A decade ago, I coauthored a report looking at how greater localism and subsidiarity could be achieved in a very centralised country where local councils have variable capabilities. We settled on policy trial areas. The basic gist was as follows. First, a community would pitch a policy trial area – a special economic zone – with different policy…
SEZs as policy trial areas
SEZs as policy trial areas
29 May 2026 1 Comment
in applied price theory, comparative institutional analysis, constitutional political economy, economic growth, economics of regulation, industrial organisation, law and economics, macroeconomics, property rights
Europe’s War on Wealth
29 May 2026 Leave a comment
in applied price theory, economic growth, economic history, fiscal policy, income redistribution, industrial organisation, labour economics, labour supply, macroeconomics, occupational choice, P.T. Bauer, poverty and inequality, Public Choice, public economics Tags: European Union
Given the relative economic weakness that plagues most European nations (documented here, here, here, here, and here), a top priority for policy makers should be to improve incentives for wealth creation. But that assumes politicians care about the prosperity of citizens. Based on a new report from the European Commission, the answer is no. Instead of […]
Europe’s War on Wealth
Trade Deficit Illiteracy, Part III
28 May 2026 Leave a comment
in applied price theory, budget deficits, economic growth, fiscal policy, history of economic thought, international economics, macroeconomics, politics - USA
Looking at Part I and Part II, and considering the focus of today’s column, this series should actually be entitled “Trade Deficit Literacy.” That’s because the material I cite explains that a trade deficit is merely the flip side of an investment surplus. And it is good that the United States is a magnet for […]
Trade Deficit Illiteracy, Part III
Blame Washington for the Great Depression, Part III
27 May 2026 Leave a comment
in budget deficits, business cycles, economic growth, economic history, fiscal policy, great depression, history of economic thought, macroeconomics
To follow up on Part I and Part II in this series, let’s start with this Stossel video featuring Professor Don Boudreaux of George Mason University. The message is simple and accurate. Starting nearly 100 years ago, we got terrible statist policy from Herbert Hoover, followed by terrible statist policy from Franklin Roosevelt. No wonder […]
Blame Washington for the Great Depression, Part III
Schumpeter comes to Wellington
27 May 2026 Leave a comment
in economic growth, economic history, economics of bureaucracy, macroeconomics, politics - New Zealand, Public Choice
(And what we can learn from the Luddites) In 1987 Telecom New Zealand employed about 25,000 people. By 1997 it employed under 8,000. A single corporation shed 17,000 jobs in a decade, in a country of 3.3 million. The cost of Telecom’s long-distance calls fell by 60 per cent between 1987 and 1992. The decade that followed […]
Schumpeter comes to Wellington
The corporate tax rate really matters
26 May 2026 Leave a comment
in applied price theory, econometerics, economic growth, economic history, entrepreneurship, fiscal policy, macroeconomics Tags: taxation and entrepreneurship, taxation and investment
Three findings emerge. First, improvements in aggregate tax competitiveness are positively and significantly associated with real GDP per capita growth, robust to a wide range of controls. Second, this aggregate effect is driven entirely by the corporate tax pillar; no other component displays a significant growth effect. Third, the corporate tax effect materializes contemporaneously and…
The corporate tax rate really matters
Are Living Standards Higher in France or Mississippi?
25 May 2026 Leave a comment
in applied price theory, economic growth, economic history, income redistribution, labour economics, macroeconomics, poverty and inequality, Public Choice Tags: France
Earlier this month, in Part V of my series on the U.S. vs. Europe (previous versions available here, here, here, and here), I shared a chart showing the OECD calculations of “Actual Individual Consumption.” The AIC numbers are designed to give people an apples-to-apples comparison of living standards. I’m re-sharing the chart today, and I’ve […]
Are Living Standards Higher in France or Mississippi?
