October 2026
- Oct 26, 2026ConceptsMetcalfe's Law: Why Networks Get More Valuable as They GrowBriscoe, Odlyzko and Tilly argued in IEEE Spectrum in 2006 that treating every possible connection as equally valuable vastly overcounts, and proposed that value grows in proportion to n log n instead, a curve still faster than linear but far gentler than the square. Metcalfe answered in 2013 with a decade of Facebook data he said fit the quadratic form. The article traces the law from an Ethernet sales slide to the exponent that remains genuinely unsettled.
- Oct 12, 2026ConceptsThe Law of Diminishing Returns ExplainedBiologists derived the same curve independently: Charnov's 1976 marginal value theorem predicts a forager leaves a patch when its intake rate falls to the average available across the environment, and Cowie's 1977 study of great tits found they go close to that optimum, lingering when travel between patches is costly. The article separates increasing, diminishing and negative returns, and argues the way past the curve is to unfix the binding constraint.
September 2026
June 2026
February 2026
January 2026
- Jan 28, 2026ConceptsBehavioral Economics Explained SimplyStarting from Kahneman and Tversky's 1979 demonstration that people turn risk-averse for gains and risk-seeking for losses, the page explains loss aversion, mental accounting, anchoring, availability and choice architecture. It also draws the line the field has had to draw: ego depletion and warm-coffee priming failed to replicate, while a 2019 meta-analysis across 607 studies in 50 countries put loss aversion at roughly 1.69, below the original 2:1 estimate.
- Jan 20, 2026ConceptsNetwork Effects ExplainedWhy value grows faster than membership, and what that does to competition. The page distinguishes direct, indirect, data, social and geographic network effects, explains the cold start problem and minimum viable network density, and covers the negative side: congestion, content pollution, social dilution. Metcalfe's n squared rule is treated as a simplification, with later analysts arguing real network value grows closer to n log n.
September 2025
June 2025
May 2025
February 2025
- Feb 21, 2025ExplainersExploring the Root Causes of the Housing CrisisA new US home cost $11,900 in 1960 against a median household income of $5,600, roughly two to one. By 2022 it was about $430,000 against $70,000, over six to one, and ten to one in San Francisco. The research is unusually consistent: housing is expensive where supply is legally constrained. Houston and Tokyo stayed affordable because building is easy. The harder question is why the politics resist solutions economists broadly agree on.
- Feb 17, 2025ExplainersThe Essential Guide to Understanding TaxesEarning more cannot leave you worse off under a graduated schedule, which is why the effective rate always sits below the top marginal one. The page then explains where the real advantage lives: because gains are taxed only when realized, appreciated assets can be held, borrowed against, and passed on at death with a stepped-up basis that erases a lifetime of untaxed appreciation. Payroll caps and sales taxes compound it.
- Feb 14, 2025CultureExamining the Causes of the Great DepressionAmerica had survived market panics before, including 1907, without a decade-long catastrophe. What turned a severe recession into structural collapse was policy: more than 9,000 banks failed between 1930 and 1933, the Federal Reserve contracted the money supply by a third while defending the gold standard, Smoot-Hawley triggered retaliation, and Hoover raised taxes mid-recession. Bernanke told Friedman in 2002: you're right, we did it.
October 2024
- Oct 22, 2024ConceptsUnderstanding Goodhart's Law and Its ConsequencesThe memorable paraphrase about measures becoming targets came later, from Strathern writing on British university audit in 1997. The page's most useful contribution is a taxonomy separating four distinct failure modes, Regressional, Extremal, Causal and Adversarial, because each calls for a different response. It is also careful to flag the famous cobra bounty story as possibly apocryphal while noting the Hanoi rat bounty is historically documented.
- Oct 17, 2024ConceptsOpportunity Cost: The Price of Every ChoiceFrederick, Novemsky, Wang and Dhar showed in the Journal of Consumer Research in 2009 how little of this cost people register: 75% said they would buy a well-reviewed DVD for $14.99, but only 55% did once the question added that buying it left $14.99 less for other things. One sentence moved intent 20 points, meaning the alternative had not been considered at all. Decca, Xerox and Kodak made the same mistake with bigger numbers.
September 2024
August 2024
- Aug 24, 2024ExplainersUnderstanding Economic Inequality and Its Growth FactorsElias Hasket Derby's fortune made him roughly 10,000 times wealthier than the average American of 1790. The present gap between the richest American and median household wealth runs to roughly 1.7 million to one. Explains Piketty's r greater than g and the objection that returns should fall as capital accumulates, the Great Compression when top tax rates passed 90 percent, and declining union power.
