One Reason That Geography Matters

Have you ever looked closely at Japan and the United Kingdom? Described by geographer Jared Diamond in a fascinating podcast, they look remarkably similar. Today Japan and the British Isles are modern industrial societies.  Both are north/south archipelagos located in…

How a Skating Rink is Like the Economy

Driving around Columbus Circle in NYC, sometimes I wonder why so many drivers do what they are supposed to do.   Economist Dan Klein gave me an answer in “Rinkonomics.” He asks that we imagine for a moment that we have…

Six Areas Where Economists Disagree With Everyone Else

A small firestorm ignited when the Chair of the President’s Council of Economic Advisers said, “Outsourcing is a growing phenomenon, but it’s something that we should realize is probably a plus for the economy in the long run.” Hearing the comment…

Restaurant Economics: How to Make 1500 Meals a Day

At 2 am, converging at the delivery entrance of Balthazar in NY’s SoHo are mussels from New Zealand, russet potatoes from Idaho, steak from the Midwest and chicken breast and bacon from Prince Edward Island while some Little Skookum oysters originated in Washington State.…

Economic Ideas: The Blame Frames

Analyzing the housing bubble, we can all agree with some basic facts. If you look at the Case-Shiller Index, you would see that a typical home in a major US city was worth 26% less during April 2013 than November…

Eurozone: First Latvia and then Croatia?

Reading about Latvia’s probable eurozone entry at the beginning of 2014 and then perhaps Croatia by 2017, I remembered some wise words from economist Russ Roberts. During 2010, he presented a fascinating monologue Econtalk podcast in which Adam Smith and David…

Laissez-Faire: When Is It Okay to Do Nothing?

I suspect we have a “bias for action.” Imagine a soccer game that has gone into overtime. Each team has 5 penalty kicks. For several, remaining in the center of both posts, the goalie does not move. Statistically, her behavior…

The Real Mother of Invention

Saying that profit, not necessity is the mother of invention, economic historian John Steele Gordon starts his column in this week’s Barrons. His focus was the 18th century clipper ships that earned people like John Jacob Astor $50,000 for a single voyage…

World Trade Spin

We might be able to divide the world between economic thinkers and everyone else. I noted yesterday that economist Gregory Mankiw, as President Bush’s Council of Economic Advisers chair, said that outsourcing was probably a plus in the long run.…

Manufacturing and the Market System

Adam Smith might look at recent increases in manufacturing and say, “The market works.” Here are some stories. One furniture manufacturer decided it could make consumers happier by moving back from China. Yes, it would mean paying a sander $10…