Home/Micro/Macro Chapter 1

Why a Medical Chief Opposes Universal Flu Shot

Although this story goes back to 2004, I am including it because it is one of the best illustrations of the importance of opportunity cost, as opposed to money cost, for making smart choices. A universal flu-shot for all Canadians would cost about $125 million per year and improve [...]

Why a Medical Chief Opposes Universal Flu Shot2020-05-11T08:08:51-04:00

Unintended Consequences in Mortgage Regulations

While the topic of the article is mortgage regulations, the main economic lesson is the importance of identifying unintended consequences of economic policies. Incentives are key to understanding unintended consequences. Examples of unintended consequences include how seat belt laws initially increased injuries, reasons for deductibles on insurance policies, and [...]

Unintended Consequences in Mortgage Regulations2020-05-10T08:31:09-04:00

Bank of Canada Models as Art and Science

The Bank of Canada is changing the sophisticated models it uses to forecast the economy because those models failed to predict "the deep and persistent aftershocks of the global financial crisis" of 2007-2009. This is a perfect example of the quote from Keynes that "Economics is a science of [...]

Bank of Canada Models as Art and Science2020-05-10T07:55:12-04:00

Arguing for Free Trade in a Post-Trump World

Anti-trade and anti-globalization positions helped elect Donald Trump, and economists' traditional arguments for free trade are being ignored. In fairness to the anti-traders, the outcomes of extended trade (especially with China) have left many workers in manufacturing worse off. In teaching about the gains from trade, how do we [...]

Arguing for Free Trade in a Post-Trump World2020-05-07T15:52:50-04:00

The Five Minute University

As economists and teachers, what do we want our lasting “economic footprint” to be? There is a wonderful old Saturday Night Live skit by Father Guido Sarducci called “The Five Minute University.” His premise is to teach in five minutes what an average college or university graduate remembers five years after graduating. For economics, [...]

The Five Minute University2020-05-07T16:24:53-04:00

Economic Fables

I started reading Ariel Rubinstein’s Economic Fables.  Before reading his description below of what an economic model is, keep in mind that he is one of the world’s foremost game theories, and a former President of the Econometric Society. Economic theory formulates thoughts via what we call “models." The word [...]

Economic Fables2020-05-09T11:27:28-04:00