- Aug 10, 2024ExplainersSocial Mobility in America: A Growing ConcernThe comparison is what stings, with roughly 12% in Denmark, 13% in Canada and 14% in Australia. The page is careful that the Great Gatsby Curve linking inequality to immobility is a cross-country correlation rather than proof of cause. Its strongest causal evidence is the reanalysis of Moving to Opportunity, where children who moved before 13 earned about 31% more in their mid-20s while teenage movers gained little or nothing.
- Aug 5, 2024ExplainersWhat Is Macroeconomics? GDP and Economic Cycles ExplainedThe NBER dates recessions from a broad reading of activity, so the familiar two-quarter shorthand can disagree with the official call. The page is equally careful about the measures themselves, noting Kuznets built the national accounts at Congress's request, which means GDP was designed for a purpose rather than discovered. Knowing what it was built to do explains what it leaves out.
July 2024
- Jul 31, 2024ExplainersCentral Banking Explained: Policies and Economic ImpactsHe had built his academic work on how the Fed failed as lender of last resort between 1930 and 1933, letting banks collapse and the money supply contract. Running the institution when the next systemic run arrived, he acted on that reading. The page uses the episode to separate the two jobs a central bank does, setting monetary policy and standing behind the banking system, which are easy to confuse until they conflict.
- Jul 4, 2024ExplainersEconomic Mechanisms of Recessions: Causes ExplainedThe NBER does not use the two-negative-quarters rule that most people quote; it weighs output, income, employment, production and sales. Covers the feedback loop from asset crash to credit freeze to layoffs, the TED spread hitting about 4.6 points in October 2008, the Sahm Rule, and the scarring that leaves recession-era graduates earning 10 to 15 percent less a decade on.
June 2024
- Jun 27, 2024ExplainersHow Money Is Created: Banks and Modern Currency MechanicsThey do not take deposits in and lend them out, which means commercial lending generates most of the money supply while central banks influence rather than control it. The page uses the post-2008 evidence to retire the textbook multiplier too, since quantitative easing produced enormous excess reserves without proportional growth in the broader money measures.
- Jun 25, 2024ExplainersHow Inflation Works: Causes and Central Bank ResponsesHungary in July 1946 reached 207 percent inflation per day, so prices doubled roughly every 15 hours and the final exchange was 400 octillion pengő to one forint. Explains what the CPI basket actually measures and why its shelter component lags real rents by 12 to 18 months, the demand, cost and monetary causes, and how Volcker broke 1970s inflation at 20 percent rates.
- Jun 21, 2024ExplainersHow Financial Markets Work: Stocks, Bonds, and Price DiscoveryNo authority sets a stock price: bids and asks collect in an order book, and the last match becomes the quoted price until the next trade. Fama's 1970 paper split market efficiency into weak, semi-strong and strong forms; the strong form is generally rejected by the evidence and the semi-strong form remains heavily debated. The article also explains why liquidity can evaporate in a panic, and how leverage turns a 10% price drop into forced selling.
May 2024
- May 22, 2024CultureThe Economic Motivations Behind Migration TrendsCard found no relative wage drop after the 1980 Mariel boatlift. Borjas re-analyzed the same data in 2017 with a different comparison group and found sharp losses among high school dropouts. Each says the other erred, and the dispute stands. Also covers why the poorest rarely migrate, the migration hump, chain migration networks, and the $540 billion in remittances that dwarfs aid.
- May 18, 2024CultureUrbanization and Its Economic Implications for CitiesJane Jacobs watched one Greenwich Village street from her window for years and identified four conditions for a working neighborhood that economists later confirmed. Covers the agglomeration premium, Moretti's local multiplier, the Chetty finding that long commutes predict worse mobility for poor children, and why the most productive cities price out the workers who would gain most.
April 2024
- Apr 28, 2024CultureWhat Is Slavery and Its Legacy? Impact Through HistoryNorth America received about 388,000 of the 12.5 million Africans shipped across the Atlantic, the smallest major share, yet the enslaved population reached nearly 4 million by 1860 through domestic sale. Follows the money from a $3.5 billion human asset base, through sharecropping and convict leasing, to redlining and the reparations case built on it.
