Paul Krugman writes a detailed (layman’s) critique on how and why economists messed up: Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems. More important was the profession’s blindness to the very possibility of catastrophic failures in a market economy. During the golden years, financial economists [...]
Over the last few classes, I’ve talked about several things in the blogosphere and/or other media. I’m going to link to them in this post. Hopefully, I’ll cover everything – if not, let me know in the comments. The pros and cons of a weakening dollar were discussed in the following (July 3rd) Marketplace podcast: [...]
Last week’s Economist talks about the virtues of using randomized trials to answer macroeconomic policy questions. Randomized trials are similar to drug trials, where you select a random group of people to test an idea along with a control group on which you test something else. They talk about an experiment done in western Kenya, [...]
by Elena Foshay Starbucks Coffee, one of the success stories of the booming economy and now global symbols of prosperity, is suffering. John Borden of Eyes Not Sold reports that over the last twelve months Starbucks stock has gone down 41% while the S&P 500 is down 3%. Howard Schulz, now beginning his second term [...]
by Beau Rowland In the international furor surrounding the 2008 Olympics in China, I find myself in the rare position of agreeing with Bush’s steady line of support for Beijing. The reasons, I think, are in part economic. Here’s how I see it: In a recent article in The Economist, the debate over what is [...]
by Lillian Sun China is one the world’s largest manufactures and currently holds an important position within the global market. Through the past decade, China’s immense double digit GDP growth has caused it to become the role model for all developing countries. In most classes that I have taken on the development of China and [...]
by Mike Lowry In this critique of George Bush’s economic stimulus plan, economist Frank Shostak sets out to debunk the myths of the Keynesian philosophy. Specifically, he levels a common-sense attack at the concept of the “spending multiplier” which the success of the stimulus package is predicated on. Recall that the spending multiplier is the [...]
by Breana Pennington It was noted in lecture that we shouldn’t care about the costs of occasional, expected inflation because the negative effects of an increase in the overall price level of the economy are subtle. However, we should care about sustained, long-term inflation because one important effect can be an increase in unemployment. This [...]
EconTalk is a weekly podcast in which Prof. Russ Roberts of George Mason University interviews various economists on a myriad of issues. A couple of weeks ago, he had Prof. Tyler Cowen also from GMU, and the co-author of Marginal Revolution – one of the more popular blogs of the econo-blogosphere. They were talking about [...]
In an introduction to monetary policy, the San Francisco Fed has a neat FAQs-style description on its website. For instance, in answering the question “What are open market operations?” they say (amongst other things): Suppose the Fed wants the funds rate to fall. To do this, it buys government securities from a bank. The Fed [...]