The Political Economist

Here is a map showing the service of Amtrak train company , America's government subsidized passenger railroad company. The map depicts Amtrak's stations across the US, where the size of the circle corresponds to the number of passengers circulating on the given station. This was taken from a summer blog at the Economist  (they got it from here ) where they questioned the justifiably of some of Amtrak's regular lines across the country when almost a third of their passengers use the service across only three cities (New York, Washington and Philadelphia).  The Economist concludes: "...Amtrak's long-haul routes (you can see them on the map as the tiny blue dots stretching across most of the country) are money pits . But America's bizarre constitutional structure, which gives outsized influence to states with small populations , creates an incentive for Amtrak to maintain unprofitable services that keep influential senators happy.   If its long-ha...

It's that time of the year again - the Nobel prize announcements. As always, the last in line is the Sveriges Riksbank Prize in Economic Sciences in Memory of Albert Nobel, or colloquially the Nobel prize in economics, awarded yesterday. This year the honorary recipient was Professor  Jean Tirole from Toulouse, France, one of the most cited economists in the World. He is only the third Frenchmen to receive the prize, first one since Maurice Allais in 1988. In addition, this ended an almost 15 year domination of US-based economists (at least one recipient each year was a US-based economist - they still dominate the field, as in every other science btw ). Also he's one of the rare economists who got the honor as a single recipient (which became particularly rare in the past 15-20 years). The award was given for his contributions in the "analysis of market power and regulation". Basically Tirole studied monopolies and oligopolies (since most industries are act...

International trade seems to be one of the most misunderstood areas of economics for the average layman (the leading position of the most misunderstood area of economics is still being held by monetary policy, and the international monetary system in general. Why, I'll never know). People like to simplify things in order to understand them, and by doing so they often look at things from a one-dimensional lens, very often succumbing to Hazlitt's economic fallacies of focusing policy solutions on one area alone without taking into consideration the widespread effect on all groups nor the long-term impact. I've written on international trade many times before, emphasizing its importance in wealth creation, and I've also written on the persistent mercantilist fallacy , where people can't seem to shake off the notion that exports are 'good' while imports are 'bad'. How ridiculous! Almost as ridiculous as claiming that selling is good while buying is...

Back to blogging after a short break. I recently came across an older, 2010 article from Scot Sumner on Econlog , where he discussed the neoliberal revolution that began in the late 1970s. A very good text, explaining first of all the confusion over the term 'liberal' and what 'neoliberal' stands for (it "combines the free markets of classical liberalism with the income transfers of modern liberalism"), the confusion of associating neoliberal policies with right-wing political views (since most European countries that have actually been the best neoliberal reformers were social-democratic Nordic countries like Denmark - all hail the Nordic model !), to the very substantial evidence on how the most adamant neoliberal reformers quickly caught up the lost growth of the previous decades, particularly in terms of income p/c. From Britain's success in Thatcher times (where it grew much faster in the 80-ies and the 90-ies than most other European economies), to...