Category Everyday economics
How to cope with an autistic economist
Mainstream economics is sometimes described as an autistic way of understanding the world, and prominent economists such as Scott Sumner have gone public with their autistic tendencies. The "autism" of an academic economist is so far away from the struggles of a head-banging, withdrawn, perseverating child it seems almost wrong to equate the two. Yet, as Tyler Cowen […]
The basic arithmetic of RRSPs and TFSAs
Financial advisors seem to be everywhere this time of year, pontificating about the merits of Registered Retirement Savings Accounts (RRSPs) and Tax Free Savings Accounts (TFSAs). I'm not a financial advisor, but I know a bit about how the tax system works, and can do some basic arithmetic.
Retirement and the non-smoothing of consumption of leisure
Most of us take a short break for coffee, a longer break for lunch, a longer break from late afternoon to the following morning, a longer break at weekends, a longer break for holidays, and then a very long break indeed when we get old. There are two questions: 1. Why do we bunch our […]
Looking for an Example of Price-Elasticity of Demand?
The application results for UK universities in the wake of a tripling of tuition fees are in and they show a drop in applications. The limit on tuition fees in September 2012 is projected to rise to up to 9,000 pounds per year up from about 3,350 pounds for an increase of about 169 percent. […]
The efficiency case for nepotism
A firm wanting to invest in a worker, to train her and give her valuable skills, runs a risk: what if she leaves, and takes her valuable human capital elsewhere? A firm can induce its employees to stay through deferred compensation. It pays new employees less than their productivity merits, and senior employees more. The […]
The Gambling Economy: A Zero Sum Game?
Two stories in the Toronto Star this week have left me wondering if there is a new grand strategy at work for transforming Ontario’s economy in the wake of its manufacturing decline.
Does Christmas Really Create Deadweight Loss?
"I want a baby doll and a waterproof [coat] with a hood and a pair of gloves and a toffee apple and a gold penny and a silver sixpence and a long toffee." Annie Howard, Christmas 1911. In 1993, Joe Waldfogel asked his undergraduates to estimate the total amount paid by the gift-givers for all […]
Books for budding economists
"Magrathea is a myth, a fairy story, it's what parents tell their kids about at night if they want them to grow up to be economists, it's…" Douglas Adams, Hitchhiker's Guide to the Galaxy. What books should you give your children (nieces, nephews, friends) if you want them to grow up to become economists?
Why the distribution of reality is skewed and so newspapers are biased towards bad news
"News" is the difference between what happens and what you expected to happen. If you have rational, and hence unbiased, expectations, then the news, on average, should be neither good nor bad. The good news and the bad news should cancel out. So why does the news that gets reported seem mostly bad news? Does […]
Low vs falling prices, and relative vs absolute prices, Intro Econ again
The discussion of Intro Economics in my last post got a bit esoteric at times. I want to bring us all back down to earth. This morning I got an email from a student who took my Intro Economics course last year. He works in retail, selling hi-tech goods. He asked me this question: hi-tech […]
Worthwhile Canadian Initiative 
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