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Kling's Corner

Predictable Irrationality and the Crisis of 2008

A decade after the financial crisis of 2008 and its aftermath, economists are still grappling with its nature and significance. An important recent contribution is A Crisis of Beliefs, by Nicola Gennaioli and Andrei Shleifer (henceforth GS).1 They tell the story this way (page 7): Homebuyers were unrealistically optimistic about future home price growth. Investors .. MORE

Article

Why Did Armen Alchian Have to Teach Economists About Property Rights?

Armen Alchian (1914-2013) was an economist’s economist. How his mind worked and why it so impressed his peers is illustrated perfectly by an episode from his time at the Rand Corporation in the 1950s as the Cold War was ramping up. Both the United States and Soviet nuclear programs were cloaked in secrecy. As the .. MORE

Book Review, Kling's Corner

Drop Your Intellectual Defenses

So if our instincts undervalue truth, that’s not surprising—our instincts evolved in a different world, one better suited to the soldier. Increasingly, our world is becoming one that rewards the ability to see clearly, especially in the long run; a world in which your happiness isn’t nearly as dependent on your ability to accommodate yourself .. MORE

Most Recent

Finance: stocks, options, etc.

Peace for Our Time?

By Scott Sumner

Economic and Political Philosophy

Fifty Percent Plus One Is Not a License to Kill

By Pierre Lemieux

Energy, Environment, Resources

Find the Math Error

By David Henderson

Microeconomics

The Importance of Diminishing Returns

By Scott Sumner

Economic Education

EconLog Price Theory: Consumer Purchasing

By Bryan Cutsinger

Books: Reviews and Suggested Readings

Fine Tuning Policy

By Kevin Corcoran

Cost-benefit Analysis

The “problem” of Induced Demand

By Scott Sumner

EconTalk

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econtalk-extra

Algorithmic Education

Ian Leslie’s work focuses on human behavior. He has appeared on two earlier episodes of EconTalk (Ian Leslie on Curiosity and Ian Leslie on Conflicted). In this episode, host Russ Roberts and Leslie continue the discussion of human behavior, discussing Leslie’s thesis that AI is already changing how we think. It isn’t just the machines .. MORE

econtalk-extra

How to Train Your Truffle Dog

Have you ever been on a truffle hunt? Do you savor the memories of truffles shaved over your pasta or risotto? Are you a dog lover? If any of these apply, then this episode was made for YOU! EconTalk host Russ Roberts welcomed author Rowan Jacobsen to talk about his book, Truffle Hound. Jacobsen spent .. MORE

EconLog

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Energy, Environment, Resources

Find the Math Error

Bryan Cutsinger has been doing an excellent job of presenting economic problems to solve. Sometimes, to do basic economics, you need to know basic math. Here’s a statement from research scientist Carey King in “Why Energy Efficiency Might Not Cut Emissions As Much as You Think,” Wall Street Journal, November 11, 2024 (print edition): The .. MORE

Economic Education

We’re Number 4; We’re Number 4!

  4. Econ Log EconLog, run by the Library of Economics and Liberty, includes various contributors sharing ideas on economic theory, public policy, and classical liberal views. This blog offers a place for lively debate and different opinions. (bold in original) This is from Anja Finegan, “The Top Economics Blogs to Follow in 2025,” inomics.com, October 7, 2024. Finegan .. MORE

LIBERTY CLASSICS SERIES

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continued relevance of our classic titles.

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Book Titles

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Capital and Its Structure

By Ludwig M. Lachmann

For a long time now the theory of capital has been under a cloud. Twenty years ago, when Professor Knight launched his attack on the capital theories of Boehm-Bawerk and Wicksell, there opened a controversy which continued for years on both sides of the Atlantic. Today very little is heard of all this. The centre .. MORE

The Society of To-morrow: A Forecast of Its Political and Economic Organisation

By Gustave de Molinari

It is fortunate for the modern world that there is a considerable number of persons who have time, inclination, and ability to inquire how human communities may best secure a prosperous existence and ultimate salvation from disasters or even annihilation. It is fortunate that the necessity is so widely felt of making such inquiries, and .. MORE

Book Reviews and Suggested Readings

From Here to Serenity: How Public Choice Makes Me Less Cynical

By Art Carden

After James M. Buchanan won the Nobel Prize, some people suggested public choice was too obvious for a Nobel. To others, it was wrong. Some said it was both. Others claimed that public choice is immoral: after all, Buchanan wrote from the “homely observation” that people respond to incentives and pursue their interests in the .. MORE

Vera Smith: The Contrarian View

By Leonidas Zelmanovitz

In 1936, seven years into the Great Depression, John Maynard Keynes’ General Theory of Employment, Interest, and Money was published. The culmination of Keynes’ theorizing in support of policies of manipulation of money and credit by the state in order to achieve macroeconomic equilibrium came with that book. A central bank, in that context, became .. MORE

Conversations

VIDEO

An Animal That Trades

A five-part short video series on the life and contemporary relevance of Adam Smith. This video series, produced by AdamSmithWorks, can be watch as a full 38-minute feature, or in five thematic, classroom-friendly chunks. To access all, click here.   Below are some discussion prompts related to this video:   Part 1: The Invisible Hand .. MORE

VIDEO

A Conversation with Ronald H. Coase

Nobel laureate Ronald H. Coase (1910-2013) was recorded in 2001 in an extended video now available to the public. Coase’s articles, “The Problem of Social Cost” and “The Nature of the Firm” are among the most important and most often cited works in the whole of economic literature. Coase recounts how he tried to encourage .. MORE

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Conversations with some of the most original thinkers of our time

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Guides

College Economics Topics

Supplementary materials for popular college textbooks used in courses in the Principles of Economics, Microeconomics, Price Theory, and Macroeconomics are suggested by topic.

Economist Biographies

From the Concise Encyclopedia of Economics

Economic Regulation, Government Policy

Trucking Deregulation

Regulation The federal government has been regulating prices and competition in interstate transportation ever since Congress created the Interstate Commerce Commission (ICC) to oversee the railroad industry in 1887. Truckers were brought under the control of the ICC in 1935 after persistent lobbying by state regulators, the ICC itself, and especially, the railroads, which had .. MORE

Basic Concepts, Macroeconomics

Recessions

One of the most popular definitions of recessions is that they are periods when real gross national product (GNP) has declined for at least two consecutive quarters. In 1990, real GNP declined between the third and fourth quarters and again between the fourth quarter of 1990 and the first quarter of 1991. Hence, there is .. MORE

Economics of Legal Issues, Government Policy

Bankruptcy

Bankruptcy is common in America today. Notwithstanding two decades of largely uninterrupted economic growth, the annual bankruptcy filing rate has quintupled, topping 1.5 million individuals annually. Recent years also have seen several of the largest and most expensive corporate bankruptcies in history. This confluence of skyrocketing personal bankruptcies in a period of prosperity, an increasingly .. MORE

Quotes

Despite the coercion of government, markets are irrepressible because they express the elemental urge of ordinary people to come together as buyers and sellers. “Corrigible Capitalism, Incorrigible Socialism”

-Arthur Seldon

Let us suppose, therefore, that the government is entirely at one with the people, and never thinks of exerting any power of coercion unless in agreement with what it conceives to be their voice. But I deny the right of the people to exercise such coercion, either by themselves or by their government. The power ...

-John Stuart Mill Full Quote >>

We live together because social organization provides the efficient means of achieving our individual objectives and not because society offers us a means of arriving at some transcendental common bliss. Politics is a process of compromising our differences, and we differ as to desired collective objectives just as we do over baskets of ordinary consumption ...

-James M. Buchanan Full Quote >>