Prediction: no William Wallace speeches from Ben

In the next two years — before the memory of this recession fades, but long enough from now that it doesn’t risk unanchoring expectations — Ben Bernanke will begin peppering his speeches and testimony before Congress with references to some form of history contingent policy (e.g. price level or nominal output targeting, state-dependent inflation targets, […]


The problem with academic macroeconomists is that they’re terrible at telling stories. We say recessions are caused by real and nominal shocks and people snore. And monetary policy is too boring to be the best aggregate demand policy. “You mean to tell me that buying and selling some debt instruments is the key to solving […]

I hate the second best world we live in!

Even if the free banking argument is correct, and the Fed should be abolished, I would continue to advocate the ideas expressed in this essay. As I indicated, we are currently stuck with the system we have, and if it performs poorly (particularly in the direction of deflation), people will almost certainly blame the resulting […]

Economics and morality

Of course, Oxycodone is legal with a prescription, but that’s a distinction without a difference, as it was illegal for my brother to buy, possess, and presumably sell from time to time. His addiction existed in a curious demimonde wherein the whole treatment and rehab and recovery cultures attempted–I emphasize, attempted–to ignore the plain fact […]

I don’t get this (anymore)

Peak Oil is the idea that the economy is heavily dependent on petroleum and we are getting close to pumping all of the stuff out of the ground. Thus, catastrophe. The typical economist’s response is that the dwindling supplies will increase the price of oil. This will make substitutes more attractive and it will induce […]

Excess demand watch

Being a proper MR drone, I’ve pre-ordered Cowen’s latest book. He had me so worked up that I’m not only anticipating it, but also his next next book. Apparently, his next next book will be moral philosophy as economics (i.e. done right!). Key words: tragedy and bliss, inframarginal analysis, pragmatic normativity. (I made the last […]

The problem with Economists

We have an incomprehensible, to most, outside-in view of the world. David Friedman says something correct but incomprehensible: Climate aside, we do not live in a static world—consider the changes that have occurred over the past century. The shifts we can expect to occur due to technological progress alone, even without allowing for political and […]


The gateway drug: Moving forward, we need to be less ideological and more empirical in figuring out what works in combating America’s drug problem. One approach would be for a state or two to experiment with legalization of marijuana, allowing it to be sold by licensed pharmacists, while measuring the impact on usage and crime. […]

So bad its good?

I think it would be neat if this movie became a cult classic for the same reason most cult classics get their status: its sooo bad its good. Tyler Cowen: I can only report that The End of Poverty, narrated throughout by Martin Sheen, puts Ayn Rand back on the map as an accurate and […]

Justice vs preferences

Those whose bumper stickers read “If you want peace, work for justice” simply take it for granted that there is no question what is just; if you want to find out, just ask them. The problem with the world as they see it is merely that other people are insufficiently virtuous to act accordingly. — […]