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Category Archive for 'Market Failures'

In revisiting my class discussions on the economics of public goods, I came across a paper from the OECD that incredibly I had never been aware of. One of the major results in the paper is shocking. Now the sample size, as with all cross-country analyses, is small, and there are the usual caveats about […]

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These may seem trite to you, but I find them more than illustrative. First Example In one of the classrooms I teach in, there is an analog clock up in the corner of the room. Both I and the students find it useful in managing our time and attention in class. I remark, very obnoxiously […]

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Global Fuel Subsidies

Lucas Davis has estimated the economic cost of global fuel subsidies. It’s a short and easy to read paper and I think as valuable as any complex paper written in economics. He is estimating only a portion of the economic cost of fossil fuel policy – asking what the “dead weight loss” is due to […]

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Maybe we’ll get less of this economic nonsense? Here’s the latest from Vox: The simple danger is that monopolies tend to charge high prices. I am sure lay readers don’t see the problem with it. But if I actually put a single question on a Intermediate micro final exam that asked, “what is wrong with this comment?” […]

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The “left” sees the last 34 years as a revival (was there ever a VIVAL?) of laissez-faire dogmatism. Some folks like myself see it as almost the diametric opposite. Of course, some of this could be “settled” by empirical evidence. The number of pages of regulations? The dollars spent complying with regulations? The number of […]

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No Brainer Indeed

In this month’s edition of Popular Science in an opinion piece titled “No Brainer” we are treated to: If the government wants to fund a grand national effort, it should attack problems whose solutions are bad for business. For instance, let’s cure cancer. The biomedical industry treats cancer with drugs, surgery, and other high budget […]

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The following thoughts were motivated by my colleague’s musings this morning. When we discuss possible justifications for providing subsidies to students to attend college, aside from the possibility that educating young people in Universities might provide benefits to the rest of us that we do not pay for ourselves (you KNOW I am very skeptical […]

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Perhaps the most sophisticated argument that markets “fail” is that two parties to a transaction are rarely privy to the same information (you can write down a problem where total ignorance is better than partial ignorance for market outcomes). In the presence of information asymmetries you would expect certain parties to be driven from the […]

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How often do you encounter organizations that seem to have “no agenda” or claim to be “non-partisan.” If ever there was a time to do some mental substitution, this would be it. I worked for a “non-partisan economic research foundation” once. They were gold bugs and some strange blend of Marxist sympathising libertarians. I had […]

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I am sure you folks are familiar with the claim that “markets are prone to monopolies.” Let’s just take that as given and accept the conclusion that this requires considerable government interference in the course of voluntary transactions. The data are not very clear that this is, indeed, what happens. Take a look at the […]

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