Categorized Archive
Here you can find all the articles we have written with a short description of what they cover, categorized by topic.
Inflation
Did The Federal Reserve Make a Mistake? (August 15, 2024) – a higher unemployment reading has stoked recession fears and led many to think the Federal Reserve made a mistake with keeping interest rates high. Fortunately, closer inspection of the data suggests no mistake was made.
Inflation: Distorted by the Past (May 19, 2024) – misinterpretations of what CPI and PCE measure keeps us unnecessarily concerned about the future trajectory of inflation. Understanding how these measures are created can help us understand the economic situation.
Inflation – The Story of 2023 (January 1, 2024) – the biggest economic story of 2023 in the US was the fall in the inflation rate. What caused the fall and why certain measures may have been slightly over-stating inflation.
The End of Inflation in the US? (June 25, 2023) – after the inflationary surge that occurred during 2021-2023, the June 2023 inflation data suggested that US inflation has come back down to the 2% target. Did it come down due to the Federal Reserve interest rate hiking policy or was it driven by the normalization of supply chains?
Correcting Economic Understanding: "Greedflation" (June 28, 2023) – “greedflation”, the idea that increased profits are driving the inflation surge, is being heavily debated. There is truth to both sides of the argument.
Causes of Current Inflation (December 18, 2022) – what was behind the inflationary surge during the Covid pandemic?
Wages and Inflation (December 4, 2022) – to what extent do wages cause inflation?
Inflation and Expectations (March 1, 2023) – how should we think about the recent inflationary spike and what needs to happen for it to come down.
(Un)intuitive Inflation (May 10, 2023) – what does economic theory tell us about how inflation is linked to the level of real marginal cost, and how supply chains issues, via real marginal cost, impact the inflation rate.
Housing
An Illustrative Model of Housing Prices (March 17, 2024) – how to build a model of what determines house prices on a national scale and matches the observed data and fact patterns.
Housing – Part 1: A Unique Asset (January 15, 2024) – housing provides both a service (housing services) and is also a store of value (an asset). There two facets make housing quite unique, resulting in complex house price dynamics.
Housing – Part 2: Price Dynamics (January 22, 2024) – government policies that support house buyers might not make housing more affordable due to limited land. “A house is a box that definitely depreciates sitting on a piece of land that may or may not appreciate.”
Housing – Supply Side and Affordability (February 4, 2024) – to improve housing affordability, we need policies that ‘increase land’. Public transit and remote work might just do it. Plus – which cities are actually affordable may surprise you.
Housing – Will deregulation fix everything? (April 9, 2023) – would removing zoning laws and housing regulations lead to an increase in housing supply and improve housing affordability.
Housing and Public Transit in Cities (April 23, 2023) – how public transit can improve housing affordability, while making everyone better off, including current homeowners.
Policy
Tariffs, Tariffs… (Electoral Issue Series – November 4, 2024) – tariffs are a bad economic tool. However, there may be one scenario in which they can work – correcting global and domestic carbon emissions.
Minimum Wages (Electoral Issue Series – October 30, 2024) – minimum wage laws have been criticized on theoretical grounds that they reduce employment. But research suggests that not only have they not done that, worker welfare does improve at a limited cost.
Immigration (Electoral Issue Series – October 27, 2024) – improving legal immigration channels is more cost-effective at reducing unauthorized immigration than additional border enforcement.
Investing in the Future – Child Tax Credit (Electoral Issue Series – September 7, 2024) – supporting families by providing a child tax credit (or a direct cash transfer) has significant pro-growth impacts for a society, as human capital significantly increases.
Monopolies and Antitrust Enforcement (November 20, 2023) – with news of the Federal Trade Commission suing Amazon for anti-competitive practices, economic research suggests that such lawsuits typically improve overall welfare.
Unions, Strike Action and the Economy (November 14, 2023) – with significant union organizing and strike action occurring in the US, economic research suggests that unions do impact all workers, not just unionized ones. Moreover, unionization threats also have an impact.
Industrial Policy – An Unspoken Issue (August 31, 2023) – many countries are turning towards industrial policy. But few discuss the issue of what will happen to workers once the subsidies to the manufacturing sector end.
Work Requirements (May 29, 2023) – work requirements are considered to be a helpful policy to incentivize people to work. Empirically, the data shows that this is not the case. It does not increase participation in the workforce and hurts the most vulnerable individuals.
