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Spot the Unintended Consequences

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Government enacts a price floor. What could possibly go wrong?

I hope my students can analyze this story using several of the concepts we’ve covered so far in class: segmented and non-segmented markets, incentives, binding and non-binding price floors, tax incidence, etc.

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But, the Narrative…

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Here’s another great example of “what everyone knows” not being supported by hard data. At a minimum, the idea that Chinese companies simply steal technology or force its transfer lacks nuance. How many of my students would guess that China may be the second largest licensee of  technology?

Export Bans as Price Control

March 30, 2017 Leave a comment

A great post by Alex Tabbarok: A Visit to the Lasalgaon Onion Market. In class today we’ll discuss this:

When prices are high the government bans exports and blames farmers for hoarding (when prices are low as is true today, exports are allowed).

When We Get to Oligopoly…

October 13, 2016 Leave a comment

…remind me, students, of this news item. It’s a great example of the difficulty of getting members of a cartel to stick to their agreements to limit production in order to maximize total profits of the group.

Following yesterday’s latest IEA report which showed that OPEC production had hit an all time high, this morning OPEC released its own estimate of production by OPEC member nations for September and, not surprisingly, the latest report showed that in the month OPEC was supposed to be set on “cutting” production, the 14-nation group produced a whopping 33.39 million b/d crude in Sept., up 220k b/d from August.

I, Pencil

September 12, 2016 1 comment

A great video introducing economics from another prespective–that of wonder at the way markets actually work to deliver goods of great complexity with great efficiency.

I plan to show it in my Introduction to Microeconomics class this week.

Leading African Entreprenuers

September 12, 2016 Leave a comment

A student called my attention to the Ethiopian commodities exchange market and Eleni Gabre-Madhin’s work there (she’s since left to start a new venture).

Here’s a link to some TEDx talks by other African entrepreneurs my students may find interesting.

Categories: International Trade

Brexit Commentary

June 30, 2016 Leave a comment

 

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Though I am generally quite positive towards freer trade, economic ties as a way to secure peace by making war too expensive for elites, and freer movement of people across borders, I think it’s a mistake to think Brexit will have catastrophic effects.

Some thoughts:

(1) If economic specialization is good, why isn’t political and cultural specialization also beneficial? Suppose Germany stays very open to immigration and the UK becomes more closed. Isn’t this a good experiment on the economic and cultural impact of more (or less) open borders? Shouldn’t we have a little humility about what we do and do not know with regards to the impact of freer movement of labor?

(2) I suspect the UK will become very focused on making trade deals with a number of trading partners besides the EU. Feels like competition–of a positive kind–to me.

(3) This may help those within the EU who want to focus more on trade and economics and less on political union to gain clout. The EU people are smart and will make adjustments.

It’s really out of my area of expertise, though. Here’s some commentary by people smarter than me:

Paul Krugman

Tyler Cowen

Brexit impact on China: , but see this from an unnamed APF stringer.

 

Categories: International Trade