- Apr 24, 2024CultureWhat Is Neoliberalism? Understanding Modern Economic SystemsHayek gathered his circle at a Swiss resort in 1947, when Keynesianism was orthodoxy and their ideas were marginal. Thirty years of stagflation later they were governing. Weighs the actual record: real success against inflation, but slower per-capita growth than the postwar decades, the top 1 percent US income share roughly doubling, and the IMF itself conceding the program was oversold.
- Apr 22, 2024CultureLiberalism: Understanding Its Philosophical RootsIn the United States liberal means left of center; almost everywhere else it means free markets and limited government. Both are branches of one tradition running from Locke's natural rights through Mill's harm principle. The split turns on Berlin's two concepts of liberty: freedom from interference, or the actual capacity to use it. Covers Rawls, Nozick, and the communitarian and feminist critiques.
- Apr 17, 2024CultureWhat Is Economic Development? Wealth and Historical ContextStiglitz argued the IMF applied ideological prescriptions without regard to country conditions, liberalized capital accounts before institutions could handle them, and imposed austerity into downturns. Latin America's per capita income in 1990 sat no higher than in 1980. The page traces the retreat from universal blueprints toward institutions, sequencing and trials that measure specific programs.
- Apr 10, 2024CultureUnderstanding Capitalism's ImpactThe invisible hand came with a visible fist in his own text, since he distrusted merchants using political influence to restrict competition and suppress wages, and he backed public infrastructure, schooling for working-class children and usury laws. The page holds the productive case and the critique together rather than resolving them, and notes Weber's Protestant thesis is contested because capitalism flourished in Catholic Italy first.
- Apr 1, 2024CultureHow the Economy Grows: Understanding Economic GrowthSolow attributed roughly 87.5 percent of US output-per-hour growth from 1909 to 1949 to technical change his model could measure but not explain. Romer answered it thirty years later with non-rival ideas. Traces why poor countries converge only when institutions match, how South Korea left Ghana behind from equal footing in 1960, and why unchecked warming could cut global per-capita income 23 percent by 2100.
March 2024
- Mar 28, 2024CultureWhy Inequality Is Rising: Economic and Political ForcesChetty's series turns a distributional argument into a generational one. The page gives Piketty's r greater than g a full hearing and then the rebuttals, including Rognlie's point that most of the capital-output rise is housing appreciation, a policy problem with targeted fixes. Autor's task framework explains the hollowed middle, since computers substitute for routine work while leaving judgment and manual care largely alone.
- Mar 9, 2024CultureExplaining the Gender Pay Gap: Key Research InsightsClaudia Goldin won the 2023 Nobel in economics for explaining why the gap persists after decades of gains in education and legal protection. US women working full time year round earn roughly 82 cents per dollar; controlling for occupation, industry, education, experience and hours narrows it to between 2 and 8 cents. Both figures are real and both are contested, since the controls may obscure as much as they reveal.
December 2023
- Dec 9, 2023ConceptsUnderstanding Keynesian Economics: Demand and StabilizationKeynes sat at the Paris Peace Conference in 1919 watching the Allies dismantle Central European economies, concluded the statesmen around him had lost their minds, resigned from the British Treasury and spent six months writing the book that made him famous. The framework that followed argued markets left alone could fail catastrophically and persistently, and that societies did not have to accept that failure.
- Dec 8, 2023ConceptsInternational Trade Theory: Benefits and ChallengesRicardo asked in 1817 whether England should trade with Portugal if Portugal produced everything more efficiently. Comparative advantage said yes, both gain, and that became the foundation of the postwar trading order. In 2013 Autor, Dorn and Hanson estimated Chinese import competition cost roughly one million US manufacturing jobs between 1990 and 2007, concentrated in specific communities and not reabsorbed as theory predicted.
- Dec 7, 2023ConceptsWhat Is Game Theory? Strategy, Equilibrium, and Why PeopleRational individual choices routinely produce collectively worse outcomes. In the Prisoner's Dilemma, defection dominates whatever the other player does, so both serve three years instead of one. Repetition changes that. In Robert Axelrod's tournaments, the winner was Tit-for-Tat: cooperate first, copy the opponent's last move, four lines of code, and it won the second tournament too. This guide covers equilibria, signaling, auctions and deterrence.
- Dec 4, 2023ConceptsWhat Is Behavioral Finance? When Markets Meet PsychologyBrad Barber and Terrance Odean examined the complete trading records of 66,000 households at a discount brokerage over six years. The most active trading quintile earned net annual returns of 11.4 percent against the market's 17.9 percent, a shortfall of 6.5 percentage points attributable almost entirely to trading costs and to selling better stocks to buy worse ones. Men traded 45 percent more than women and underperformed them by 1.4 percentage points a year.
