Plain Sense Economics

In my summer Principles of Macroeconomics class we’ve been discussing the reasons why China has surged to be such a strong economic power.
In an article in The New York Times, Turkey is described as another surprising country showing remarkable growth.
Today, Turkey is a fast-rising economic power, with a core of internationally competitive companies [...]

Jasen Hartford, a friend and past student, recently asked me,
As we all know, the European Union has recently been under the lime light with their budget deficit problem – causing a lot of anxiety for investors in the U.S. I’m curious if there’s a reason why the even greater deficit in [...]

N. Gregory Mankiw posted a semi-tongue-in-cheek note on his blog suggesting that we consider a system where email senders pay to send a message. One of Mankiw’s readers opined…
I think an excellent Pigouvian tax would be a tax on emails. Many emails involve a negative externality (I don’t really want to receive [...]

Arthur Laffer is credited with the eponymous theory that a decrease in tax rates can lead to an increase in tax revenues. Even if the original theory may have been scribbled on a napkin, it still holds sway with the supply side contingent. The simplified explanation is that by reducing tax rates, income earning individuals [...]

At about the 6th or 7th week of my Principles of Macroeconomics class we have a kind of broad (though not deep) understanding of how the economy works, how we measure it, and some of the things government does to influence it. We’ve learned about fiscal policy and monetary policy; we have a rough idea [...]

With a hat tip to Economix for this reference, economics staff at the Federal Reserve District Bank in Dallas have compared employment, unemployment and related measures in our current recession to those of earlier recessions and depressions. Here is an important, chilling graph from the report. One consolation is that later graphs show that the [...]

In my University Seminar class we are looking at the arguments, pro and con, on Oregon Measures 66 & 67. For out of state readers these measures raise taxes slightly – for higher end income earners (families with incomes over $250,000 and individuals with incomes over $125,000) and corporations (raising the minimum corporate income tax [...]

There has been a rash of speeches, articles, and op-ed pieces exploring the origins of the housing bubble and trying to place the blame on the actions of the Federal Reserve. Some of these efforts are honorable – recognizing that we have a responsibility to understand what when wrong and how to avoid repeating those [...]

Cornell’s Robert Frank wrote today in The New York Times,
[...]there are really only three basic truths that policy makers need to know about deficits: First, it’s actually good to run them during deep economic downturns. Second, whether deficits are bad in the long run depends on how borrowed money is spent. And third, eliminating deficits [...]

Hat tip to U of Oregon prof, Mark Thoma, for pointing to this piece by Jeffrey Sachs in the Financial Times.
Obama Has Lost His Way on Jobs
The Obama administration’s stimulus policies are not well-targeted. The Republican alternatives are even worse. Both sides are missing the key fact: the US economy needs structural change that requires [...]