Maybe not, isn’t that a form of double counting? After all, defense spending is there to enable the production of other goods and services, it is not useful per se. Chandler S. Reilly and Vincent Geloso recalculate the history of U.S. economic growth using this new method: In fact, our corrections applied to the entire […]
Should gdp include defense spending?
Should gdp include defense spending?
15 May 2025 Leave a comment
in applied price theory, defence economics, economic growth, economic history, macroeconomics
Supply is elastic, installment #6437
14 May 2025 Leave a comment
in applied price theory, entrepreneurship, health economics, industrial organisation, politics - USA, Public Choice, rentseeking Tags: price controls
Numerous empirical studies show a relationship between a drug’s expected market size and the magnitude of research and development investments. Early studies focused on changes to market size resulting from the demographics of disease burden (Acemoglu and Linn 2004) and policy changes influencing market demand (Finkelstein 2004). These findings have largely been confirmed by more […]
Supply is elastic, installment #6437
What’s a New Drug Worth?
13 May 2025 Leave a comment
in applied price theory, health economics, politics - USA
In a a juxtaposition of events that redefines the meaning of “coincidence,” President Trump announced a new policy for prescription drug pricing this morning, and the the Spring 2025 issue of the Journal of Economic Perspectives, released three days ago on Friday morning, begins with a four-paper symposium on drug pricing. (Full disclosure: I work…
What’s a New Drug Worth?
Some Links
13 May 2025 Leave a comment
in applied price theory, econometerics, industrial organisation, international economics, survivor principle Tags: free trade, tariffs
TweetNicholas Bloom, Kyle Handley, André Kurmann, and Philip A. Luck revisit the “China Shock.” Two slices: Our research investigates the extent to which the opposing trends in manufacturing and services job growth are related. Our findings reveal that local labor markets more exposed to Chinese import competition experienced larger manufacturing job losses. But these losses…
Some Links
The Mainstream World Is Not Free-Market
10 May 2025 Leave a comment
in applied price theory, applied welfare economics, Austrian economics, comparative institutional analysis, constitutional political economy, economic history, economics of education, economics of regulation, history of economic thought, human capital, labour economics, occupational choice
An excerpt from Chapter 1 of *Unbeatable*
The Mainstream World Is Not Free-Market
How Can You Tell if Health Insurance Helps Health?
10 May 2025 Leave a comment
in applied price theory, health economics Tags: health insurance
It may seem obvious that health insurance helps health, but very few cause-and-effect conclusions are obvious to economists. For example, suppose that we just compared the health of everyone who has health insurance and everyone who doesn’t. It would be unsurprising to find that those with health insurance are healthier, but the two groups will…
How Can You Tell if Health Insurance Helps Health?
Policy whiplash risks eroding NZ’s investment stability
10 May 2025 Leave a comment
in applied price theory, comparative institutional analysis, economics of regulation, energy economics, environmental economics, law and economics, politics - New Zealand, property rights
Roger Partridge writes- Resources Minister Shane Jones recently floated a novel idea: Government-backed insurance for oil and gas investors to protect them against future policy reversals. Let that sink in. A New Zealand minister is contemplating taxpayer-funded insurance to compensate companies against… the decisions of future New Zealand Governments.
Policy whiplash risks eroding NZ’s investment stability
The Economic Consequences of Ever-Growing Government in Finland
10 May 2025 1 Comment
in applied price theory, economic growth, entrepreneurship, human capital, labour economics, labour supply, macroeconomics, Public Choice Tags: Finland, taxation and entrepreneurship, taxation and investment, taxation and labour supply
I’m currently in Finland for meetings with various people and I learned that the country’s bloated public sector and expensive welfare state are imposing a very heavy cost on the economy. How heavy of a cost? According to IMF data, there’s been no growth in per-capita GDP over the past 18 years. Why is Finland […]
The Economic Consequences of Ever-Growing Government in Finland
Why Is the US Economy Surging Ahead of the UK?
09 May 2025 1 Comment
in applied price theory, economic growth, macroeconomics, politics - USA, technological progress Tags: British politics
The US economy has emerged from the pandemic growing at a faster pace than the UK and other high-income countries. Simon Pittaway tackles the question of why in “Yanked away: Accounting for the post-pandemic productivity divergence between Britain and America” (Resolution Foundation, April 2025). The average standard of living in any economy, over time, will…
Why Is the US Economy Surging Ahead of the UK?
Does he know what a woman is now?
07 May 2025 Leave a comment
in applied price theory, discrimination, economics of education, gender, health and safety, human capital, labour economics, labour supply, occupational choice, politics - New Zealand, poverty and inequality, Public Choice, rentseeking Tags: gender wage gap, sex discrimination
Labour leader Chris Hipkins has joined the chorus of those opposing changes to pay equity legislation. Does this mean he knows what a woman is now? It is easy for opposition parties and their allies to criticise proposed changes but Heather du Plessis-Allan points out the problem with existing legislation: . . . Those pay […]
Does he know what a woman is now?
Tabarrok on the Movie Tariff
07 May 2025 1 Comment
in applied price theory, international economics, movies, politics - USA, Public Choice, rentseeking Tags: 2024 presidential election, free trade, tariffs
The Hollywood Reporter has a good piece on Trump’s proposed movie tariffs: Even if such a tariff were legal — and there is some debate about whether Trump has the authority to impose such levies — industry experts are baffled as to how, in practice, a “movie tariff” would work. “What exactly does he want […]
Tabarrok on the Movie Tariff
The best tariff threat is one you do not have to use
06 May 2025 1 Comment
in applied price theory, international economics, politics - USA Tags: 2024 presidential election, free trade, game theory, tariffs
Following up on an earlier post, Reciprocal tariffs as a tit-for-tat strategy in a repeated prisoners’ dilemma From NY Times:Trump imposed, quickly withdrew and then threatened to bring back huge tariffs on dozens of countries. Immediately, they began calling and asking what they could do to stop him. “More than 100 countries have already come to…
The best tariff threat is one you do not have to use
The price of “free” healthcare is the wait
06 May 2025 Leave a comment
in applied price theory, economic history, health economics, politics - USA Tags: Canada, health insurance
While healthcare in Canada’s single-payer health care system is technically free, its real price is measured in wait times. In 2023, the median wait time from a general practitioner’s referral to treatment reached 27.7 weeks—the longest ever and nearly triple the 9.3 weeks reported in 1993. (MuskegonPundit) To see this, think of “free” as…
The price of “free” healthcare is the wait
Some weak evidence in favour of an information intervention in economics to close the gender gap
05 May 2025 Leave a comment
in applied price theory, discrimination, econometerics, economics of education, experimental economics, gender, labour economics, labour supply, occupational choice Tags: gender gap, sex discrimination
I’ve written a couple of times about information interventions designed to attract more female students to study economics (see here and here). The results have generally been disappointing. That shouldn’t be too much of a surprise. If it was really simple to get people to change their behaviour with information, then advertising would be far…
Some weak evidence in favour of an information intervention in economics to close the gender gap
Twisted Illogic
02 May 2025 Leave a comment
in applied price theory, history of economic thought, industrial organisation, international economics, politics - USA, Public Choice, rentseeking Tags: 2024 presidential election, free trade, tarrifs
TweetHere’s a letter to The Hill. Editor: Pres. Trump said that “China probably will eat those tariffs” (“Trump says China ‘probably will eat those tariffs’,” April 29). So the president believes that the tariffs will be ‘eaten’ by China – meaning, he believes the tariffs won’t result in higher prices in America of Chinese goods.…
Twisted Illogic
Utopia, you are standing in it! 
Recent Comments