- Dec 3, 2023ConceptsWhat Is Behavioral Economics? How Psychology Overturned the Rational ActorJohnson and Goldstein's 2003 Science paper on organ donation across 11 European countries is the sharpest demonstration: effective donation rates averaged around 15 percent where people had to opt in and around 97 percent where they had to opt out, with demographics, medical infrastructure and stated attitudes otherwise comparable. Covers prospect theory, loss aversion, anchoring, nudge policy and Gigerenzer's objection.
October 2023
August 2023
- Aug 25, 2023ExplainersHow Inflation Impacts the Economy and Your WalletThe CPI is built from roughly 80,000 prices across 200 categories, yet the Federal Reserve targets the PCE deflator instead, which typically runs 0.2 to 0.5 percentage points below CPI. This explainer separates demand-pull from cost-push and built-in inflation, tracks the 2022 to 2023 tightening that took the federal funds rate from near zero to 5.25-5.50% as CPI fell from 9.1%, and shows what hyperinflation looks like: in Zimbabwe, prices doubled roughly every 24.7 hours.
- Aug 18, 2023CultureWhat Is GlobalizationAutor, Dorn and Hanson's 2013 American Economic Review paper traced roughly 2.4 million lost US manufacturing jobs to Chinese import competition between 1999 and 2011, and found displaced workers did not smoothly find comparable work. Over a similar span, World Bank figures put extreme poverty at about 1.9 billion people, 36% of the world, in 1990, falling to roughly 700 million, or 10%, by 2015. Milanovic's elephant curve shows who captured those gains.
July 2023
May 2023
February 2023
- Feb 4, 2023ExplainersPrice Elasticity: Understanding Demand SensitivityConsumers need two or three years to change vehicles, commutes and where they live, so the long-run response is several times the short-run one. The page does not flinch from where inelasticity leads either. After insulin list prices rose sharply through the 2010s, a JAMA Internal Medicine letter found about 25 percent of insulin-dependent patients reported rationing doses because of cost.
- Feb 2, 2023ExplainersWhat Is Microeconomics vs MacroeconomicsThe two branches are not just small versus large. Keynes argued in 1936 that aggregate behavior needs its own framework because it cannot be derived by summing individual decisions, and the paradox of thrift shows why: each household saving more during a recession is prudent, yet all of them saving at once collapses demand and makes everyone poorer. Supply and demand, elasticity, externalities, GDP, inflation and policy all follow.
- Feb 1, 2023ExplainersWhat Is the Labor Market: How Jobs Are Created and DestroyedCard and Krueger compared fast-food employment in New Jersey, which raised its minimum wage from $4.25 to $5.05, with neighboring eastern Pennsylvania, which did not. Employment in New Jersey did not fall relative to Pennsylvania. The article also covers monopsony, where Azar, Marinescu, and Steinbaum found moving from the 25th to the 75th percentile of hiring concentration was associated with roughly 17 percent lower posted wages.
January 2023
December 2022
- Dec 30, 2022ConceptsWhat Is Welfare Economics? Evaluating Societal WellbeingHow economists judge whether a policy makes people better off. Pareto efficiency avoids comparing one person's gain to another's loss, but it cannot rank most real policies because almost all of them have losers, and an allocation can be Pareto efficient while being deeply unequal. Kaldor and Hicks proposed in 1939 that winners need only be able to compensate losers, which is the basis of cost-benefit analysis.
- Dec 27, 2022ConceptsInflation Psychology: Behavior in Times of Price IncreaseWhy inflation is a psychological phenomenon as much as a monetary one. Coibion and Gorodnichenko found using University of Michigan survey data that household expectations track the prices of frequently purchased goods, notably gasoline and groceries, so a gas spike adding 0.3 percentage points to headline inflation can move expectations by several full points. Expectations are self-fulfilling: believing in 5 percent inflation produces wage demands and preemptive price rises.
- Dec 6, 2022ConceptsMoney Explained: Currency, Credit, and TrustGraeber's synthesis found no documented society conducting routine stranger trade by barter, and the first monetary instruments were records of obligation, so the crucial technology was writing rather than metallurgy. Modern creation is just as misunderstood. The Bank of England stated in 2014 that bank lending creates deposits rather than banks lending out savings, and around 97 percent of UK broad money is deposits created by commercial lending.
