Plain Sense Economics

We read/hear in the news media about changes to the U.S. trade deficit. This page from the Census Bureau shows that in the month of October, 2007 the trade deficit was $57.8 billion. That’s large in anyone’s book, but it is not ballooning as it has in earlier months. Two forces (at least) are at [...]

I generally grate my teeth when I bother to read the editorial columns in the Wall Street Journal. Today, one of them had a dose of plain sense. When speaking of the current congestion at major airport hubs, the writer suggested

Meantime, economics offers a better way to manage scarcity: Use prices to ration capacity at [...]

Tyler Cowan, who writes in the Marginal Revolution blog, contributed this piece in the November 18, 2008 of The Washington Post. He both defines and applies opportunity cost. Here’s an excerpt -
But all these figures don’t quite get at Iraq’s real cost. Indeed, we usually don’t even frame the question the right way. We’d [...]

Friedman is an accessible writer, and has spent many years in and around the Middle East and other parts of the world.
In this blog – he writes about how a gasoline tax, imposed just after 9/11, would have changed many things for the better.
It is a good read.

When economic times are tough, we often look to the government to help steer us into better conditions. When a real recession hits and unemployment grows sufficiently to be a topic of conversation and news articles, government (by which I mean here Congress and the President) can provide some palliative relief – treating the symptoms. [...]

Earlier we looked at the difficulty in voting for taxes and levies that will pay for a public good. In the case of the Ashland school levy, social and community values won the day. This post discusses the theory and definition behind public goods and common goods.
Public Goods…
… have three important characteristics:

They are a good [...]

In my principles of microeconomics class next week we will take up the idea of public goods. This week, however, the city of Ashland votes on a special levy to support activities in our local school district. This is too good an opportunity to pass up – to reflect on voting for public services. The [...]

Financial and business news over the last week has focused on the rapid departure of two CEOs – Stan O’Neal with Merrill-Lynch and Charles Prince with CitiGroup. Each was tarred with unexpectedly large losses in the investment activities of their respective organizations. In very broad terms these losses are in the billions of dollars.
In my [...]

When you hear or read about the Federal Reserve taking action to raise or lower interest rates, here’s what is going on.
The Federal Reserve Open Market Committee (FOMC) is made up of the seven governors of the Federal Reserve System plus the twelve presidents of the district Federal Reserve banks (5 of whom vote at [...]

Students who are taking macroeconomics are introduced to the Federal Reserve System and its dual role of regulating the banking industry and executing monetary policy. As chairman of the Board of Governors for the Federal Reserve Bank, Ben Bernanke becomes the visible point person of the Fed’s policy decisions. The New York Times has a [...]