Casey B. Mulligan and the Competency Problem in Economics

The other day on twitter I had a conversation I’ve had many times. An economist defending price theory said that Usually, this wouldn’t be very notable. I have lost track of the number of PhD economists I have caught making this mistake. But as I looked into this person’s position within the field of economics,Continue reading “Casey B. Mulligan and the Competency Problem in Economics”

Two Misconceptions about Supply Curves

Often people who go on to study economics are unaware of the misconceptions that Economics 101 leaves them with. In fact, when discussing the problems with introductory economics a few of the defenders of the curriculum will without fail demonstrate these misconceptions. Having recently encountered a few of these misconceptions in the wild I decidedContinue reading “Two Misconceptions about Supply Curves”

Increasing returns and decreasing costs

Before discussing evidence for the shape of cost functions it is useful to go over the relationship between cost functions and production functions. The concepts of increasing returns and increasing costs are often confused in these discussions. Empirical studies do not usually attempt to measure cost functions but instead measure properties of production functions, andContinue reading “Increasing returns and decreasing costs”

Supply and demand: reasons for scepticism

Supply and demand is perhaps the best known concept in economics. Much of undergraduate microeconomic teaching is based on this concept, and there is general agreement that it is one of the foundational concepts of the field. Even professors whose work involves challenging some of the assumptions of the field refer to it as theContinue reading “Supply and demand: reasons for scepticism”