To Compete or Non-Compete (April 30, 2023) – why non-compete clauses do not solve any issues, but only create costs.
Early Child Investment - Child Tax Credit (January 15, 2023) – the benefits of the expanded child tax credit to society.
When Free Trade isn’t Free (February 20, 2023) – how trade issues extend beyond tariffs and quotas and into regulations.
Community Civilian Interventions (June 12, 2023) – cities have always been interested in improving safety in neighborhoods. Civilian government interventions have been proposed as a solution instead of police. However, civilian interventions work best if local government presence is strong.
Impacts of Student Debt (March 7, 2023) – how does student debt adversely impact choices by individuals and why it is important for taxpayers to take into account that these choices have real costs for the economy.
Economic Impacts of Student Loan Forgiveness (November 27, 2022) – the Biden administration has proposed forgiving up to $10,000 of student loans for individuals making less than $125,000. Economic research can tell us what are the likely benefits and costs of such a policy.
The True Value of the Infrastructure Bill (November 20, 2022) – the US passed the Infrastructure and Jobs Act, which has significantly increased infrastructure spending. How impactful will it be and why more is needed.
News
Revisiting Economic Data – 'Vibecession’ (November 27, 2024) – economic data shows the economy is doing well, but people think otherwise. To reconcile these two facts, it is worth looking at income after including all taxes and transfers.
News: The FTC Bans Non-Competes (May 4, 2024) – On April 23, 2024, the Federal Trade Commission (FTC) banned non-competes, which would have significant positive economic impacts.
‘Your pay is still - not - going up too fast’ (March 3, 2024) – the Economist posted a controversial article arguing that wages are driving inflation. This is, however, not the case, as wages are growing below the rate of inflation + productivity growth. If anything, wages are disinflationary.
News: The US Credit Downgrade (August 10, 2023) – on August 2nd, 2023, Fitch downgraded the credit rating of the US. What does it mean and what does economics tells us about the US debt burden.
High Profile Layoffs (February 14, 2023) – how the recent layoffs in the tech sector will affect the wider economy.
Recession Talk (May 21, 2023) – news and social media are talking a lot about a recession, but the economy has been performing very well. However, it turns out that not everyone has been benefiting – and this time it was the high income individuals that saw real income declines.
Silicon Valley Bank - A Quick Demise (March 12, 2023) – in March 2023, Silicon Valley Bank collapsed after a bank-run. What are bank-runs and how did that happen?
Research
Higher Education – Is It Worth It? (December 10, 2024) – do the extra years of schooling at college increase peoples’ skills or is college just an expensive signal? A recent study suggests it’s the former.
Holidays and Gift Giving (December 2, 2024) – gift giving is a contentious topic on economics – is it valuable or a waste of money. The evidence points to the former.
Coffee and Innovation (November 17, 2024) – increasing ‘third-spaces’ (places outside of home or an office) such as coffee shops appears to increase entrepreneurship and innovation.
Can You Handle the Heat (July 22, 2024) – higher temperatures have been found to reduce economic output, increase inequality, as well as increase aggressive behavior. This is a ‘hidden’ cost of rising global temperatures.
More Roads – Same Traffic (June 17, 2024) – expanding roads is often suggested as a solution to traffic congestion. Research shows it isn’t.
Work from Home Will Have a Bigger Impact on the Economy than AI (April 19, 2024) – work from home will potentially have a very large economic impact, as it increases labor participation and investment in children, as well as alters where people live.
How the Internet is Changing Economics (December 3, 2023) – the Internet has had a meaningful impact on certain economic relationships that used to hold true in the past. The creation of new markets and products used to be considered a positive, but findings regarding social media suggest otherwise. Separately, online shopping may have made us less price-sensitive, impacting inflation dynamics.
Discrimination in Real Estate (September 17, 2023) – unlike explicit discrimination, statistical discrimination is less talked about. However, it has significant impacts on outcomes for people impacted by it. Real estate agents, often unaware of their own statistical discrimination, end up perpetuating outcomes for minorities.
Marriage Preferences and Gender Outcomes (March 26, 2023) – how partner preferences impact the glass ceiling.
New Research Highlights: January 2023 (January 29, 2023) – how does personal finance advice stack against economic theory; why are there fewer creative patents; what are the impacts of right to carry gun laws.
