• Freshwater or Saltwater?

    Dec 16 • Thinking Economically • 259 Views

    Smith or Keynes? Free market or government fine-tuning?
    If you are the latter, you can say you are a saltwater economist. A recent article from Paul Krugman (NY TIMES MAGAZINE; 9/06/09) characterizes the economists who reside along either coast as saltwater. By contrast, those near the Great Lakes (University of Chicago), near freshwater, can be called the classical/Adam Smith crowd.

    However, not everyone agrees:

    http://seekingalpha.com/article/160300-thoughts-on-freshwater-and-saltwater-economists

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  • Are We All Keynesians?

    Dec 15 • Thinking Economically • 256 Views

    According to the Yardeni newsletter, in 1965, A Time Magazine cover story was titled, “The Economy, We Are All Keynesians Now”. Even Milton Friedman was quoted as saying, “We are all Keynesians now.” (which he later corrected as having been, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian.”) Lyndon Johnson’s Budget Director, Charles L. Schultze said, “We can’t prevent every little wiggle in the economic cycle, but we now can prevent a major slide.

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  • Crowding Out or In?

    Dec 9 • Thinking Economically • 724 Views

    In their textbooks, economists typically refer to

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  • Ranking China

    Dec 8 • Thinking Economically • 249 Views

    Look at your dining table or your clothing and you might see “Made in China”. Thinking of all they are producing, a market economy might come to mind. Next, though, take a look at the Index of Economic Freedom at:
    http://www.heritage.org/Index/Ranking.aspx
    China is ranked lower than some might expect. The link that explains why they fared so poorly takes you to their lack of property rights and investment freedom. Interestingly, they score higher on monetary and fiscal freedom. Also (and predictably), they have relatively more “trading freedoms”.

    Econ Connection
    What to produce, how to produce (land, labor, capital), and who receives the returns are the three basic questions all economies answer.

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  • More on the Tragedy of the Commons

    Dec 7 • Thinking Economically • 338 Views

    Good discussion of the Tragedy of the Commons in three podcasts:
    1. 2009 Nobel Laureate, Elinor Ostrom, discusses her ideas in the 10/23 Planet Money podcast. In a 15 minute interview, she uses her department’s messy refrigerator as one of her examples.
    http://www.npr.org/blogs/money/2009/10/podcast_elinor_ostrom_checks_i.html

    2. An 11/30 Econtalk discussion between Russ Roberts and Pete Boette further looks at Ostrom. One interesting question from their private/public ownership talk: Can a lighthouse be privately owned? But then, why would the owners leave the lights on??? They have an answer.
    http://www.econtalk.org/archives/2009/11/boettke_on_elin.html

    3. Then, finally, in an 11/02 Econtalk interview, Russ Roberts and Michael Heller discuss the “Tragedy of the Anticommons”–where private ownership of such publicly held resources as “airwaves” can lead to less productivity because there are too many owners. (http://www.econtalk.org/archives/2009/11/heller_on_gridl.html)

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