The trade accounts are among the most pernicious statistics ever collected. It’s long been remarked, for example, that merely by calling something a “deficit” it seems bad even though a current account deficit is matched by a financial account surplus. Put that issue aside, however, because the real problems are much deeper. The international accounts…
The Pernicious Trade Account
The Pernicious Trade Account
26 Apr 2026 Leave a comment
in applied price theory, economic history, financial economics, history of economic thought, international economics Tags: balance of trade
Is each American generation doing better?
23 Apr 2026 Leave a comment
in applied price theory, econometerics, economic history Tags: The Great Enrichment
We construct a posttax, posttransfer income measure from 1963 to 2023 based on the Current Population Survey Annual Social and Economic Supplement that allows us to consistently compare the economic well-being of five generations of Americans at ages 36–40. We find that Millennials had a real median household income that was 20% higher than that…
Is each American generation doing better?
The Paper That Breaks Climate Economics
22 Apr 2026 Leave a comment
in applied price theory, applied welfare economics, development economics, econometerics, economic history, economics of climate change, economics of natural disasters, energy economics, environmental economics, environmentalism, global warming, growth miracles
Part 1 of 2 on a damning new paper that takes on the top-down climate-economics literature — “The empirically inscrutable climate-economy relationship”
The Paper That Breaks Climate Economics
The Chinese Current Account Imbalances
21 Apr 2026 Leave a comment
in applied price theory, development economics, econometerics, economic history, economics of love and marriage, financial economics, growth miracles, labour economics, labour supply, population economics Tags: China
The subtitle of the paper is Puzzles, Patterns, and Possible Causes. Here is the abstract: China’s large current account surplus has been an irritant to its trading partners. While industrial and trade policies often lead to sector-level imbalances, they play a relatively limited role in the economy-wide surplus. Structural factors such as an unbalanced sex…
The Chinese Current Account Imbalances
The President(s) Fought the Law and the Law Won
18 Apr 2026 Leave a comment
in applied price theory, economic history, history of economic thought, income redistribution, industrial organisation, international economics, labour economics, labour supply, politics - USA, poverty and inequality, Public Choice, rentseeking, survivor principle Tags: creative destruction, free trade, tarrifs
In our textbook, Modern Principles, Tyler and I emphasize that Congress and the President are subject to a higher law, the law of supply and demand. In an excellent column, Jason Furman gives a clear example of how difficult it is to fight the law of inelastic demand: …Today a given number of autoworkers can…
The President(s) Fought the Law and the Law Won
The economic value of eliminating cancer
14 Apr 2026 Leave a comment
in applied price theory, applied welfare economics, econometerics, economic history, health economics Tags: life expectancies
This paper estimates the economic value to the United States of eliminating cancer mortality over a 35-year horizon beginning in 2030, which would eliminate 30.7 million cancer deaths with a total mortality burden of 380 million life-years. We quantify the economic value of this substantial reduction in cancer mortality by incorporating the monetized value of…
The economic value of eliminating cancer
The Happiness Crash of 2020
13 Apr 2026 Leave a comment
in applied price theory, econometerics, economic history, technological progress
From the still-active Sam Peltzman: I document a sudden, sharp and historically unprecedented decline in self-reported happiness in the US population. It occurred during 2020, the year of the Covid pandemic, and mainly persists through 2024. This happiness crash spread across nearly all typical demographics and geographies. The happiest groups pre-Covid (e.g., whites, high income,…
The Happiness Crash of 2020
That time we gave Cocaine to our kids for a sore throat and toothaches.
12 Apr 2026 Leave a comment
in economic history, economics of regulation, health economics
How things have changed. Nowadays we wouldn’t dream of giving our children cocaine to treat sore throats or toothaches, Firstly because we know how devastating cocaine is and secondly we would be arrested, But in days of yore it was perfectly acceptable to give you offspring and indeed yourself a ‘healthy’ dose of cocaine.
That time we gave Cocaine to our kids for a sore throat and toothaches.
The Stresa Front -When Mussolini ‘condemned’ Hitler.
