Some economic interactions are like snapping a whip. A brisk shake at one end translates into an explosive snap at the other. The effects of higher fuel prices on prices of old cards and airlines demonstrate this. Relatively small changes…
Category: Other
Econ 101 doesn’t explain office glut, pricey steak
Real economies don’t always work the way they are depicted in Microeconomics 101 at the local college. That statement is not a criticism of the discipline. Introductory courses in most subjects have to leave details for subsequent ones. But people…
Here’s how not to run a country
Some wages say that, like the state of Mississippi, Bolivia exists to make others look good by comparison. Tragically, poor Bolivians bear every day the cumulative consequences of four centuries of bad government. Unfortunately, votes they cast this past week…
Fed action and reaction
Substantial lengths of time often pass between when an economic policy change occurs and that change actually affects the economy. Unfortunately, such lags are not widely understood. This was sharply evident one morning this week. I received an e-mail from…
AIDS deaths are economic, human tragedy
When a significant proportion of a population dies in some disastrous events–such as the ongoing AIDS epidemic–the economic effects depend greatly on which age groups are most affected. AIDS deaths constitute an economic as well as a human tragedy because…
The economy’s performance and potential
At parent-teacher conferences, did teachers ever tell your parents that your academic performance was well above your potential? Probably not! But many of us remember them being told that despite good grades we were not “performing up to potential.” The…
Like scissors, issues have two sides
When asked whether supply or demand was more important, the great British economist Alfred Marshall (1842-1924) responded by comparing them to the blades of a scissors. “Which blade cuts the cloth, the upper or the lower?” he asked. U.S. policy…
Reserves, recruits, returns
The decision to suddenly stick to the letter of a contract can cause a great deal of confusion if the parties have previously operated on a looser interpretation of the agreement. The Defense Department’s decision to force some 5,600 members…
Our diversity has developed into economic asset
As we celebrate our independence, it is good to reflect on the fact that while we are ethnically and religiously diverse, we do not suffer the economic damage that can result from sectarian strife. Differences exist. The cemetery where my…
Nowhere to go but up
The Fed did not surprise anyone Wednesday when it finally acted to slow the growth of the money supply. While the one-quarter percentage point change in the Fed funds target rate, to 1.25 percent, was modest and entirely expected, it…