The (Amusingly) Destructive Economics of Wealth Taxation
24 May 2026 Leave a comment
in applied price theory, economic growth, entrepreneurship, fiscal policy, human capital, income redistribution, labour economics, labour supply, macroeconomics, poverty and inequality, Public Choice, public economics Tags: taxation and entrepreneurship, taxation and investment, taxation and labour supply
I’ve shared several columns (here, here, here, here, and here) reviewing scholarly research on the harmful economic impact of wealth taxation. From now on, however, I think I’ll simply share this clever video from the folks at Reason. The video uses humor to make very important points about how a wealth tax would diminish incentives […]
The (Amusingly) Destructive Economics of Wealth Taxation
The Case Against Socialism, Part V
24 May 2026 Leave a comment
in applied price theory, comparative institutional analysis, constitutional political economy, development economics, economic growth, economic history, growth disasters, growth miracles, macroeconomics, Marxist economics Tags: North Korea, South Korea
As far as I know, Matt Mitchell and I are not related, but we both have a low opinion of socialism. He covers a lot of ground (defining socialism, the role of prices, socialism’s death toll, and the myth of Nordic socialism) in this 15-minute interview. Matt does such a good job that I didn’t […]
The Case Against Socialism, Part V
The AI Jobs Panic Comes to Sacramento
23 May 2026 Leave a comment
in applied price theory, economic growth, entrepreneurship, human capital, industrial organisation, labour economics, labour supply, macroeconomics, market efficiency, occupational choice, survivor principle, theory of the firm
California has seen the future of work, and Sacramento’s first instinct is to convene 14 task forces about it. Gov. Gavin Newsom signed Executive Order N-6-26 today, setting California’s workforce agencies in motion on directives involving research reviews, revisions to the state’s Worker Adjustment and Retraining Notification (WARN) Act, studies of new safety-net programs, a…
The AI Jobs Panic Comes to Sacramento
The Rise and Fall (and Rise) of Sweden, Part IV
23 May 2026 Leave a comment
in applied price theory, comparative institutional analysis, economic growth, economic history, economics of regulation, industrial organisation, international economics, macroeconomics, public economics Tags: Sweden
I don’t often claim to be ahead of the curve, but I’m going to pat myself on the back in today’s column about Swedish economic policy. More than 16 years ago, I started writing about Sweden’s shift from statism to markets. More than 14 years ago, I praised Swedish policy makers for significantly reducing the […]
The Rise and Fall (and Rise) of Sweden, Part IV
Do Market Reforms Cause Growth?
08 May 2026 Leave a comment
in applied price theory, development economics, econometerics, economic growth, economic history, history of economic thought, labour economics, macroeconomics, unemployment
Do market-oriented reforms cause economic growth? This paper revisits this question using a cross-country panel of reform episodes identified from various changes in well-known economic freedom and structural reform indices. We exploit the timing of reforms using distributed-lag and event-study frameworks that trace the dynamic response of per-capita GDP. We find little evidence of immediate…
Do Market Reforms Cause Growth?
The United States vs. Europe, Part V
03 May 2026 Leave a comment
in applied price theory, economic growth, economic history, macroeconomics Tags: European Union
The world’s big economic policy battle is not capitalism vs. socialism. Other than a few primitive backwater nations like Cuba and North Korea, genuine socialism has largely been vanquished. Instead, the battle in most countries largely revolves around the size of the welfare state. At the risk of over-simplifying, here are the three choices. Should […]
The United States vs. Europe, Part V
On the Great Recession
02 Apr 2026 Leave a comment
in Austrian economics, budget deficits, business cycles, economic growth, fiscal policy, global financial crisis (GFC), great depression, great recession, history of economic thought, labour economics, macroeconomics, monetarism, unemployment
TweetPrager University’s new short video on the Great Recession was inspired by Chapter 5 of Phil Gramm’s and my 2025 book, The Triumph of Economic Freedom. The post On the Great Recession appeared first on Cafe Hayek.
On the Great Recession
Javier Milei Week, Part VII: What Is the Left Saying?
30 Mar 2026 Leave a comment
in applied price theory, development economics, economic growth, growth disasters, liberalism, libertarianism, macroeconomics, Marxist economics Tags: Argentina
Before the 2023 presidential election in Argentina, 108 left-leaning economists released a letter warning that Javier Milei’s “economic proposals…are fraught with risks that make them potentially very harmful for the Argentine economy.” Voters ignored those warnings and elected Milei. And the 108 lefty economists – including class-warfare ideologues such as Thomas Piketty and Gabriel Zucman – wound up with […]
Javier Milei Week, Part VII: What Is the Left Saying?
Utopia, you are standing in it! 
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