Markets
Question: Should we rely on the free market to do "the right thing" or is government intervention inevitably necessary?
Historically the pendulum has swung back and forth between free market, laissez faire commitments and heavier government control over markets. It is probably fair to characterize the late 1990s and early 2000s as a time when free market supporters had the upper hand. Now there seems to be a backlash. Where should we, as an economic society, end up on this pendulum swing?
Opinions
- Paul Krugman - "The Market Mystique"
- Greg Mankiw - "Teaching Amidst a Crisis"
- Greg Mankiw reflecting on Jay Leno
- Tyler Cowen - "Does the Free Market Erode Moral Character?"
- Brad DeLong - (kind of blunt)
- Doug Gentry - Demand and Supply (3 blog posts)
Economic Concepts We'll Cover
- Demand - Supply - Equilibrium
- Adam Smith's Invisible Hand
- Deadweight Loss (due to Government Intervention)
- Price ceilings and price floors
Some Online Markets
- eBay (of course)
- Intrade - excellent example of the wisdom of mobs, and the importance of financial incentives. See the highlighted markets on the home page. Nothing on the NCAA Basketball Championship, but if you put American Idol in the search box you can see the various predictions for the 2009 winner.
- Have your favorite market? Send a note to Doug to make this list longer and stronger.
YouTube Tutorial on Shifts in Demand and Supply