John Quiggin finally makes explicit What Everyone Knows: that the clusterfuck that has been made of Macroeconomics is due largely to an attempt to leverage (insufficiently robust) Microeconomic Theory: the…

John Quiggin makes the broad case (link fixed). If you are then stuck with trying to present a Grand Unified Field Theory, you will inevitably lose (or, at best, reduce)…

…That’s the theory, at any rate. It’s a pretty solid theory, it’s in most of the textbooks I’ve seen, and it shapes public policy in basically every country I’m familiar…

…that field. Ryan Avent brings that principle to bear in one of the nicest pieces I’ve seen laying out the game theory of monetary policy over the next couple of…

…reinsurance is designed to accomplish–it retains the risk within the controlled group. (The IRS litigated a number of captive insurance cases under the theory that a controlled group constitutes a…

…some big-picture ideology and theory. I think this thinking does much to explain what Mike Kimel in particular has made so clear here over many years (with occasional help from…

…to earn money every year (anyone care to do the arithmetic?), but nothing like the disincentive that results (in theory, to some greater or lesser degree) from high marginal income…

…of the market is controlled by people who believe in the quantity theory of high powered money — so a tripling of the supply of high powered money should cause…

…boot. Leaving out those simple assumptions tends to produce empirical results that fail to abide by the most basic economic theory. This is true for data at the national level…

…of this lies in a legal theory known as legal federalism, which in this context is a theory of law that holds that the lower federal courts should have only…