Bubbles

Bubble Ahoy!

Is the economy in for another bubble? We’ve seen the housing bubble pop, and before that we had a tech bubble. These events divide the profession, as every economist has their own pet theory describing bubbles. Economics news hunters seek these bubbles much like Ahab sought Moby Dick; the first to spot the bubble (or […]

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crusoe

Money, Exchange, and Robinson Crusoe

Money can be defined as the general medium of exchange, or the most widely traded good. However, it is neither a consumer nor a producer good. Suppose Robinson Crusoe, Friday, and Jackson are all on their island. Crusoe wants a rabbit from Friday’s collection, but he knows that Friday will not accept the fedora that […]

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fema

To Aid or Not to Aid: The Harms of Federal Disaster Relief

It is easy to deride recent claims by certain economists that the federal government has no business offering aid to the victims of last month’s Midwestern tornado outbreak. As pictures of destroyed homes and devastated families flood the media, it is hard to imagine a person who is unwilling to offer whatever government aid is available. But while […]

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Fed

Would a 3rd Round of Quantitative Easing be a Charm?

Would a 3rd Round of Fed Quantitative Easing be a charm? Matthew O’Brien, writing last week for The Atlantic, certainly feels it would be. Those who share his sentiments were disappointed when Fed Chairman Ben Bernanke in his hearing before Congress stated “monetary policy is not a panacea”, which many have interpreted as a sign […]

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MW

Minimum Wage Distorts Reality

A price control is a legal price established by the government that forbids the selling of a good or service above some maximum or below some minimum price. It is an example of triangular intervention—the state coerces two parties to exchange at a certain price. The direct consequence of the effective maximum price control is […]

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Change

Some Things Never Change

I have really enjoyed studying economics. One aspect in particular which has drawn me to the science of economics is its permanence as a result of its causal-realist nature. Sound economic theory establishes truths that hold from generation to generation. It provides one with a timeless framework to evaluate market exchange between individuals as well […]

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