Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)
A Nice Example of Technological Progress
A short video about manufacturing potato chips illustrates the relationship between technological progress and rising productivity.
Textbook References:
Pages 536-540 “Productivity: Its Role and Determinants”Where is economics going?
Prominent young economists discuss the future of their discipline. Growth and behavioral economics figure prominently.
Textbook References:
Pages 480-485 “Behavioral Economics”Pages 540-552 “Economic Growth and Public Policy”
Correlation of the Day
A graph shows the correlation between math test scores and economic growth around the world.
Textbook References:
Pages 543-544 “Education”Monitoring the So-called Recovery
A graph from the Bureau of Labor Statistics shows a sharp decline in the U.S. employment-to-population ratio since 2008.
Textbook References:
Pages 594-598 “How Is Unemployment Measured?”Pages 745-748 “The Recession of 2008-2009”
March 22
The Economics of the Hunger Games
Matthew Yglesias explains how the fictional economy from The Hunger Games resembles real ones.
Textbook References:
Pages 550-551 “What Makes a Nation Rich?”March 20
Free Bikes and Girls' Education
India's poorest state gives bicycles to girls who stay in school. Two economists discuss how to measure its effectiveness.
Textbook References:
Pages 7-9 “Principle 4: People Respond to Incentives”Pages 22-29 “The Economist as Scientist”
Pages 543-544 “Education”
Transitioning from Communism
Andrei Shleifer discusses seven lessons from the experiences of countries transitioning from socialism to some form of capitalism.
Textbook References:
Chapter 25 “Production and Growth”December 18
Is Modern Capitalism Sustainable?
Kenneth Rogoff agues that modern capitalism will continue to evolve and there are no viable alternative systems.
Textbook References:
Pages 10-11 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”Pages 532-536 “Economic Growth Around the World”
Coffee and the Age of Reason
Steven Johnson suggests that the switch to drinking coffee and tea instead of alcohol helped bring about the Age of Reason.
Textbook References:
Pages 536-540 “Productivity: Its Role and Determinants”October 14
Even leftists believe in property rights
A photo taken at an "Occupy" protest displays a bit of irony.
Textbook References:
Pages 546-547 “Property Rights and Political Stability”August 27
Auctioning Public Parking Spaces
A new iPhone app has created a market linking people looking for a parking space to people leaving a parking space.
Textbook References:
Pages 10-11 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”Page 538 “Technological Knowledge”
August 26
An Animated 4-Minute History of Econ
An artist blends economic history and the history of economic thought in a time-lapse video.
Textbook References:
Pages 532-536 “Economic Growth around the World”July 14
Reinhart and Rogoff on the Debt Problem
Carmen Reinhart and Kenneth Rogoff argue that public debt above 90 percent of GDP is associated with slower growth.
Textbook References:
Page 552 “The Importance of Long-Run Growth”Pages 570-572 “The History of U.S. Government Debt”
June 27
The Rate of Return on Human Capital
The financial return on a college education far exceeds that on stocks or real estate.
Textbook References:
Pages 398-400 “Human Capital”Pages 543-544 “Education”
June 12
A Look at QE2
John Cochrane argues that the quantitative easing by the Fed will not have much effect on the economy.
Textbook References:
Pages 540-552 “Economic Growth and Public Policy”Pages 758-767 “How Monetary Policy Influences Aggregate Demand”
June 11
How to Grow the Economy
Bruce Bartlett reminds us that saving and investment, education, infrastructure, and technological advancement ultimately drive growth.
Textbook References:
Pages 238-240 “The Fiscal Challenge Ahead”Pages 540-552 “Economic Growth and Public Policy”
Pages 568-572 “Policy 3: Government Budget Deficits and Surpluses”
May 31
How to Fix the Long-Term Fiscal Problem
Six think tanks offer their solutions to the long-term fiscal crisis faced by the U.S.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 560-572 “Economic Growth and Public Policy”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 842-843 “Dealing with Deficits”
May 13
Evaluating the ARRA
Tom Conley and Bill Dupor argue that the recent fiscal stimulus (the American Recovery and Reinvestment Act) actually destroyed more jobs than it saved.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 560-572 “Economic Growth and Public Policy”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
April 27
Height Over Time
People are much taller than they used to be. A new book attributes it to technological advances that improved nutrition, sanitation, and medicine.