- Dec 5, 2022ConceptsThe Zero-Sum Fallacy: Understanding Competition and OutcomesWhen zero-sum reasoning is correct and when it is a fallacy. A baker selling a loaf for $3 that cost $2 to make, to a buyer who values it at $4, creates $2 of value from nothing, split one dollar each way, which is the economic case for trade in a sentence. Genuine zero-sum situations exist, such as a single job opening or one electoral seat, but applying that logic to trade, immigration or innovation misreads games where cooperation expands the total.
- Dec 4, 2022ConceptsWinner's Curse: Why Winning Auctions Can Cost YouWhy winning a competitive bid is itself bad news. Three petroleum engineers named the effect in 1971 after noticing that firms winning offshore oil leases earned the worst returns: whoever submits the highest estimate of an uncertain value has almost certainly overestimated it. Bazerman and Samuelson showed it survives even when participants know the setup, and Andrade, Mitchell and Stafford found acquirer shareholders earned essentially zero across 4,256 mergers.
- Dec 3, 2022ConceptsUnderstanding Wealth Inequality: Metrics and DynamicsWhat wealth inequality is and what the data shows. Federal Reserve figures for 2022 put the US top 1 percent at approximately 31 percent of household wealth and the bottom 50 percent, roughly 65 million families, at about 2.6 percent, against roughly 22 percent and 5 to 6 percent in the mid-1970s. Piketty's r greater than g thesis is the main framework, though Rognlie attributed much of the rising capital share to housing rather than productive capital.
November 2022
- Nov 30, 2022ConceptsWhat Is Opportunity Cost: A Fundamental Economic ConceptFriedrich von Wieser coined the term in 1914, but the harder finding is how reliably people ignore it. In Shane Frederick and colleagues' 2009 Journal of Consumer Research experiments, simply telling one group that buying a $14.99 video meant not spending the money elsewhere made them significantly less likely to buy, and a follow-up found fewer than 25% of participants raised opportunity costs on their own, economics training included.
- Nov 27, 2022ConceptsInflation: Understanding Its Measurement and EffectsPrices more than double over 25 years at a rate most people treat as background noise. The 2 percent target is not a law of nature either, since New Zealand's central bank was the first to formally adopt one in 1990. The page also explains why the measure matters: CPI runs roughly 0.3 to 0.5 percentage points above PCE, and Social Security is indexed to CPI while the Fed sets policy on PCE.
- Nov 26, 2022ConceptsWhat Is Behavioral Economics? Psychology and Decision-MakingKahneman and Tversky described an identical procedure two ways. Framed as a 90 percent survival rate, 84 percent of physicians recommended the surgery; framed as a 10 percent mortality rate, only 50 percent did. Prospect theory explains why: people judge outcomes as gains or losses against a reference point, and losses weigh roughly twice as much. Gigerenzer's critique, that some of these are adaptive rather than errors, remains a live argument.
- Nov 21, 2022ConceptsDefining a Recession and Its Broader ImpactsWhat a recession actually is by official definition. The NBER calls it a significant decline in economic activity spread across the economy lasting more than a few months, and weighs income, employment, consumption, sales and industrial production rather than applying a mechanical rule. In 2022 the US had two consecutive quarters of negative GDP growth alongside strong employment growth and the NBER did not declare a recession. The UK does use the two-quarter rule.
October 2022
- Oct 21, 2022CultureWhat Is The Long Tail: How the Internet Changed What SellsChris Anderson's 2004 Wired article argued that near-zero distribution cost made obscure products viable: Rhapsody carried over 735,000 tracks against roughly 25,000 at a typical record store. Anita Elberse's 2008 Harvard Business Review analysis found the other half of the story: the share of listening going to top tracks was higher in streaming than on CD. Both hold at once, the tail lengthened and the head grew taller, matching Rosen's 1981 superstar economics.
- Oct 4, 2022ConceptsGame Theory Applications: Navigating Strategic DecisionsFlood and Dresher's 1950 experiment already contradicted the simple prediction. Axelrod later found why cooperation survives: his tournament was won by tit for tat, a few lines of code that cooperates first, retaliates at once, forgives immediately and stays legible to the other player. In noisy conditions, adding occasional forgiveness after a defection beats strict tit for tat by preventing punishment spirals.
