Thursday, February 25, 2010

Great Example of How Subsidies Influence Choices,...

can distort the market, and have unintended consequences. I saw this story a couple days ago in The Wall Street Journal. If you're teaching macro and getting into fiscal policy, this can make a good case study. Short-term goals were noble and may even have been appropriate. Unfortunately, as we learn in political economy, once subsidies and preferences are created, it's very hard to get rid of them.

(Good video and slideshow, too.) I welcome your comments.

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