Christmas Holidays and Gift Giving (December 25, 2022) – gift giving has been studied a lot. Typically, every year there are articles pointing out that gift giving is a net-negative action. What does economic research actually have to tells us about this, and why we should continue to give gifts.
New Research Highlights: December 2022 (December 11, 2022) – tracking inequality in real-time; improving tax collection via sending out warnings; why venture capitalists don’t always get things right.
Correcting Economic Understanding
How We Misinterpret Electoral Polls (August 4, 2024) – polls are often interpreted as forecasts (i.e. candidate A will win the election by 3 points), when really they should be used as part of a model to forecast elections.
Correcting Statements on Inflation and Inequality (February 18, 2024) – a statement by Federal Reserve Governor Waller appears to incorrectly describe how prices and inflation responds to supply shocks.
Correcting Economic Understanding of US Senators (March 19, 2023) – during the Senate hearing with Federal Reserve Chairman Jerome Powell, several Senators made questionable economic statements.
Correcting Economic Understanding – Banning Ukrainian Imports (May 14, 2023) – several Eastern European countries banned imports of Ukrainian grain. Why this policy will have no impact on the grain price and the profits of farmers in the Eastern European countries.
Economic Concepts
Why We Demand Bad Policy (Electoral Issue Series – September 23, 2024) – how voters, by mis-judging other people’s actions, may often choose to vote on policies that are sub-optimal to them and the wider society.
Economic Brain Teasers (August 20, 2024) – economic brain teasers can be helpful to clarify ideas, but it is important to be clear about the assumptions being made. Using them for ‘gotcha’ style questions is counterproductive.
How Economists and Non-Economists Talk Past Each Other (June 1, 2024) – one economic assumption - “ceteris paribus” (holding all else constant) - is embedded in almost all economic models. This assumptions is the cause of many disagreements between economists and non-economists.
Current Equilibria May Impede Progress (May 12, 2024) – societies can get stuck in a bad equilibrium without realizing. These outcomes can be very costly and g1etting out of them may require outside intervention.
Don’t Tie Yourself to a Number (March 26, 2024) - measurements, on their own, are often not insightful. It is important to understand what a ‘measure’ tries to capture and how we should interpret the values coming from a particular measurement reading.
Surveys, Assumptions and Understanding Housing Supply (October 14, 2023) - how a Financial Times opinion piece discusses research claiming people do not understand the economics of housing supply. Under closer scrutiny, it is not as clear cut as it may seem.
Repeat After Me: Build Houses, But Use Good Economics (October 13, 2023) – how a Financial Times opinion piece incorrectly interprets certain data and graphs regarding the impact of changes in upzoning policies.
Survivorship Bias and Opinions (September 24, 2023) – we are typically unaware of how survivorship bias can influence our perception of the world. Not only do we often see perspectives that ‘survived’, but we also make assumptions from our own experiences.
Good Models - Good Ideas (July 30, 2023) – to think through the consequences of economic policies, it it important to have a model. However, for a model to be good, it needs to have enough flexibility to allow for a variety of, and sometimes opposite, outcomes.
The Work from Home Illusion: Is It? (July 15, 2023) – the Economist covered several work from home studies. The conclusions the Economist drew from them, however, were quite wrong. What did these studies actually say, and why work from home might be the optimal form of work.
Probabilities in Medicine and More (June 18, 2023) – human minds are not built to think in probabilities, especially when outcomes there is significant uncertainty. How can Bayes’ Rule help us think through potential outcomes.
ChatGPT and AI - Predictions on Labor and the Macroeconomy (April 3, 2023) – with many predicting AI technology will revolutionize work, how can we use economic models and frameworks to think through the implications of this new technology, and why many predictions in the media are contradictory.
The usefulness of the GDP measure (February 7, 2023) – GDP is very often the focus of countries and businesses. What are its limitations and why institutions and economists are considering designing a new measure called “Beyond” GDP.
Government Debt - Should we worry about it? (January 23, 2023) – many are concerned that countries have very high government debt. Why we should focus on debt as a ‘tool’ for conducting inter-generational policy and what are sustainable levels of debt.
Nature of Budgets (January 10, 2023) – why the form of budget is not a harmless choice.
Looking Back in the New Year (January 1, 2023) – what can the Lucas Critique tell us about judging our past decisions.