The Economics of Doing Nothing
Actions can be lumpy
Economics
Economic Forces.
Brian Albrecht and Josh Hendrickson on price theory, markets, and applied economics.
Recent essays
30 of 59Price discrimination is competition
Creative pricing can create a better deal without better technology
Robert Hall, Optimal Money, and the Nobel Prize
Reflections on a lesser cited, but deeply influential paper
And the 2026 Economics Nobel Goes to...
Robert E. Hall and Michael Woodford “for microfoundations of macroeconomic stabilisation”
[Re-Post] Prices and Information
How is it possible that prices reflect all available information, but somehow simultaneously act as a substitute for information?
Monopsony without a monopsonist
Plus am I starting a dancing channel?
Price is Opportunity Cost
Price theory teaches you how to understand human behavior even beyond the market
Your time changes the price
Pricing power looks different when the customer’s time is part of the price.
Insuring Against Success?
Are Universities Using Prediction Markets to Fund Their Athletic Compensation Schemes?
When you should sell to the lowest bidder
A classic from Bulow and Roberts
Should Central Banks Be Independent?
Independence, accountability, and lessons from the literature
[Re-Post] The Treasury Standard
Thinking about the international monetary system
Hotelling doesn't say what you think it says
“Why do gas stations locate across the street from each other?” Hotelling.
Mr. Bessent and the Yen
Why is the U.S. intervening to boost the value of the yen?
Losers and Welfare
What is the relevant welfare criterion for economic analysis?
What will happen to Mamdani's grocery stores?
We finally have some more details on what NYC’s Mayor Zohran Mamdani has in mind for his government grocery.
GDP and Living Standards
Does GDP Capture Changes in Living Standards? Potential Implications for Our AI Future
[Re-Post] What (and who) in the world are we trying to tax when we tax corporate income?
Inside the wild world of corporate tax theory
Where the returns to AI go
The scarce return earns the rents. So what remains scarce?
AI Policy and National Defense
How should we think about national security concerns and AI?
Never Reason from an Accounting Identity, Redux
Economic confusion all around
Externalities, Pigouvian Taxation, and Optimal Policy
Are Pigouvian Taxes Actually Optimal Solutions to Externalities?
A compute tax is a REALLY dumb idea
People are freaking out about AI. That doesn't mean a random tax is a good idea.
Parking, Fireworks, and Making Sense of Prices
Why do universities have persistent shortages of parking? Why do states allow you to purchase fireworks, but not set them off?
A simple approach to dynamic mergers
Can we capture the core trade-off without going full IO?
Are Giffen Goods Real?
Price theoretic logic implies the demand for Giffen goods is downward-sloping
You are not a horse
AI and the future of labor demand
Panhandlers and Price Theory
Do panhandlers behave as price theory would predict?
Pouring cold water on the waterbed effect
Impossibility in the popular model
Drugs of Choice
Doubling down on explaining drug use with price theory