Plain Sense Economics

In honor of the first week in our Healthcare Economics class, and the beginning of a 6 week session on healthcare via OLLI, here is an interesting report from The New York Times.
National health spending rose a slight 3.9 percent in 2010, as Americans delayed hospital care, doctor’s visits and prescription drug purchases for the [...]

This is a time of the year when I meet new people or get reacquainted with old friends, and once we run out of the usual “status update” conversation, someone often asks about the economy and the current crisis about the debt ceiling. I’m going to break a self-imposed guideline for this blog, and actually [...]

The U.S. has a temporary reprieve on the debt ceiling limit – tax revenues have come in higher than expected in the early part of the year, reducing the needed pace of borrowing by the U.S. government. While this has pushed the deadline for Congressional action back by a month or more, the rhetoric in [...]

Freidrich Hayek and the Austrian school of economic policy argue for a laissez faire approach to the economy – emphasizing individual actions and criticizing government intervention. John Maynard Keynes acknowledged that economies could, over time, correct themselves, but argued that government had a responsibility to intervene and stimulate demand when the economy is in a [...]

James Surowiecki writes in The New Yorker that a combination of thoughtful, but less visible stimulus decisions and some less effective decisions made it hard for the American people to believe the 2009 fiscal stimulus worked.
[The] Washington stimulus has become the policy that dare not speak its name. This wouldn’t be surprising if we [...]

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 [...]

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 [...]

I’ve heard of lipstick sales being counter-cyclical (more sales when times are tough), but Gregory Mankiw’s blog posted a link to this item on MSN Money.
The central quote…
In fact, right now men’s underwear sales suggest that things have bottomed but not started to recover.
I dare you not to read more.

State and local governments have a particularly hard time during economic downturns. The Wall Street Journal, in this article on June 3 reminds us how state tax revenues decline quickly and recover slowly during recessions. This graphic from the article shows that it can take as long as five years for revenues to reach pre-recession [...]

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 [...]