Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)
October 16
The Increased Role of the Minimum Wage
The increase in the minimum wage means that it now covers a larger fraction of workers.
Textbook References:
Pages 117-119 “The Minimum Wage”Page 428 “Minimum Wage Laws”
Pages 606-608 “Minimum Wage Laws”
August 24
Jeff Miron on Capitalism
Jeff Miron discusses three common misconceptions about capitalism.
Textbook References:
Pages 7-9 “Principle 4: People Respond to Incentives”Pages10-11 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”
Pages 13-14 “Principle 8: A Country's Standard of Living Depends on Its Ability to Produce Goods and Services”
Chapter 6 “Supply, Demand, and Government Policies”
July 25
A Question About Tax Incidence
No part of a temporary reduction in aviation taxes is being passed on to consumers. This implies that in the very short run, the supply of airline seats is perfectly inelastic.
Textbook References:
Pages 125-127 “Elasticity and Tax Incidence”May 6
The Inanity of Rent Control
An article describes how rent control and tenants' rights laws are harming renters in San Francisco.
Textbook References:
Pages 117-118 “Rent Control in the Short Run and the Long Run”April 21
Price Controls for Limo Rides
A short video demonstrates the harm caused by a price floor.
Textbook References:
Pages 8-10 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”Pages 118-121 “How Price Floors Affect Market Outcomes”
February 5
The Lucky Break of Rent Control
An article discusses the practice of making cash payments to get people in rent-controlled apartments to leave.
Textbook References:
Pages 114-118 “How Price Ceilings Affect Market Outcomes”Pages 217-218 “The Coase Theorem”
December 7
The Tax Deal
Mankiw comments on the tax deal between President Obama and Congressional Republicans. He is generally pleased, but notes a peculiarity of the cut in the payroll tax.
Textbook References:
Page 127 “Can Congress Distribute The Burden Of A Payroll Tax?”Pages 166-167 “The Deadweight Loss Debate”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
October 25
Pricing in Venezuela
A photograph explains the source of shortages in Venezuela.
Textbook References:
Pages 114-118 “How Price Ceilings Affect Market Outcomes”September 10
A Dastardly Clever Scheme
Some universities in New York City are buying rent-controlled apartment buildings. They then rent to faculty at the rent-controlled price, which allows them to reduce faculty wages.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 117-118 “Rent Control In The Short Run And The Long Run”
May 5
In Defense of Price Gouging
Should vendors of bottled water raise their prices when tap water is no longer clean enough to drink?
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 114-118 “How Price Ceilings Affect Market Outcomes”
April 5
Is "Unpaid" Below the Minimum Wage?
The U.S. Labor Department claims that unpaid internships violate minimum wage laws.
Textbook References:
Pages 119-121 “The Minimum Wage”Page 446 “Minimum Wage Laws”
Pages 627-629 “Minimum Wage Laws”
February 23
Financing Healthcare Reform
The most recent healthcare reform proposal does not include a tax on "Cadillac" health insurance and adds a tax on capital. It will not reduce demand for healthcare and will likely slow growth.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 125-127 “How Taxes on Buyers Affect Market Outcomes”
Page 560 “Saving and Investment”
Pages 586-587 “Policy 1: Saving Incentives”
Pages 587-589 “Policy 2: Investment Incentives”
February 22
How Not to Stop Healthcare Inflation
Price controls have not worked in the past, and are not likely to work on healthcare.
Textbook References:
Pages 114-123 “Controls on Prices”January 16
Healthcare Reform Debate
There is a link to a video and the Powerpoint slides of a symposium on healthcare reform. The U.S. and Canadian systems are discussed.
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 114-123 “Controls on Prices”
Pages 246-248 “The Fiscal Challenge Ahead”
Pages 271-273 “Production and Costs”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”