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3 weeks ago | 
econlib.org | David Henderson |Max Molden |Pierre Lemieux
On March 7, 2025, I highlighted Herb Stein’s article “Balance of Payments,” which appeared in David R. Henderson, ed. The Concise Encyclopedia of Economics. That led to a lively discussion in the Comments section. Frequent commenter Warren Platts noted that the U.S. Net International Investment as a percentage of GDP has gone downhill since about 2007 and now sits at minus 90%. That might sound scary and it did make me wonder.
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3 weeks ago | 
econlib.org | Max Molden |Pierre Lemieux |Scott Sumner
Donald Trump’s decision to impose tariffs has sparked a lively debate among economists and others: are tariffs good? Maybe some of them? Should governments then impose those tariffs that are good? While these discussions are interesting in themselves, they also raise a more general question: what should economists be doing at all? The title of this blog post is an echo of Buchanan’s seminal paper. However, while I allude to Buchanan, it is not his paper that I want to refer to.
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Oct 26, 2024 | 
econlib.org | Scott Sumner |Max Molden |VANCE GINN
Mancur Olson once argued that Germany and Japan grew rapidly after WWII largely because a great deal of bureaucratic deadwood was removed by the war—allowing these defeated nations to rebuild with a more streamlined and efficient economic system. A David Brooks column discusses this theory:In 1982, the economist Mancur Olson set out to explain a paradox.
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Oct 26, 2024 | 
econlib.org | Max Molden |VANCE GINN |David Henderson
The socialist calculation debate is firmly located within economics. But a look at philosophy can shed light on the kind of insight Ludwig von Mises gave us, and thereby sharpen our understanding of socialism and its problems. It shows what we can know about socialism through conceptual analysis, and what such analysis cannot tell us. Philosophy makes clear that there are analytic truths, which describe that something is true by virtue of its meaning.
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Aug 28, 2024 | 
econlib.org | Kevin Corcoran |Scott Sumner |Max Molden
This is my second of two posts on Matt Zwolinski’s criticism of the moral parity thesis, looking at the second (and to me, more interesting) objection to moral parity.
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Aug 28, 2024 | 
econlib.org | Scott Sumner |Max Molden |David Henderson
Noah Smith has a post that advocates policy reforms to encourage more construction of housing. At one point he makes the following observation:
Housing policy is incredibly tough in America — and in most other rich countries — because housing has to serve two functions at once. It’s both a consumption good and an investment asset. A house is a place to live, but it’s also something that’s supposed to make you wealthier over time, when its price goes up.
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Aug 27, 2024 | 
econlib.org | Max Molden |David Henderson |Pierre Lemieux
Friedrich Hayek argued that only action can be just or unjust. So, when the famous Austrian playwright and novelist Ödön von Horváth was promenading on the Champs-Élysées during a thunderstorm and was hit—and ultimately killed—by a bough of some tree, we cannot speak of injustice. The tree did not intend to kill him; it just happened. But Hayek’s view that justice only meaningfully applies to actions has further (and perhaps more important) implications.
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Mar 3, 2024 | 
econlib.org | David Henderson |Scott Sumner |Max Molden
I went to my second Braver Angels meeting yesterday and enjoyed it even more than the first. At the start, the moderator had us go around the room and tell our names, whether we were red or blue or some other color, and whether anything at a previous meeting or previous meetings had affected our views. Often people went off script to talk about a concern they had, but I found that interesting also. I found myself letting go of my need to have everybody stay within the one-minute time limit.
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Mar 2, 2024 | 
econlib.org | Scott Sumner |Max Molden |Pierre Lemieux
I often wonder if the human brain is wired to look for monocausal explanations. Think about how often you hear the phrase, “The real problem is . . . “Why assume there is just one real problem? Most macroeconomic problems are somewhat complex. Here’s a typical situation:1. A negative real shock slows economic growth, lowering the natural rate of interest. 2. Central banks are slow to react, and thus the policy rate moves above the natural rate. 3. This tightens monetary policy, slowing nominal GDP growth.
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Mar 2, 2024 | 
econlib.org | Max Molden |Pierre Lemieux |Kevin Corcoran
Dogmatism is bad. If someone calls you dogmatic, an ideologue, he implies that you are irrevocably wedded to your ideology and your belief system. You refuse to consider stringent counterarguments and quibbling counterevidence. Instead of taking into account the arguments for and against, say, the support of a subsidy for the—surely incredibly important—chip industry, you, the dogmatist, proclaim that subsidies per se are reprehensible, illegitimate, or inefficient. Or all three things at once.
