I have decided to switch blogging sites. Livejournal has some annoying features and is not accessible from my work. My new address is: http://azmytheconomics.wordpress.com/

"There is only one social science and we are its practitioners” - George Stigler ( Read more... )

"You probably could make a list of your favorite economists, and I wouldn't know who most of them were ;-)" - Brian ( Read more... )

What is something worth? Can we determine objective value from any observable facts. GDP measures P x Q, where P is the price of a good and Q is the number of goods. We know each of those transactions makes both parties better off, or otherwise they would not voluntarily trade. Is there any way to know exactly how much better off? Unfortunately ( Read more... )

It is occasionally asserted that World War II got the U.S. out of the Great Depression. Measured GDP went up dramatically and unemployment dropped. However, what does that even mean? Unemployment dropped because of the draft. The unemployed were forced into uniform and shipped into miserable deadly conditions on the other side of the globe. ( Read more... )

There are two categories of things required for economic production:

1. Natural Resources
2. Human Effort

Both categories are broad and varied, but highlighting them simplifies thought on a few key issues. Capital is not a substitute for human effort, it is a type of effort. Instead of producing goods directly at high effort per good produced, ( Read more... )

"What do you mean you can't increase aggregate demand? You run out of paper? Ink? You scared of inflation?" - Nick Rowe

The recent crysis has spawned a new school of economics (that didn't even realize it was new) called quasi-monetarism. It's main advocates are Scott Sumner, Bill Woolsey and Nick RoweThe first assumption is that there is some ( Read more... )

The Alchian-Allen Theorem is a lesser known but still very interesting economic theory. It states that when a fixed cost is added to substitute goods, the more expensive one becomes relatively less expensive, and so people are likely to increase consumption of the higher quality good. I think the best way to illustrate the theorem is with ( Read more... )

Prerequisite: Banking

With Ron Paul's popularity increasing and the Tea Party on the rise, the gold standard is entering the public mind for the first time since the breakdown of the Bretton Woods system in 1971. It might be possible to have a gold standard under free banking (although I believe it would not be chosen as the backing under a ( Read more... )

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing" The Other ColbertIn order to gain access to resources, someone has two options: make, take or trade. They can make it for themselves, make something someone else values and trade for it, or take ( Read more... )