Textbook References:
Pages 550-554 “Economic Growth Around The World”Pages 565-566 “Health and Nutrition”
Page 632 “Worker Health”
April 25
The World's Poor and Hungry
Abhijit Banerjee and Esther Duflo discuss why the issue of world hunger is much more complicated than most people think.
Textbook References:
Pages 550-554 “Economic Growth Around The World”Pages 565-566 “Health and Nutrition”
Page 632 “Worker Health”
March 29
A Striking Scatterplot
There is a strong negative correlation between the unemployment rate and the ratio of fixed investment to GDP.
Textbook References:
Pages 397-399 “What Causes the Labor-Demand Curve to Shift?”Pages 555-560 “How Productivity Is Determined”
Pages 581-583 “Some Important Identities”
January 1
Letter to the President
Mankiw offers advice to President Obama on how to work with Republicans.
Textbook References:
Page 6 “Principle 3: Rational People Think at the Margin”Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 246-248 “The Fiscal Challenge Ahead”
Pages 442-445 “The Political Economy of Income Redistribution”
Pages 563-565 “Education”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 842-843 “Dealing with Deficits”
December 24
Economists on Ebenezer Scrooge
Three economists discuss the virtues of Scrooge, and a fourth claims there is a humbug industry.
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 8-10 “Principle 6: Markets Are Usually A Good Way To Organize Economic Activity”
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Page 560 “Saving and Investment”
Pages 584-585 “Supply and Demand for Loanable Funds”
December 20
The Value of Good Teachers
Eric Hanushek calculates that good teachers have an astonishingly high value to society.
Textbook References:
Pages 414-416 “Human Capital”
Page 556 “Human Capital per Worker”
Pages 563-565 “Education”
December 16
The Economics of Seinfeld
Clips from the TV show "Seinfeld" are used to illustrate a variety of economic concepts.
Textbook References:
Pages 4-5 “Principle 1: People Face Trade-offs”Pages 5-6 “Principle 2: The Cost of Something is What You Give Up to Get It”
Page 6 “Principle 3: Rational People Think at the Margin”
Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Chapter 3 “Interdependence and the Gains from Trade”
Pages 67-72 “Demand”
Pages 73-76 “Supply”
Pages 144-153 “Controls on Prices”
Chapter 10 “Externalities”
Pages 226-227 “The Different Kinds of Goods”
Pages 227-232 “Public Goods”
Pages 230-232 “The Difficult Job of Cost-Benefit Analysis”
Pages 232-237 “Common Resources”
Pages 274-275 “Fixed and Variable Costs”
Page 281 “Economies and Diseconomies of Scale”
Pages 312-315 “Why Monopolies Arise”
Chapter 16 “Monopolistic Competition”
Pages 370-378 “The Economics of Cooperation”
Pages 399-400 “The Supply of Labor”
Page 414 “Compensating Differentials”
Page 442 “Utility”
Page 465 “Utility: An Alternative Way to Describe Preferences and Optimization”
Pages 484-489 “Asymmetric Information”
Pages 556-558 “Technological Knowledge”
Pages 578-580 “Financial Intermediaries”
Pages 598-600 “Present Value: Measuring the Time Value of Money”
Pages 603-604 “Diversification of Firm-Specific Risk”
Pages 606-609 “The Efficient Market Hypothesis”
Pages 630-631 “The Economics of Unions”
Pages 703-705 “The Prices for International Transactions: Real and Nominal Exchange Rates”
Pages 707-708 “The Basic Logic of Purchasing Power Parity”
Page 833 “Time Inconsistency”
December 15
Avinash Dixit
There is a brief biography of Avinash Dixit.
Textbook References:
Chapter 16 “Monopolistic Competition”
Pages 370-378 “The Economics of Cooperation”
Pages 566-567 “Property Rights and Political Stability”
December 5
200 Countries and 200 Years in 4 Minutes
A YouTube video shows how income per capita and life expectancy have changed for 200 countries over the last 200 years.
