Since 2007, the foremost countries of the world have been feverishly searching for a remedy to their crumbling national economies. The two most pertinent of the crises are occurring in the Unites States and Central Europe. The American Recession has stemmed from risky personal lending, while the European Debt Crisis stems from over-borrowing of national governments. Though the scaling of perpetrators is contrary, the effects are equivalent. Struggling economies now make up the lions-share of the world’s economy. As the […]
Paul Samuelson’s paper on public expenditure is a drag to read for anyone with a background in economics. The concept of utility maximization is surely not a novel one, even in his day, although his application of the concept is rather unique. Samuelson had very little to say about the matter other than the possibility of an aggregate utility maximization of public expenditure consumption. While pretty in theory, any pragmatic use of this model is fantasy at best. Charles Tiebout […]
The debate between Ronald Coase and Authur Pigou is still going strong some 50 years after Coase wrote his criticism of Pigou’s theory of social costs and externalities. Since the debate’s inception, much studies have taken place and ground made on both sides of the issue, yet not much common ground has been established. One thing that is clear is that there are external costs imposed on parties outside of a transaction in certain situations. These externalities create inefficiencies in […]
The Environmental Kuznets Curve framework is a very intriguing theory on the relationship between economic growth and effects of environmental quality. Essentially the theory proposes that initially, as economies grow, environmental quality is adversely affected with the marginal rate of this effect decreasing over time. This means the adverse impact on environmental quality will increase up to a point, at which continued economic growth would start to be beneficial for environmental quality. Empirical evidence of this theory has shown mixed […]
Commerce has always been essential to empires, from the empire of the Akkadians to those of the modern day. An argument could even be made that commerce gave birth to the first empires after the agricultural revolution. Empires such as the Phoenicians were built almost entirely around trade, and their innovations and expansion helped create global trade networks. Empires have risen and fallen because of trade. Trade and the networks that maintained it were no less important from the 12th […]
Although a relatively new policy mechanism, carbon pricing has shown some very promising potential. It has been known for quite some time that certain industrial outputs can be harmful to the environment, both on a global and regional scale, but it has taken quite some time for economists to catch on and develop policy around curbing emissions. This being such a new utensil in the economic tool kit, governments should be extremely cautious in its implementation. Like any uncharted policy […]