- Oct 1, 2022ConceptsWhat Is Regulatory Capture: When Regulators Serve IndustryBy 2018 Boeing employees were performing roughly 96 percent of the certification work on the 737 MAX, according to the Department of Transportation Inspector General. After crashes that killed 346 people, the House Transportation Committee concluded in September 2020 that FAA oversight had been grossly insufficient. George Stigler's 1971 theory explains the pattern: concentrated industry interests outcompete a diffuse public, though capture is a tendency, not a certainty.
September 2022
August 2022
July 2022
- Jul 31, 2022ExplainersThe Labor Theory of Value and Its Historical ContextWhat the labor theory of value claims and where it broke down. Smith distinguished value in use from value in exchange and noted the water-diamond paradox, while Ricardo produced the most rigorous pre-Marxian version in 1817, holding exchange values proportional to relative labor times. Classical economists could not reconcile the paradox because they lacked marginal utility: water has enormous total utility but low marginal utility where it is abundant.
- Jul 30, 2022ExplainersUnderstanding Comparative Advantage in TradeRicardo's 1817 cloth and wine example shows the gains come from different opportunity costs, not from being better at anything, which is why no country is left without something to trade. The limits matter as much as the logic: Autor, Dorn and Hanson estimated Chinese import competition cost the United States 2.0 to 2.4 million jobs between 1999 and 2011, with lasting earnings losses in the communities hit hardest.
- Jul 28, 2022CultureThe Cobra Effect: Understanding Prohibition FailuresWhy prohibition tends to backfire through predictable incentives. Richard Cowan coined the iron law of prohibition in 1986: the harder the enforcement, the more potent the banned substance becomes, because concentrating potency makes a smaller shipment easier to hide and more profitable per unit of legal risk. US alcohol Prohibition saw spirits displace beer on the black market, and enforcement against heroin supply preceded illicit fentanyl displacing much of it.
- Jul 26, 2022ConceptsUnintended Consequences Explained: The Cobra Effect and Merton's TypologyFracking wastewater disposal is the link, and the page treats the famous cobra bounty story as a poorly documented parable rather than verified history. The rent control evidence is firmer, with Diamond, McQuade and Qian finding San Francisco landlords cut rental supply by 15% over two decades. Merton named the mechanism in 1936, and the most quoted formulation of Goodhart's Law is actually Strathern's from 1997.
- Jul 16, 2022ConceptsWhat Is Narrative Economics: How Stories Move MarketsShiller's claim is that the stories a society repeats about money change spending, borrowing and hiring, and that they spread like contagion, with infection rates, superspreaders and epidemic curves. He tracks them through newspaper and book archives: frugality language spiking in 1930 to 1932, Bitcoin's rotating justifications, GameStop reaching 483 dollars on a story about making the suits pay. The criticisms get a full hearing too.
- Jul 7, 2022ExplainersInput-Output Model Explained: Industry InterconnectionsHow Leontief turned the economy's web of interdependencies into mathematics. His first US input-output table, published in 1941, covered 41 sectors, and the first postwar table in 1952 covered 200. The analytical core is the Leontief inverse, which captures not just an industry's direct inputs but the inputs to those inputs through every round of production. It explains why the 2021 chip shortage halted auto plants worldwide.
May 2022
- May 23, 2022ConceptsMicroeconomics: Key Concepts and Theories ExplainedThat is the Bertrand paradox, and it sits against the Cournot model, which has prices above marginal cost with the same number of firms. The lab evidence is strong as well, since Vernon Smith found double auction markets converge quickly to competitive equilibrium even with few traders. The clearest applied win is auction design, with Milgrom and Wilson's spectrum auctions replacing administrative assignment and lotteries that wasted value.
- May 22, 2022ConceptsWhat Is Labor Economics?When New Jersey raised its minimum wage from $4.25 to $5.05 in April 1992 and Pennsylvania did not, Card and Krueger found fast food employment in New Jersey had not fallen relative to its neighbor, a result that broke the standard competitive prediction and helped earn Card a Nobel Prize. This guide covers reservation wages, employer market power, human capital versus signaling, Goldin's flexibility penalty, and union decline.
- May 21, 2022ConceptsFiscal Policy Explained: Government Strategies and EffectsBlanchard and Leigh showed the underestimate in 2013, meaning the programs were far more contractionary than their designers intended, and Greece saw GDP fall by over 25 percent. The debt case thinned too. Reinhart and Rogoff's 90 percent growth cliff was cited everywhere until a graduate student, Thomas Herndon, found coding errors in their spreadsheet, and the sharp threshold disappeared once corrected.
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