Textbook References:
Pages 522-523 “International Differences In GDP And The Quality Of Life”
Pages 550-554 “Economic Growth Around The World”
November 6
Laura Tyson and Me on NPR
Laura Tyson and Greg Mankiw discuss current fiscal policy on National Public Radio.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Page 560 “Saving and Investment”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 654-655 “The Financial Crisis of 2008”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 830-832 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
Pages 842-843 “Dealing with Deficits”
September 13
Viard on Marginal Tax Rates
Alan Viard argues in favor of keeping the Bush tax cuts because they will promote growth.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Page 560 “Saving and Investment”
Page 586 “Policy 1: Saving Incentives”
Pages 587-589 “Policy 2: Investment Incentives”
September 11
Miron on the Bush Tax Cuts
Jeffrey Miron argues in favor of making the Bush tax cuts permanent.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Page 560 “Saving and Investment”
Page 586 “Policy 1: Saving Incentives”
Pages 587-589 “Policy 2: Investment Incentives”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
August 4
Rogoff on the Current Policy Challenge
Kenneth Rogoff worries that an excessive concern with short-run aggregate demand management may cause us to ignore long-run issues such as productivity growth and innovation.
Textbook References:
Pages 554-560 “Productivity: Its Role and Determinants”
Pages 560-572 “Economic Growth and Public Policy”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 830-832 “Should Monetary And Fiscal Policymakers Try To Stabilize The Economy?”
July 22
Solow on DSGE Models
Robert Solow suggests that the Dynamic Stochastic General Equilibrium models that dominate modern macroeconomics do not pass the smell test.
Textbook References:
Page 23 “The Role of Assumptions”
Pages 23-24 “Economic Models”
Pages 560-572 “Economic Growth and Public Policy”
July 21
The Dodd-Frank Anti-Stimulus Bill
The new financial-reform bill has had the unintended consequence of shutting down the bond market because of uncertainty about legal liability.
Textbook References:
Pages 566-567 “Property Rights and Political Stability”Pages 576-577 “The Bond Market”
July 6
An Interview with Bob Hall
A wide-ranging interview with Robert Hall touches on a variety of topics.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Pages 566-567 “Property Rights and Political Stability”
Pages 604-605 “The Trade-Off Between Risk and Return”
Pages 654-655 “The Financial Crisis of 2008”
Pages 740-742 “Three Key Facts About Economic Fluctuations”
Pages 778-787 “How Monetary Policy Influences Aggregate Demand”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
July 1
The Influence of Alberto Alesina
Alberto Alesina argues that governments should take large, credible steps to reduce their deficits. That would calm bond markets and increase confidence for investors and consumers.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 560-572 “Economic Growth and Public Policy”
Pages 576-577 “The Bond Market”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Pages 842-843 “Dealing with Deficits”
June 27
Links
There are five links sent in by readers. Four of them are humorous, but one, "Ten Commandments for Fiscal Adjustment," is serious.
Textbook References:
Pages 246-248 “The Fiscal Challenge Ahead”Pages 560-572 “Economic Growth and Public Policy”
Pages 589-593 “Policy 3: Government Budget Deficits and Surpluses”
Page 750 “The 2008 Fiscal Stimulus”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-797 “Using Policy To Stabilize The Economy”
Pages 842-843 “Dealing with Deficits”
May 4
A Talk from Esther Duflo
A 16 minute video shows John Bates Clark Medalist Esther Duflo discussing how the scientific method can improve the lot of the world's poorest.
Textbook References:
Pages 22-29 “The Economist as Scientist”
Pages 550-554 “Economic Growth Around the World”
April 21
Zipf's Law
Edward Glaeser discusses Zipf's Law, which is the idea that "the number of people in a city is inversely proportional to the city's rank among all cities."
Textbook References:
Pages 571-572 “Promoting Technological Progress”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 4
Defending Jobs Abroad
Matthew Slaughter argues that taxing U.S. firms' foreign operations will destroy jobs in the U.S.
Textbook References:
Pages 7-8 “Principle 4: People Respond to Incentives”Page 8 “Principle 5: Trade Can Make Everyone Better Off”
Pages 54-57 “Comparative Advantage: The Driving Force of Specialization”
Page 567 “Free Trade”
How to Help Haiti
The Changing Face of the World Economy
Paul Collier and Jean-Louis Warnholz explain both why Haiti needs private investment and why private investors hesitate to invest in Haiti.
Textbook References:
Pages 560-572 “Economic Growth and Public Policy”