Be careful when reading headlines of economic or financial news that use superlatives. The news often it isn’t as earthshaking as the headline suggests. Consider the following two headlines “Euro breaks all-time high against dollar” and “Euro/dollar exchange rate same…
Trade deficit lures foreign investment
What came first, the rising U.S. trade deficit or the soaring amount of foreign investment in the United States? It’s a classic chicken-and-egg question. And it’s timely because recent changes in the value of the dollar alter the incentives for…
Zoning can bring economic efficiency–and bigotry
Zoning is always troublesome for hard-core, free-market economists. There are a few true-blue libertarians in the discipline. They argue that government should not regulate who does what where. But most economists accept the argument that some level of zoning can…
Revealing “refund loans”
You can tell that a lending institution is trying to take advantage of borrowers when it refuses to tell them exactly what interest rate it is charging them. That is not any principle of economics but rather a practical observation…