The Reconstruction

In response to Tim Haab’s question as to whether gas prices are becoming more volatile… I argue that it’s lower inventories at work:

CNN, on this breathtaking development: As gas goes up, driving goes down (CNN) — At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate. The Department of Transportation said figures from March show the steepest decrease in driving ever recorded. Tomorrow, a special report: “Fire [...]

Brad DeLong asks, over his morning Diet Pepsi, if it is time to create a fiscal stabilization board to control government spending in the way that the Federal Reserve controls monetary policy. His argument is simple and practical. He argues that politicians, for the most part, have proven themselves incapable of addressing the problem. He [...]

The back-and-forth between Michael Mandel and others over the importance of saving was already strange. His rebuttal to PGL from Angry Bear, however, is even stranger. The criticism from PGL read as follows: “An increase in government-sponsored R&D might be a very nice thing as Mandel suggests, but he seems to dodge the question as [...]

Thomas Schelling, in an analysis of coordination, described a situation in which two people wish to meet in New York City on a given day, but cannot communicate the time or place at which they should meet. At the time, he suggested that beneath the clock at Grand Central Station at noon would be an [...]

Last Thursday, Tyler Cowen posed an exam question for his macro class, consisting of a passage from a Michael Mandel column in Business Week, and the inquiry, “True, false, or uncertain?” The passage in question read as follows: “Let’s do the calculations. Over the past 10 years, the U.S. has run up an accumulated goods [...]

I actually gasped when I awakened this morning and saw this. Thomas Schelling, winner of half of this year’s Nobel Prize in Economics (note to the sticklers: yes, it is technically the “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel– it’s awarded by the Nobel Foundation, get over it), was the [...]

[This is the commentary promised earlier] I’ve come across the phrase “Economics is about people, not curves” several times, and each time those repeating it have taken it to mean something different. Some have used it in criticism of the way economics is taught, others seem to mean it as an attack on the Neoclassical [...]

With the quality of teaching in economics often so poor, it is good to see discussions of teaching methods that work. Robert Frank’s writing assignments force his students to explain a real-world story with economics, without hiding behind graphs and terminology. The ability he is developing in his students, to apply concepts to real-world situations [...]

The number one way to not prevent a shortage of something is to give people every reason to believe that the item won’t be there tomorrow, and then ask them not to stockpile it for themselves. Somebody please explain this to the Governor of Georgia. From CNN’s Rita coverage: “Ga. Gov. asks schools to close [...]