as president, he should have a say over interest rates. He will surely want to see steeper rate cuts now that .. MORE
Economics of Crime
My Weekly Reading and Viewing for December 8, 2024
Indiana Cops Seized Their Cash From a FedEx Hub. Prosecutors Just Agreed To Return It. by C.J. Ciaramella, Reason, December 3, 2024. Excerpts: Indiana prosecutors will return $42,000 in cash they seized from a California small business, several months after the owners filed a class action lawsuit alleging that law enforcement is exploiting a major FedEx shipping .. MORE
Adam Smith
Economics In Personal Decision Making
Two main reasons for studying economics are often given in textbooks and classes. First, it helps us understand the social world we live in and, secondly, it informs better public policy decisions. An example comes from Adam Smith in The Wealth of Nations. By understanding what makes a nation wealthy compared to others, we might .. MORE
Adam Smith
Does National Security Justify Trade Restrictions?
In a recent Defining Ideas article, “Why Trade Should Be Free,” I made the case for free trade. Although my way of stating it is slightly original, the case for free trade is one that many economists, including Adam Smith, have made. Free trade causes people in the free trade country to produce the .. MORE