Economists have long been concerned with the impact of total government expenditures on employment, level of income, and income distribution. However, only recently has attention been paid to the effects of changes in the compostion of these expenditures. These studies have generally tended to...

In a recent article, Bilancini (J Econ 102:275–286, <CitationRef CitationID="CR8">2011</CitationRef>) demonstrates that assuming either price-dependent preferences or preferences that depend on the choices of other individuals can render the theory of revealed preference effectively unusable. Some readers might be tempted to infer that...</citationref>

The American savings rate, always low by international standards, has fallen sharply in recent decades. In this essay, I argue that a large part of the savings shortfall results from pressures to keep pace with community spending standards, pressures that have been exacerbated by rising income...

Alfred Kahn’s enduring legacy will be his influence on how economists think about the regulation of natural monopoly. But although the substance of his ideas mattered far more than their style, his influence would not have been nearly as great had it not been for his almost slavish devotion to...

Economists can to some extent enlighten policymakers and the public and influence public policy. That enlightenment is achieved more by concrete policy work and application of basics than by fancy models and fancy statistical significance. There is a trade-off between relevance/importance and...

Respected economists invoke the Pareto criterion to argue that inequality doesn't really matter so long as no one ends up with less in absolute terms. Using income levels to measure the well-being of individual families, these economists argue that since the rich now have much more money than...

Perhaps the brightest new branch in economics today is behavioral economics. It directly challenges the central economic assumption about the rationality of market participants. But what are its practical implications? Robert Frank has been working in these fields almost as long as anyone. He...