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Brand-name drugs in the United States cost more than in other countries. The primary reason is that the US has a sort-of-constrained but pretty free market in setting drug prices, while in other countries it is common for the government or national health service to give pharmaceutical companies what amounts to a take-it-or-leave-it offer: charge … Continue reading US Drug Prices: Higher for Brand Names, Lower for Generics
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When most people think of “experiments,” they think of test tubes and telescopes, of Petri dishes and Bunsen burners. But the physical apparatus is not central to what an “experiment” means. Instead, what matters is the ability to specify different conditions–and then to observe how the differences in the underlying conditions alter the outcomes. When … Continue reading The Arrival of Field Experiments in Economics
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The nature of globalization is clearly shifting, but it’s not clear to me that the overall level is diminishing. It does seem true the level of goods moving across international borders is rising much more slowly–or even not at all. However, the level of services being performed across international borders is rising substantially, and movements … Continue reading How Can One Tell if Openness to Trade Helps Economic Growth?
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Student loan debt took off around the year 2000. Adam Looney and Constantine Yanellis tell the story in “What Went Wrong with Federal Student Loans?” (Journal of Economic Perspectives, Summer 2024, pp. 209-236). They point out: “Between 2000 and 2020, the total number of Americans owing federal student loans more than doubled from 21 million … Continue reading Student Loans: Not Just About Attending College
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I wrote a decade ago about the Double Irish Dutch Sandwich, a strategy for corporations to evade taxes that was widespread and large-scale enough to come to the attention of the International Monetary Fund. But due to various changes in national and international tax agreements, the strategy seems to have faded substantially. Ana Maria Santacreu … Continue reading The Double Irish Dutch Sandwich: End of a Tax Evasion Strategy
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Total enrollment in degree-granting US institutions of higher education took a big jump in the first decade of the 21st century, but has levelled out or even declined a bit since then. According to the National Center for Education Statistics, total enrollment went from 15.3 million in 2000 to 21.0 million in 2010–an increase of … Continue reading Foreign Students in US Higher Education
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Over time, a rising US standard of living is driven by productivity growth. Michael Peters succinctly describes the problem in “America Must Rediscover Its Dynamism” (Finance & Development, September 2024). He writes: The US economy has a multitrillion-dollar problem. It's the dramatic slowdown in productivity growth over the past couple of decades. Between 1947 and … Continue reading US Productivity Growth: Downside, Upside
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Technological progress in the production of lab-grown diamonds keeps improving, while technological progress in production of natural diamonds does not. Javid Lakha provides an overview of both the history of lab-grown diamonds and the implications for everything from jewelry to industrial cutting equipment in “Lab-Grown Diamonds” (Works in Progress, Issue 16, August 30, 2024). Here, … Continue reading Lab-Grown Diamonds: An Origin Story
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There was a time, not all that long ago, when the primary options for making everyday payments were cash and checks. Those times are past. Julian Morris and Ben Sperry discuss the tradeoffs and consequences in “The Cost of Payments: A Review,” (International Center for Law & Economics Working Paper, August 28, 2024). They begin with … Continue reading Going Cashless: Benefits and Costs
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Five years ago, the Institute for Fiscal Studies, with support from the Nuffield Foundation, launched the IFS Deaton Review. It would be difficult to overstate the energy and scope of this effort. As a journal editor, I am frankly awed by it. Two big pieces of output are now available. First, there is an “Evidence … Continue reading Everything You Want To Know about Inequality: The IFS Deaton Review
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Jon Hartley interviews Greg Mankiw on topics including New Keynesian macroeconomics, growth, and economic policy more broadly at his Capitalism and Freedom website (August 20, 2024, video and transcript available). Here are a few of the comments that caught my eye. On big models and small models in studying the macroeconomy: [O]n the issue of … Continue reading Interview with Greg Mankiw: New Keynesian Macro, Growth, and Economic Policy
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Today is the Labor Day holiday in the United States. Our jobs are one of the ways in which we contribute to society as a whole. In this spirit, I pass along some thoughts from the 2020 book by Michael Sandel, The Tyranny of Merit. Toward the end of the book (pp. 206-213), he raises … Continue reading Contributive Justice
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I sometimes become exasperated when progress toward clean energy is measured by, say, the amount of a government tax credit for buying electric vehicles, or the the announced dates for when a state or city will reach zero carbon emissions, or whether an international agreement is signed or not. My annoyance is that while policy … Continue reading Physical Realities of Moving to Cleaner Energy
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Simon Newcomb (1835-1909) is largely unknown today, but he was a highly prominent economist back in the day: as one example, he was active in the disputes that led to the founding of the American Economic Association back in 1885. In July 1893, he published an essay on “The Problem of Economic Education” for the … Continue reading Simon Newcomb on Public Opinions and Economic Insights
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Through the Trump and Biden administrations, it has been a policy goal to reduce imports from the US to China. While US imports China have declined, EU imports from China have been on the rise. Mary E. Lovely and Jing Yan tell the story in “While the US and China decouple, the EU and China deepen trade … Continue reading The US Decouples from China, While the EU Tightens Ties
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