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29 days

The Iron Law of Megaprojects vs. the Hiding Hand Principle

The next time you read about a "bridge to nowhere" or a giant infrastructure project that started and then stalled, you may wish to mutter to yourself to the "Iron Law of Megaprojects: Over budget, over time, over and over again." It's a coinage of Bent Flyvbjerg. For an overview of his arguments, you can check this Cato Policy Report (January 2017), which in turn is based on this article from the Project Management Journal (April/May 2014). In the Cato report, Flyvbjerg writes:

1 month

Tradeoffs of Free Higher Education: Finland, South Korea, England, United States

All goods and service have both a cost of production and a price paid by the consumer. If the government wishes to do so, it can raise revenues through taxing or borrowing to pay for the cost of production for certain goods and services, and thus allow the consumer to receive the good or service for "free." Many high-income countries around the world subsidize part or most of the cost of higher education in this way. 

1 month

What the IMF Thinks about China's Exchange Rate and Trade Balance

A couple of weeks ago, US Treasury Secretary Steven Mnuchin announced his finding that China was manipulating its currency to keep it unfairly low, and further announced that he would be taking the issue up with the International Monetary Fund. I offered some of my own views on this announcement when it happened. But what's interesting here is not what I think, or even what Mnuchin thinks, but what the IMF thinks.

1 month

Taxing Sugar-Sweetened Beverages

Jurisdictions around the world have been implementing taxes on sugar-sweetened beverages. Here's a map. 

1 month

Limits for Corporate Bigness on Acquisitions, Patents, and Politics

The United States, like most big countries, has an ambivalent view of big business. When big firms are making high profits, we are concerned that they are out-of-control and exploitative. If big firms are performing poorly, with losses and layoffs, we argue over how or whether to rescue them. (Remember the auto company bailouts in 2009?) Might it be possible to strike a more lasting balance?

1 month

Innovation Policy: Federal Support for R&D Falls as its Importance Rises

One of those things that "everyone knows" is that continued technological progress is vital to the continued success of the US economy, not just in terms of GDP growth (although that matters) but also for major social issues like providing quality health care and education in a cost-effective manner, addressing environmental dangers including climate change, and in other ways. Another thing that "everyone knows" is that research and development spending is an important part of generating new technology. But total US spending on R&D as a share of GDP has been nearly flat for decades, and government spending on R&D as a share of GDP has declined over time.

1 month

China and Currency Manipulation

Treasury Secretary Steve Mnuchin has "determined that China is a Currency Manipulator" (with capital letters in the press release). The overall claim is that one major reason for China's large trade surpluses is that the country is keeping its exchange rate too low. This low exchange rate makes China's exports cheaper to the rest of the world, while also making foreign products more expensive in Beijing, thus creating China's trade surplus.