James Buchanan (1919 - 2013)

Economist James Buchanan has passed away.  Buchanan, along with Gordon Tullock, won the Nobel Prize for Economics in 1986 and is known for his work on public choice theory.

You can read his Nobel Prize lecture here.

I had several opportunities to hear Dr. Buchanan speak over the last few years. I was always struck by his brilliance and clarity of thought. I count myself among those fortunate enough to have come to know him and to learn from him.

Choice

It's early in the semester and many of us who are teaching principles or survey courses are either just into choice or only recently moved on. Here's a great article from today's edition of The Wall Street Journal that sets up a choice that is sure to promote discussion.

Read it through and share what you and/or your students came up with.

Self-interest vs. Social Interest

Courtesy of Wondermark.
http://wondermark.com/842/

Gains from Trade

Our natural propensity to "truck and barter" as Adam Smith would say:
http://www.gocomics.com/frankandernest/2012/04/30
(HT to Greg Mankiw)

Non-Price Determinants of Demand

This is not appropriate for use in high schools. However, those of you who teach at the college or university level may find this helpful.  Econgirl at EconomistsDoItWithModels has a great illustration of non-price determinants of demand with the help of "the most interesting man in the world."

Sometimes the Simplest Answers Are the Best

If you discuss the Chevy Volt with your students, you might want to use this. (HT to Carpe Diem.)

Abbot and Costello Explain Unemployment

Greg Mankiw posts a great piece from a colleague at the University of Chicago.

Generation Gap Alert: I just talked about this with my freshmen at one of the universities where I teach. None of them knew the Abbott & Costello routine "Who's on First?"  Consequently, you may want to skip this or show your students this clip first.

The Economics of Valentines Day

You may want to check out these two links (HT to Carpe Diem):

http://www.youtube.com/watch?v=kDbcboJwuPc

http://fosslien.com/heart/

Economic Systems and Institutions

First, I know it's been a long time between posts - life isn't always what we want. I frequently come across items that should be brought to your attention. But due to other factors, I have to choose. It seems opportunity cost is an operative concept.

I don't know how many of you spend time discussing economic institutions and systems.  While many textbooks seem to bypass the subject or give it short shrift, I always try to spend at least one class period discussing them. And they are revisited throughout the semester. The rules that a society puts in place to influence or control decision-making are important if we are to understand the decisions.

Here is an excellent article from The Daily (HT to Arts & Letters Daily) that really brings the importance of institutions home. What I find particularly interesting is the aspect of traditional economies in a modern setting. One quickly understands how traditions can be an important mold for many choices. And attempts to change the rules, by issuing formal rules to replace informal rules, can have significant costs on many levels. I hope you take a moment to check the article out. And I hope you will share your thoughts.

Honey...I May Have Shrunk the Economy

Actor/writer Rick Moranis has a very amusing piece in the opinion section of today's edition of The Wall Street Journal. What struck me was how good it would be in setting up a discussion of opportunity cost. It really harkened back to Bastiat's "that which is seen and that which is unseen." I strongly recommend it and I hope you comment with your opinion.

The Mark of the Entrepreneur

Which of Schumpeter's five roles of the entrepreneur is/are illustrated here?

Two Items of Interest

First, I'm a bit late with this, but for those of you who haven't sought it out already, PNC Bank has it's CPI (Christmas Price Index) up and running, showing the price changes in the gifts from the carol, The Twelve Days of Christmas.  As always, it's an interesting way to explore how an index works and how the various components fit together to provide a single measure. What's particularly interesting is how many of the components showed no change this year.

Second, today's edition of The Wall Street Journal had a great micro-parody of a macro-event (the recent financial crisis). It's well worth a look and good for a chuckle.

All of my classes are entering their last week of the semester. I suspect the same applies to many of you. So in case I don't get another chance to post before the new year, I wish you happy holidays and more good economic resources.

The Invisible Hand and Thanksgiving

I suspect many of you are busy today.  Our family had our dinner yesterday because one of my sons is working on Thanksgiving Day. But when you get a chance, you might want to review this column by Jeff Jacoby of The Boston Globe. (HT to Carpe Diem for the reminder.)

The market works wonders. And if you're thinking "but turkey was relatively expensive this year"; the market explains that, as well.  Here's an item from Bloomberg.

Happy Thanksgiving.

Putting Things in Perspective ... Thanksgiving Edition

As we approach year's end and the traditional holiday season, and with the failure of the Supercommittee to achieve anything of substance beyond finger-pointing, here is something courtesy of XKCD to fill those odd classroom moments.

From Last Night's 60 Minutes on CBS

Captain Renault is shocked.

Rent-seeking 101

Here's an editorial from today's edition of The Wall Street Journal that describes the process simply.

Happiness Can Make You Miserable

Here is a link to a Luann comic strip that offers a chance to really explore choices, trade-offs, opportunity cost and even psychic income.

http://www.gocomics.com/luann/2011/11/13

Behavioral Economics and Tax Cuts

Here is a piece from Bloomberg Businessweek (HT Arts & Letters Daily) on how behavioral economists may have shaped a tax policy. The summary of the research is that the plan didn't work. However, the study is based on survey data, which is not as reliable as actual expenditure data. It's a worthwhile read if you are entering the section of fiscal policy or spend time discussing behavioral economics. 

In the Long-Run

Courtesy of www.xkcd.com

Taxes and Halloween Candy

Here's a funny video (HT Econlog) with a comedian explaining how to use Halloween candy to explain taxes. It's a great visual, although the last line is over the top.