K-12 In the 1980s, economists puzzled by a decline in the growth of U.S. productivity realized that American schools had taken a dramatic turn for the worse. After rising every year for fifty years, student scores on a variety of achievement tests dropped sharply in 1967. They continued to decline through 1980. The decline was […]| Econlib
The U.S. welfare system would be an unlikely model for anyone designing a welfare system from scratch. The dozens of programs that make up the “system” have different (sometimes competing) goals, inconsistent rules, and over-lapping groups of beneficiaries. Responsibility for administering the various programs is spread throughout the executive branch of the federal government and […]| Econlib
Few economic indicators are of more concern to Americans than unemployment statistics. Reports that unemployment rates are dropping make us happy; reports to the contrary make us anxious. But just what do unemployment figures tell us? Are they reliable measures? What influences joblessness? How Is Unemployment Defined and Measured? Each month, the federal government’s Bureau […]| Econlib
The world’s population increased by 50 percent between 1900 and 1950 and by 140 percent between 1950 and 2000, and is projected by the United Nations to increase by just under 50 percent between 2000 and 2050. Of the 3.44 billion increase in the number of people between 1950 and 2000, only 8 percent was […]| Econlib
Investment is one of the most important variables in economics. On its back, humans have ridden from caves to skyscrapers. Its surges and collapses are still a primary cause of recessions. Indeed, as can be seen in Figure 1, investment has dropped sharply during almost every postwar U.S. recession. As the graph suggests, one cannot […]| Econlib
The growth of productivity—output per unit of input—is the fundamental determinant of the growth of a country’s material standard of living. The most commonly cited measures are output per worker and output per hour—measures of labor productivity. One cannot have sustained growth in output per person—the most general measure of a country’s material standard of […]| Econlib
Economic competition takes place in markets—meeting grounds of intending suppliers and buyers.1 Typically, a few sellers compete to attract favorable offers from prospective buyers. Similarly, intending buyers compete to obtain good offers from suppliers. When a contract is concluded, the buyer and seller exchange property rights in a good, service, or asset. Everyone interacts voluntarily, […]| Econlib
The most basic laws in economics are the law of supply and the law of demand. Indeed, almost every economic event or phenomenon is the product of the interaction of these two laws. The law of supply states that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises […]| Econlib