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9 days

Why Economists Usually Oppose New Light Rail and Subways

When it comes to urban mass transit, economists often find themselves arguing that, the ratio of benefits to costs in most is far better for buses than for rail-based system--unless there is a densely populated urban core where nearly-full trains can run a very frequent intervals. Matthew Turner explains why in "Local Transportation Policy and Economic Opportunity," written for the Hamilton Project at the Brookings Institution (January 31, 2019).

14 days

Some Economic Consequences of the Near-Extinction of the Buffalo

The American buffalo population declined gradually through much of the 19th century; for example, they were almost entirely gone from the area east of the Mississippi River by the 1830s. But the near-extinction of the buffalo happened in a rush of about a decade, with a decline from 10-15 million in the early 1870s to only a few hundred by the late 1880s. Economic research from a few years ago suggests that the driving force was an 1872 innovation in tanning technology which happened in Europe, and an associated strong demand in Europe for buffalo hides. The 19th century buffalo herds were endangered by many factors, but it was pressure from globalization that drove them to near-extinction.

16 days

Back To Fundamentals

If we look at the list of key macroeconomic data published in recent weeks, we can not use a better definition than “disappointing”.

20 days

The Chinese Economic Slowdown May Benefit Canada

In recent months, analysts and market commentators have voiced concerns about a slowdown in the Chinese economy. The general view is that growth significantly below the current level of 6 per cent to 6.5 per cent would be bad for the global economy, posing the risk of modest deflation or even becoming a drag on economies around the world – legitimate concerns.

21 days

From What Direction is the Next Recession Coming?

If you were learning about the causes of post-World War II US recessions 20 years ago, the standard chain of events went like this: As the economy goes into an upswing, wage and price inflation starts to rise. The Federal Reserve recognizes that rising inflation isn't a sign of healthy growth, and raises interest rates. In often-used phrase, it's the job of the Federal Reserve to order that "the punch bowl removed just when the party was really warming up." The higher interest rates dampen inflation, but also lead to recession. The clear implication from this earlier line of thought is that recessions don't occur just because a recovery has gone on for a long time: instead, recessions are caused when the Fed decides to dampen inflation. For example, here's eminent economist Rudiger Dornbusch (and co-author of one of the preeminent macroeconomics textbooks of the time) writing back in 1997:

22 days

The Eternal Majority Against the Way Things Are: Brexit, Health Care & Socialism

It seems as if there's always a majority against the way things are. In a world full of problems and issues, how could it be otherwise? It's why politicians are always calling for "change," which strikes me as a slogan that is appealing and concealing in equal measure. Because the real-world problem that arises is when those who are united in their opposition to the way things, and united in favor of "change," need to offer an actual alternative of their own. 

25 days

Universal Basic Income: Preliminary Results from the Finnish Experiment

The big selling points for a universal basic income are simplicity and work incentives. The simplicity arises because with a universal basic income, there are no qualifications to satisfy or forms to fill out. People just receive it, regardless of factors like income levels or whether they have a job. There are not bureaucratic costs of determining eligibility, and no stigma of applying for such benefits or in receiving them.

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