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Chapter 11: Public Goods and Common Resources

Recent Posts
(Note: Page numbers referenced in posts prior to June 1, 2011 refer to 5th edition)

 

June 18

Elinor Ostrom has passed away

The New York Times presents an obituary of Nobel Laureate Elinor Ostrom. Ostrom challenged the idea that common resources are always over-exploited.

Textbook References:

Pages 224-229 “Common Resources”

January 19

On SOPA

The Stop Online Piracy Act is an attempt to stop the theft of intellectual property. The details about how the Act would work are worth worrying about, but it is important that property rights be protected.

Textbook References:

Pages 201-202 “Technology Spillovers, Industrial Policy, and Patent Protection”
Page 229 “Conclusion: The Importance of Property Rights”
Pages 301-302 “Government-Created Monopolies”

January 10

How to Reduce Traffic Congestion

A toll on the Highway 520 Bridge near Seattle has substantially reduced congestion.

Textbook References:

Pages 203-205 “Market-Based Policy 1: Corrective Taxes and Subsidies”
Pages 226-227 “The Case for Toll Roads”

December 17

Are Economists Selfish?

Are people who take economics classes less generous than others?

Textbook References:

Page 30 “Who Studies Economics?”
Page 220 “The Free Rider Problem”

April 19

A Free Book Well Worth Your Time

Mankiw recommends Policy and Choice: Public Finance through the Lens of Behavioral Economics by William J. Congdon, Jeffrey R. Kling, and Sendhil Mullainathan. A link allows you to download the book for free.

Textbook References:

Chapter 10 “Externalities”
Chapter 11 “Public Goods and Common Resources”
Chapter 12 “The Design of the Tax System”
Pages 484-489 “Asymmetric Information”

March 12

NPR Disses the Pigou Club

National Public Radio confuses Pigouvian taxes with sin taxes.

Textbook References:

Pages 210-212 “Based Policy 1: Corrective Taxes and Subsidies”
Pages 216-217 “The Case for Taxing Carbon”
Pages 234-235 “The Bloomburg Plan”

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”

June 5

Soda and Other Sins

Mankiw considers the question of whether decisions that do not impose external costs on others may impose external costs on future versions of ourselves. He also asks us if we "trust the government enough to appoint it your guardian?"

Textbook References:

Pages 10-12 “Principle 7: Governments Can Sometimes Improve Market Outcomes”
Pages 204-209 “Externalities and Market Inefficiency”
Pages 210-212 “Market-Based Policy 1: Corrective Taxes and Subsidies”
Page 251 “Should Income or Consumption Be Taxed?”

March 12

NPR Disses the Pigou Club

National Public Radio confuses Pigouvian taxes with sin taxes.

Textbook References:

Pages 210-212 “Market-Based Policy 1: Corrective Taxes and Subsidies”
Pages 216-217 “The Case for Taxing Carbon”
Pages 234-235 “The Bloomburg Plan”

December 30

A Debate for the Pigou Club

Ted Gayer, Brad DeLong and Paul Krugman discuss the possibility of "negative costs" from greenhouse gas reductions.

Textbook References:

Pages 209-215 “Public Policies Toward Externalities”
Pages 232-237 “Common Resources”


December 21

Sachs on the Copenhagen Summit

Jeffrey Sachs argues that the Copenhagen summit was a complete failure.

Textbook References:

Pages 232-237 “Common Resources”
Page 493 “Politicians are People Too”


November 19

Take Out Your Pencils 2

Mankiw poses a problem about common property resources suitable for introductory students.

Textbook References:

Pages 232-237 “Common Resources”

Chapter 11: Public Goods and Common Resources
Archived Posts

 

Apr. 30

The Rule of Law – Not!

Mankiw fears that recent government actions may erode property rights.

Textbook References:

Pages 7-8 “Principle 4: People Respond to Incentives”
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 237 “The Importance of Property Rights”
Pages 566-567 “Property Rights and Political Stability”


Feb. 2

The Problem of Hasty Public Investment

A newspaper illustrates how wasteful government spending can be.

Textbook References:

Pages 8-10 “Principle 6: Markets are Usually a Good Way to Organize Economic Activity”
Page 11 “Adam Smith and the Invisible Hand”
Pages 230-232 “The Difficult Job of Cost-Benefit Analysis”


Jan. 26

Listen to me Squawk

There is a link to a video of an interview with Mankiw about the current efforts to revive the economy.

Textbook References:

Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 230-232 “The Difficult Job of Cost-Benefit Analysis”
Pages 654-655 “The Financial Crisis of 2008”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 830-832 “Should Monetary and Fiscal Policymakers Try To Stabilize the Economy?


Jan. 22

Barro on Fiscal Stimulus

Robert Barro argues that the proposed stimulus package ignores what have economists have learned since 1936. There is also a link to Paul Krugman’s blog where he chides Barro for misrepresenting Keynes.

Textbook References:

Page 6 “Principle 3: Rational People Think at the Margin”
Pages 7-8 “Principle 4: People Respond to Incentives”
Pages 230-232 “The Difficult Job of Cost-Benefit Analysis”
Pages 589-591 “Policy 3: Government Budget Deficits and Surpluses”
Page 770 “The Origins of Aggregate Demand and Aggregate Supply”
Pages 791-792 “The Crowding-Out Effect”


Dec. 24

Feldstein on Defense Spending

There is a link to an editorial by Martin Feldstein that argues that a significant share of new government spending should be for defense.

Textbook References:

Pages 227-232 “Public Goods”
Pages 242-248 “A Financial Overview of the U.S. Government”
Pages 787-793 “How Fiscal Policy Influences Aggregate Demand”
Pages 793-796 “Using Policy to Stabilize the Economy”
Page 821 “Bernanke’s Challenges”
Pages 830-832 “Should Monetary and Fiscal Policymakers Try To Stabilize the Economy?