Economy

It is canonical among economists that as the price of a good rises, the quantity demanded of that good falls (other factors held equal). The underlying logic is that a higher price for a certain good has two effects. The “substitution effect” is that a higher price for a certain good causes potential buyers to … Continue reading Are Theme Park Rides a Giffen Good? The post Are Theme Park Rides a Giffen Good? first appeared on Conversable Economist.

I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided back in 2011–to my delight–that the journal would be freely available online, from the current issue all the way back to the first issue. You can download individual … Continue reading Fall 2024 Journal of Economic Perspectives Free Online The post Fall 2024 Journal of Economic Perspectives Free Online first appeared on Conversable Economist.

To explain the high and rising price of housing, the standard economic intuition is that growth in supply isn’t keeping up with growth in demand. One piece of evidence supporting this intuition is the “vacancy rate”–that is, what share of owner-occupied housing or rental housing is empty? Here are a couple of figures from the … Continue reading Housing: Supply Chasing Demand The post Housing: Supply Chasing Demand first appeared on Conversable Economist.

Every now and then, I hear proposals to fund some program by taxing the wealthy–or even just confiscating wealth above a certain level. For the purposes of this post, I’m not interested in the question of whether this tax would be a good idea. (Shocking disclosure: I don’t think it’s a good idea.) I just … Continue reading How Much Money from a Confiscatory Tax on the Uber-Wealthy? The post How Much Money from a Confiscatory Tax on the Uber-Wealthy? first appeared on Conversable Economist.

Government attempts to assist household with low incomes face an inevitable practical problem. As income for a household rises, it will be necessary to phase out the government assistance. But what happens if–at least over a certain range of incomes–a previously low-income household that increases its earnings discovers that its government benefits are being decreased … Continue reading A Benefits Cliff in Washington, DC The post A Benefits Cliff in Washington, DC first appeared on Conversable Economist.

I occasionally pause for a moment to remember that just a few years ago, before we were concerned that AI would take all the jobs, we were worried that new robotics technologies would take all the jobs. And before that, we were worried that automation would take all the jobs. Can we learn something from … Continue reading The Fourth Industrial Revolution and the Future of Work The post The Fourth Industrial Revolution and the Future of Work first appeared on Conversable Economist.

The rules governing the US labor market are just different from other high-income countries in some way. One difference involves paid time off. Here’s a figure from Betsey Stevenson, “A federal guarantee for earned paid time off” (Hamilton Project at the Brookings Institution, October 2024). You will notice that in this comparison across various high-income … Continue reading A Federal Guarantee of Paid Vacation? The post A Federal Guarantee of Paid Vacation? first appeared on Conversable Economist.

The United States has had a nationwide childcare program at one time in its history: a temporary program during World War II. Tim Sablik of the Federal Reserve Bank of Richmond tells the story and summarizes some economic research on the topic in “When Uncle Sam Watched Rosie’s Kids: To support women working on the … Continue reading The National Childcare Program During World War II The post The National Childcare Program During World War II first appeared on Conversable Economist.

Joe Walker serves as interlocutor in “Larry Summers — AGI and the Next Industrial Revolution” (The Joe Walker Podcast, October 22, 2024). Here are a couple of points that caught my eye, but there is much more in the interview itself. Here’s Summers on the long-term increase in economic output over time and the interrelationship … Continue reading Larry Summers on the Economics of AI The post Larry Summers on the Economics of AI first appeared on Conversable Economist.

Among the major issues not being discussed in the US presidential campaign are those facing the US healthcare system. The two main concerns are well-known. One is high cost. The US economy spends about $12,500 per person on health care in 2022, according to the OECD. The second- and third-highest countries, Switzerland and Germany, spend … Continue reading A Prescription for Fixing the US Healthcare System The post A Prescription for Fixing the US Healthcare System first appeared on Conversable Economist.