The move to write off debt that very poor countries owe to other governments and to institutions such as the World Bank is a good one. It will help the nations affected, but is far from a cure-all for their…
Category: Other
Candidates failing Econ 101
Editor’s note: This is the first of two columns on the presidential candidates. The second column is Bush’s deficit worse than Kerry’s. My student was naive. “Whom will economists vote for, Bush or Kerry?” she asked. I replied that, like…
What’s true for one isn’t true for all
Scottish poet Robert Burns warned us that the best laid plans of economists and society often can go awry. When economic policies or institutions go awry, the problem often is a “fallacy of composition” in some underlying thinking. It can…
Costly oil tightens budget
What does $50 a barrel oil mean for the U.S. economy? It may sound flip, but one answer is that $50 oil won’t make much difference compared to $48 oil. The point is that while symbolic milestones — whether a…
Bankruptcy fairness is balancing act
US Airways’ Chapter 11 encore prompts re-examination of exactly what our society wants from bankruptcy laws. Societies clearly are better off when there is some legal provision for the discharge of unpayable debt. When such provisions, however, allow firms to…
It’s hard to improve on a classic
On Aug. 23, most people ignored news of the 50th anniversary of the first flight of the C-130 Hercules airplane. Yet those of us who have flown in or jumped out of this wonderful aircraft read the news with a…
Money supply is root of all inflation
Economist Milton Friedman’s assertion that “inflation is always and everywhere a monetary phenomenon” is good to remember as the United States faces increasing prices for some goods and much debate about how sharply the Federal Reserve should restrict money-supply growth.…
Media muddle U.S. balance of payments accounts
It is enough to drive economists nuts. They strive to teach students simple definitions. Then the media use the terms erroneously and undo everything. This happens frequently, especially whenever the U.S. Commerce Department releases quarterly tabulations of the nation’s balance…
Economists would likely scoff at deficit
Sadly, David Ricardo, the greatest economist of all time, died nearly two centuries ago. It would be fascinating to get his take on U.S. fiscal policy and debate in the 2004 presidential campaign. In particular, I’d relish his comments on…
Can “social capital” improve the community?
Does “social capital” mean anything, and why do economists shun the idea? The degree to which citizens are engaged in their communities affects social indicators such as crime rates and student performance. It also is important in determining a society’s…