The headline had a dramatic tone — “Economy Hurting Iraq More Than Violence” — but it is probably right in a simplistic way. The underlying story illustrates the immensity of the “nation-building” task the United States faces in Iraq, an…
Category: Other
Arab nations pose riddles for economists
A few weeks ago, when the interim Iraqi government started buying back weapons in the Baghdad neighborhood of Sadr City, the Financial Times and other papers reported that weapons began flowing into that district from elsewhere in the country. Community…
Fiscal policy will stay course
Voters disappointed by the election outcome may seek consolation in the work of Edward Prescott, the 2004 Nobel laureate in economics and former longtime University of Minnesota professor. One of the topics Prescott focused on was the importance of credibility…
Opportunity costs surface in election
Students easily understand opportunity cost. Taking a college course means giving something up. Spending $586 on tuition and $119 on a textbook to take my fall course means giving up something else — clothes, entertainment, recreation or even food. Even…
The price of money
There is little debate among economists that when the government borrows to finance a deficit, interest rates rise and private investment declines. It ain’t fair. Astronomers don’t get letters arguing that the sun really does revolve around the Earth. Biologists…
Government’s interest in your flu shot
The uproar over the flu vaccine shortage raises interesting questions about how our society allocates resources for such important goods. Before examining government vaccine policies, however, think about human behavior related to vaccinations. Flu is serious. Even when vaccine supplies…
Without draft military needs more pay
Few election campaigns have featured as many silly charges and countercharges between the candidates as the current one. The recent salvos over who is more likely to reinstitute the military draft are particularly silly. While there are some good arguments…
Worldviews split lawyers, economists
Some 45 years ago, C.P. Snow wrote about “the two cultures,” arguing that scientists and literary folk knew little about each other’s fields and that communication between the two groups was increasingly difficult. Perhaps Snow’s idea also applies to the…
Bush’s deficits worse than Kerry’s
Editor’s note: This is the second of two columns on the presidential candidates. The first column is Candidates failing Econ 101. Neither President Bush nor Sen. John Kerry inspires much enthusiasm among economists. But, as noted in last week’s column,…
How does economic theory handle effects of irrationality and ignorance?
Editor’s note: this column was originally published on August 29, 1999. Just how rational and well-informed are human beings? What happens to economic theory if people are not always rational and often poorly informed? These questions are prompted by a…