11 Apr 2026 Leave a comment
in defence economics, economic history, International law, war and peace Tags: Italy, Nazi Germany
The Stresa Front was a short-lived diplomatic alignment in 1935 between United Kingdom, France, and Italy, formed in response to the growing threat posed by Nazi Germany under Adolf Hitler. Named after the Italian town of Stresa, where representatives met in April 1935, the agreement aimed to preserve the post–World War I European order and […]
The Stresa Front -When Mussolini ‘condemned’ Hitler.
What Freedom of Speech Is For: The case against silencing
11 Apr 2026 Leave a comment
in economic history, economics of crime, economics of education, economics of religion, Karl Popper, law and economics, liberalism, Marxist economics, politics - Australia, politics - New Zealand, politics - USA Tags: Age of Enlightenment, conjecture and refutation, free speech, Freedom of religion, philosophy of science, political correctness, regressive left
In 1633, the Roman Inquisition condemned Galileo for heresy. His offence was to argue that the Earth moves around the Sun. The Church was not acting out of malice. It was protecting a politically approved consensus against what was considered to be dangerous nonsense. The theologians and philosophers who condemned Galileo were not fools. They […]
What Freedom of Speech Is For: The case against silencing
Bet On It Book Club: For a New Liberty, Chapter 9
11 Apr 2026 Leave a comment
in Austrian economics, business cycles, economic history, history of economic thought, macroeconomics, monetary economics, Murray Rothbard Tags: monetary policy
SummaryIn 1973, when the first edition of For a New Liberty was published, Keynesians were still sitting pretty. Five years later, the Keynesians had so much egg on their faces that Rothbard was inspired to add this entirely new chapter on “Inflation and the Business Cycle: The Collapse of the Keynesian Paradigm” to his revised…
Bet On It Book Club: For a New Liberty, Chapter 9
Osborne 1-First Portable Computer
11 Apr 2026 Leave a comment
in economic history, entrepreneurship Tags: creative destruction
Computers nowadays come in all shapes and sizes from a smartphone to the super computer Mira. An essential requirement nowadays is that computers are portable. It may be hard to believe but the history of portable computers goes back 45 years, even when I write it ’45 years’ I can’t believe it . I was […]
Osborne 1-First Portable Computer
Oil and monetary policy
10 Apr 2026 Leave a comment
in applied price theory, defence economics, economic history, economics of bureaucracy, energy economics, financial economics, history of economic thought, labour economics, macroeconomics, monetary economics, politics - New Zealand, Public Choice, unemployment, war and peace Tags: 1973 oil crisis, monetary policy, oil shocks
I didn’t have too much problem with either the Reserve Bank Governor’s speech a couple of weeks ago on a framework for how monetary policy might deal with the oil shock, or with this week’s OCR review release from the Monetary Policy Committee. It was really all very orthodox stuff, much as any of the […]
Oil and monetary policy
Francesca Jackson: King Charles, President Trump and the State Visit: Some Constitutional Considerations
08 Apr 2026 1 Comment
in constitutional political economy, economic history, politics - Australia Tags: British constitutional law, British politics
Buckingham Palace has finally announced that the King and Queen’s planned visit to the US will indeed go ahead at the end of April 2026. After US President Donald Trump launched a string of verbal attacks on the UK Prime Minister, there had been growing calls for Keir Starmer to cancel the King’s visit, which […]
Francesca Jackson: King Charles, President Trump and the State Visit: Some Constitutional Considerations
Bet On It Book Club: For a New Liberty, Chapter 8
04 Apr 2026 Leave a comment
in applied price theory, Austrian economics, economic history, history of economic thought, labour economics, labour supply, Murray Rothbard, welfare reform
SummaryThis chapter, on “Welfare and the Welfare State,” argues that the welfare state gives the poor perverse incentives. A superficial reader might say, “However original this was in 1973 when it was first written, it’s now old hat. Clinton made the same arguments for welfare reform.” However, on closer examination, Rothbard’s analysis remains distinctive both…
Bet On It Book Club: For a New Liberty, Chapter 8
Utopia, you are standing in it! 
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