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If you have studied economics at the university level in the last 35 years it is likely you were introduced to the concept of “asymmetrical information” and George Akerlof’s famous 1970 article on markets for “lemons” (American slang for an automobile of terrible quality). The Nobel committee that awards the prize in economics singled out ...

The ongoing weakness of America’s economy—where deleveraging in the private and public sectors continues apace—has led to stubbornly high unemployment and sub-par growth. The effects of fiscal austerity—a sharp rise in taxes and a sharp fall in government spending since the beginning of the year—are undermining economic performance even more. Indeed, recent data has effectively ...

To anyone who lived through Ronald Reagan’s presidency, it’s a familiar story. It begins with a detailed description of a woman living high off the hog on welfare. Then it asserts that runaway social spending poses a threat to economic growth and well-being. The up-close-and-personal touch makes a more memorable case for austerity than an ...

The best advice I received when taking up policymaking responsibilities in Turkey more than a decade ago was to take “a lot of time and care to develop and communicate the ‘narrative’ to support the policy program that you want to succeed.” The more that economic policy is subject to public debate – that is, ...

The debate over government debt and its relationship to economic growth is at the forefront of policy debates across the industrialized world. The role of the economics profession in shaping the debate has always come under scrutiny. In particular, attention has focused on the findings of the Harvard economists Carmen M. Reinhart and Kenneth S. ...

It’s been a very bad week for the merchants of austerity. In Europe, the just-released statistics on first quarter performance show EU nations sliding deeper into recession. In Spain and Greece, unemployment rates are approaching a staggering 30 percent. In Britain, the Tory government took as good news the fact that the UK managed to ...

A year ago, the big U.S. banks were focused on repealing, or at least eliminating large parts of, the Dodd-Frank financial-reform law. They poured money into the campaign of the Republican presidential nominee, Mitt Romney, and gave generously to opponents of the pro-reform Senate candidates Sherrod Brown and Elizabeth Warren. At the same time, lobbyists devised creative ...

Much has been written on the ethics of plagiarism. One aspect that has received less notice is plagiarism’s role in corrupting our ability to learn from data: We propose that plagiarism is a statistical crime. It involves the hiding of important information regarding the source and context of the copied work in its original form. Such information ...

There are two competing narratives about recent financial-reform efforts and the dangers that very large banks now pose around the world. One narrative is wrong; the other is scary. At the center of the first narrative, preferred by financial-sector executives, is the view that all necessary reforms have already been adopted (or soon will be). ...

HOUSES are just buildings, but homes are often beautiful dreams. Unfortunately, as millions of people have learned in the housing crisis, those dreams don’t always comport with reality. Economic and demographic changes may severely impair the value of a home when it’s time to sell, a decade or more in the future. Will a particular ...