How Little We Know
Economist Russ Roberts opines on financial reform.

Take Out Your Pencils 3
In my most recent Ec 10 lecture, I discussed Arrow's Impossibility Theorem. Here, from my favorite textbook, is a fun problem based on it:A group of athletes are competing in a multi-day triathlon. They have a running race on day one, a swimming race on day two, and a biking race on day three. You know the order in which the athletes finish each of the three components. From this information, you are asked to rank the athletes in the overall competition. You are given the following conditions: The ordering of athletes should be transitive: If athlete A is ranked above ath

Now it all makes sense
Click on the graphic to enlarge.

Healthcare Reform and the Big Tradeoff
David Brooks gets it right today about the debate over healthcare reform. The fundamental question is, Should Americans embrace a more robust social safety net at the cost of much higher marginal tax rates, reduced work incentives, and a smaller economic pie?From a strictly economic perspective, there is no right answer to this question. Arthur Okun said long ago that the big tradeoff in economic policy is between equality and efficiency. The pending healthcare reform bill moves us along that tradeoff. Let's just not pretend, as some healthcare reformers would have us do, that we can easily get more equality w

The Changing Face of the World Economy
Source: Mark Perry. Click on graphic to enlarge.