People are freaking out about AI. That’s never a good starting point for sensible policy. So we get weird ideas.One idea is to tax computer processing capabilities, sometimes called a “compute tax.” Andrew Yang is pushing it, so you know it
This week, I’d like to discuss two very different topics: state firework policies and university parking. Although the topics themselves seem to have nothing to do with one another, I think that the price theoretic aspects of these topics h
Two rocket companies combined to form a de facto monopoly. It was probably a good idea 🤷♂️So, a little context. In 2006, Boeing and Lockheed Martin combined their launch divisions in a joint venture into United Launch Alliance. That’s what
Any student of price theory will know of the theoretical possibility of an upward-sloping demand curve (when the price of the good goes up, the quantity demanded goes up). This type of good is called a “Giffen good.” What if demand isn’t do
There’s a popular argument that AI will do to human workers what tractors did to horses. Tractors could do what horses did. Horses became obsolete. AI can do what humans do. Therefore...And every major AI builder seems to agree that humans
In my previous two posts (here and here), I focused on the role of price theory in explaining drug use. One reason that I wrote those posts is that I wanted to illustrate that price theory has explanatory power beyond the standard examples.
This week’s newsletter originally appeared on Truth on the Market, a website full of scholarly commentary on law, economics, and more.A familiar concern in antitrust-adjacent debates goes like this: when a company such as Walmart grows larg
In my previous newsletter, I asked whether Narcan saves lives. The basic price theoretic point is that Narcan reduces the cost of using opioids. Thus, some of the reduction in cost accrues to drug users who will get more enjoyment from incr
Tyler Cowen has a new book, The Marginal Revolution: Rise and Decline, and the Pending AI Revolution. The book is much more wide-ranging, but at one point, he writes a eulogy for price theory. Maybe not dead exactly, but more like a disting
Re-post of a core Economic Forces idea that is worth repeatingEcon 101 is behind the times. No, I don’t mean because it’s too free-market or doesn’t include behavioral economics, feminist economics, game theory, or any of the other things e
Unless you have been living under a rock, you have probably heard about the tens of thousands of people dying each year as a result of opioid use/abuse. In response, policymakers have tried to find appropriate responses to reduce these type
Brent crude hit $118 a barrel today for obvious reasons: a supply shock. The Strait of Hormuz, through which roughly 20 percent of the world’s seaborne oil normally flows, has been closed since the U.S. and Israel struck Iran in late Februa
In the aftermath of the pandemic, there were certain political circles that seemed to blame the high rates of inflation on corporations, and in particular grocery stores. Brian and I wrote a lot about these arguments at the time. I must adm
Why has Europe slowed down relative to the US? I have my hobby horse about tech regulation and horrible antitrust laws, but I don’t think those are THE biggest reason. Instead, I agree with a recent piece by Pieter Garicano that points to l
Every few months, someone writes a viral post about how AI will destroy the economy. It looks like that’s just our lives now...This month it’s Citrini Research’s “THE 2028 GLOBAL INTELLIGENCE CRISIS” (yes, all caps, so you know it’s serious
Over the last week, there has been a lot of chatter on social media about replication (or lack thereof) of empirical studies in economics. This springs up from time to time where people note that this or that study is hard to replicate. Oth
The 1970s were a strange time, to say the least.Chicken farmers gassed, drowned, and suffocated roughly a million baby chicks. “It’s cheaper to drown ‘em than to put ‘em down and raise ‘em,” one Texas farmer explained. Dairy farmers slaught
Recently, Brian wrote a long post examining some rather provocative claims about AI and economic growth. The post is long, but worth reading in detail. At the same time, it is important to recognize the underlying purpose of the post. When
I see way too many Dave Ramsey videos online…His advice seems entirely hokey. Use cash envelopes. Grocery budget in one envelope, entertainment in another. When the envelope is empty, stop spending. Pay off your smallest debt first, regardl
It is common to hear the phrase: “you cannot put a price on that.” Sometimes the phrase is meant more as a normative statement. To put a price on particular things is considered verboten. Other times this phrase is meant to be taken literal