joshuago’s economics Bookmarks

The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.

An unruly market may undo the work of a giant cartel and of an inspired, decades-long ad campaign.

Forget aid—people in the poorest countries like Haiti need new cities with different rules. And developed countries should be the ones that build them.

The appeal of bundling is partly that it reduces transaction costs: instead of having to figure out how much each part of a package is worth to you, you can make a blanket judgment. Bundling eliminates the problem of fretting about small expenditures, which may be one reason that flat-rate pricing is very common in the vacation industry. It also offers what economists call option value: you may never watch those sixty other channels, but the fact that you could if you wanted to is worth something. Many consumers also perceive bundles as bargains; getting a bunch of things for one price feels like a deal, even when it’s not.

America may one day be lucky enough to experience its very own national fiscal crisis. Let us hope it is not wasted.

The money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

If you’re planning a web app, it’s always worth reminding yourself what the base need is that you’re satisfying, and how much value it is likely to have with the user: a successful business/service should neither over nor under-value itself.

You’ve probably heard about how free trade has hurt American workers. Maybe you don’t really believe it. Maybe you think that the benefits of free trade – cheaper goods, more choices – outweigh the costs. Maybe you don’t really feel like your job or livelihood is subject to overseas competition. But free trade does affect you. To tell the truth, free trade is probably killing you.

In an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Raw information will become not just a commodity, it will be a nuisance. In that world, consumers will value scarce, relevant insight over abundant facts.