Beware when headlines proclaim a new record for some economic indicator. A quick example explains why. My weight hit a record in November 1968. An Army physical put it at 179 pounds. The previous March it was only 144 pounds.…
Mad cows and irrational humans
Human beings are irrational in how they handle risk. Irrational reactions or poor information about risky choices result in our society being less well off than if we managed risk better. The way we seem to be reacting to news…
Incentives often bring demand shifts
Incentives always have unintended consequences. Economics is about how humans respond to incentives. Not all responses, however, are intended or even anticipated. Unintended responses to incentives imposed by businesses or governments often outweigh intended effects. In teaching economics, it is…
One simple life saw so many changes
Technological changes in communication and transportation affected our economy enormously in the last century. My mother died Christmas afternoon at age 90, and experiences from her life drive home the impacts of such change on our society. When Mom was…