Thomas Schelling: Winning the Game of Love (Without War)

Even though it may feel like the holidays are over, another is just around the corner. Valentine’s Day is coming and it’s an opportunity for loved ones to express their feelings for one another with chocolates or assorted gifts. But what am I supposed to get my girlfriend? What is she supposed to get me? Obviously, we know each other’s tastes and preferences, but we need a way of making sure that we are both on the same page for how much we will spend on each other. If my girlfriend buys me a nice, expensive watch, and I give her a $5 Starbucks card, I will be in the doghouse until July. Thomas Schelling’s adaptation of game theory can give some answers to this. Continue reading “Thomas Schelling: Winning the Game of Love (Without War)”

Making Sense of Nominal GDP Targeting

In less than a month, Jerome Powell will replace Janet Yellen as the new Chairman of the Federal Reserve.  This change will give the Fed a chance to reconsider how it conducts monetary policy.  There had been a consensus among macroeconomists since the 1980s, but like many things, it was shattered by the Great Recession.  Continue reading “Making Sense of Nominal GDP Targeting”

Bernie Sanders is Angry About Deodorant and Sneakers

During the height of the Democratic primary season in 2016, Senator Bernie Sanders made news by lamenting “You don’t necessarily need the choice of 23 underarm spray deodorants or 18 different pairs of sneakers when children are hungry in this county.” Bernie asks an interesting economic question – why do we have so many choices between products that are essentially the same thing? Paul Krugman won the Nobel Prize in 2008 in part for answering this question. Continue reading “Bernie Sanders is Angry About Deodorant and Sneakers”

Leonid Hurwicz: A Defense of the Swindlers of Snowmageddon

For North and South Carolinians, the new year brought forth new problems: the snowmageddon. The winter storm of 2018 covered the whole east coast including cities that do not see snow often. Folks in Charleston and Wilmington were in panic mode as they struggled to navigate the white, slippery roads. The beach bums were woefully underprepared. Every time a disaster like this strikes, the same old arguments arise. Of course, I’m talking about how to get goods to the people who need them the most. You might have seen it in headlines as price gouging. Continue reading “Leonid Hurwicz: A Defense of the Swindlers of Snowmageddon”

Edmund Phelps: Find Your Natural Rate of Body Fat This Year

As the New Year inches closer and closer, many of us start rushing to come up with resolutions we wish to achieve in the next year. Some of us want to write more thank you notes. Others want to lose weight. Continue reading “Edmund Phelps: Find Your Natural Rate of Body Fat This Year”

The Tax Bill, Floodplains, and Time Inconstistencies

Depending on whom you ask, the tax bill recently passed by Congress will either be the driver of amazing prosperity or the worst bill the country has never seen. No matter the philosophical merits or faults of lower tax rates, history suggests that the correlation between tax cuts and economic growth is a bit muddied. Keep on reading!