Economic Logic

As the subtitle of this blog indicates, there is economics in everything. Even in activities that are illegal, immoral or banned. Slavery is...

The big problem with labor income taxation is that it discourages effort. What you would really want to do it tax luck (being born intellige...

One could consider terrorism to be the ultimate crime, yet an argument can be made that terrorism is the best thing that could happen to red...

Insurance is a difficult business in the presence of moral hazard. While an insurance company can make a profit by exploiting the risk avers...

Why marry when cohabitation can provide the same benefits of economies of scale and companionship? One may even think that cohabitation is s...

Do the economic conditions in which you grew up have an impact on beliefs and opinions about the economy? We all have notice how our grand-p...

Westerners complain about sweatshops in Asia for two reasons: they produce at much lower labor costs, thus undercutting the Western labor fo...

In dynamic economic models, future periods are typically discounted geometrically, i.e., at a constant rate. There is, however, mounted evid...

You have heard or read the public opinion theories that the oil companies are acting like monopolies (i.e., they conspire) to manipulate gas...

There are two simple prerequisites to get of child labor: high returns to education and sufficient parental income. The difficulty is to sat...

A worker on unemployment insurance is supposed to actively look for a job and accept suitable job offers. If caught cheating, one is subject...

There has been a long discussion in the literature on whether intelligence is inherited or acquired, the nature versus nurture debate. The t...

Every party would like to find a way to find the perfect candidate to run for office. In some way, this is the goal of primaries in the Unit...

We have all used this example in class: in economies with no credit markets or serious banking, people may use cattle as a means of storage ...

There is an endless debate about estate taxation, especially in the United States. One side wants to repeal it because it discourages entrep...