Location, location, location. Johan von Thunen did not coin that adage on what determines real estate values. But von Thunen’s explanations of the relationships between location, transport costs and product prices remain relevant 180 years after he wrote them. They…
Category: Other
Signs of the real economy are everywhere
The odds are 2008 will be an interesting year for the U.S. economy. That is “interesting” as in “hang onto your hat!” There is plenty of bad news about falling house prices, increasing mortgage defaults, lower consumer confidence and soaring…
Only few economists get a voice
Wall Street economists, who often have their own financial axes to grind, tend to get a disproportionate amount of media attention. But they do not necessarily represent the discipline as a whole and can skew public perceptions of what economists…
Helicopter Ben had it right
Memo to Bernanke: Call the Peruvian Air Force. See if their Russian-built Mil Mi-6 “Hook” helicopters, long the biggest in the world, are available. The chopper you are using now to scatter money obviously isn’t big enough! History is rich…
Price hike blame game hard to play
In economics, predicting which direction prices will move in response to changing market conditions is relatively easy. Separating out how much of a price change stems from each of several relevant factors is more difficult. Consumer food prices are rising…
China manipulates itself into a corner
China manipulates the value of its currency compared to those of other nations. It does this to keep its exports cheap to buyers and to keep other nations’ exports expensive for Chinese buyers. China does this, however, from a position…
Higher prices spur oil, copper producers into action
Few consumers like high oil prices. Do-it-yourselfers like me wish copper pipe and fittings had not gotten so expensive. But such high prices do illustrate how markets work. Prices in an economy function to transmit information and motivate actions. High…
Push for liquidity neglects history
The Federal Reserve’s policy-making Open Market Committee meets Tuesday for the last time in 2007. It faces harder tradeoffs than any time in many years. Whatever the FOMC decides, it will be years before the success or failure of its…
Mortgage plan may be least bad option
The general outline of a government-fostered plan to reduce defaults on adjustable-rate mortgages is emerging. Lenders would agree to freeze interest rates at current levels for those borrowers who have met loan payments to date and who can continue to…
“Greater criminal” gets loose
Punishment for theft often varies inversely with the amount stolen. When English landowners evicted peasants and deprived them of their customary rights, someone noted: They hang the man and flog the woman/Who steals the goose from off the Common;/But let…