Plain Sense Economics

Growing up in Michigan, we called that carbonated beverage pop.

Slate published this article, “Sweet Surrender: Taxing soda to make you stop drinking it.” This is another example of using an excise tax to change consumer behavior. If one believes that there are negative externalities to the consumption of sugar-laden, artificially-flavored, carbonated water, then these taxes [...]

“If the Federal Reserve is printing all these billions and trillions of dollars, won’t we suffer from inflation?”
I get asked this question a lot lately. First, despite the inference of the video provided by the Bureau and Engraving and Printing (see below), the Fed has not been running the money printing presses for extra shifts [...]

Common goods are non-exclusive (it is hard to prevent anyone from consuming them – can’t sell tickets) and they are rival (consumption reduces their number). The economic parable, “The Tragedy of the Commons” highlights the policy problems with managing common goods.
From the April 9 edition of The New York Times, comes a report of a [...]

This report on NBC News tonight highlighted the impact of a recent increase in Federal taxes on cigarettes and chewing tobacco.

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The report mentions an estimate that a 10% rise in cigarette prices results in a 7% drop in smoking among youth and a 4% [...]

As David Leonhardt, of The New York Times, acknowledges, it is sometimes uncomfortable to draw comparisons with economic policies of the past. From his article on April 1.
Every so often, history serves up an analogy that’s uncomfortable, a little distracting and yet still very relevant.

In the summer of 1933, just as they will do on [...]

In the March 30 edition of The New Yorker, David Owen makes a good point about the relationship between the economy and our environmental scorecard:
[T]he world’s principal source of man-made greenhouse gases has always been prosperity. The recession makes that relationship easy to see: shuttered factories don’t spew carbon dioxide; the unemployed drive fewer miles [...]