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I was glad that James discussed a bunch of the literature that uses habits and habit persistence yesterday. I have run into the idea of habit persistence in consumption before while doing macroeconomic modeling, and it was good to see him bring it back to the observed phenomenon of reference dependence in individuals – as […]
I think QE was necessary, and I think the Fed has done a good job implementing it. But one thing we have to be honest about is that it WILL, if it is done right, lead to inflation past the target at some point in the future. There are many ways we can view the […]
Just having a look at the speech from Labour on savings. One bit that has caught my eye so far is: The Government collected tax, which is compulsory, and saved it for the future. Now this is true, tax is compulsory. And one way of looking at “compulsory savings” is as an increase in the […]
With alcohol regulation we decided to remember that it is the external cost that matters. Now one reason private costs might matter in terms of regulation is internalities. There is a discussion of this with regards to boozing here. This brings me to the idea of “addiction” I discovered from this article. What is addiction, […]
The Freakonomics blog provides another perplexing picture (the last one was discussed here). This time we have a situation where it costs LESS to buy two of something then to buy just 1. So they are PAYING people to take the second unit. What gives? The way I see it, there are two likely explanations: […]
While working on the Dom Post article I was given a few questions I might get. I quickly tried to rope together some incredibly average answers. I am going to post them here so I don’t lose them 😛