Category Everyday economics
Egalitarian airlines
Jules Dupuit gave the classic account of the indignities of second class travel, and the economics behind them: It is not because of the few thousand francs which would have to be spent to put a roof over the third-class carriage or to upholster the third-class seats that some company or other has open carriages […]
The students’ dilemma
Imagine a world where education is of no intrinsic value, and serves only as a signal of an unobservable character trait called "ability." Performance (which can be observed) is determined by both ability and effort. Effort is costly. Some students have a high level of ability, and some have a low level of ability. A professor's […]
Bond Villains as Fiscal Stimulus
I’ve known my friend Harold since high school and over the years both of us have given a lot of thought to the problems of the Northern Ontario economy while watching much of its traditional economic base in resource extraction and processing slowly disappear. Harold has spent a good many years in the economic development […]
Why politicians court the middle class
Raphael Deketele, a student in my fourth year honours seminar, just unearthed a strange finding from the 2006 World Values Survey (WVS). The WVS interviewed over 1000 Americans, and asked them: Here is a scale of incomes on which 1 indicates the “lowest income decile” and 10 the “highest income decile” in your country. We would […]
An Economic Salute to US Presidents!
Well tonight is the next US Presidential debate and what better way to help set the stage than an economic retrospective on American Presidents and their relative performance when it comes to economic growth. I went onto Eh.Net and have obtained real per capita US GDP in 2005 constant dollars for the period 1790 to […]
Is the Stationary State Coming?
Robert Gordon has recently published an NBER paper titled “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds”. The paper questions the universal assumption that gained currency in the 1950s with Robert Solow's work that economic growth is a continuous process that will persist forever. Indeed, Gordon suggests that the past 250 years […]
Office hours: an accidental experiment
Every year I conscientiously hold office hours, and every year only a few students take advantage of them. The TAs' offices are just as empty. Some students even pay for private tutoring, instead of taking advantage of the free services provided by the university. This week, however, I carried out an accidental experiment.
The economics of paywalls
With on-line advertising revenues stagnant at best, and print in terminal decline, newspapers are starting to build paywalls. The economics of on-line media is a little different from the economics of print, and a lot different from the economics of, say, potatoes. The difference is shown in the diagram below.
Too much stuff: the deadweight loss from overconsumption
In a simple supply and demand world there are two sources of waste. Underconsumption is the first. It occurs when taxes, price ceilings, price floors or other interventions prevent the economy from reaching the free market equilibrium. Consumers would like to buy, suppliers would like to sell, but they cannot make a mutually beneficial exchange […]
The unbearable richness of biscuits
Last summer I picked up an old, well-thumbed, Magic Baking Powder Cookbook. Judging by the cover, and the inclusion of recipes that "won first prize at the 1931 Canadian National Exhibition", I would guess that the recipes in the book date from the 1930s or 40s.
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