Articles

We can reform the economics curriculum without creating new disciplines

Following the global financial crisis there has been much discussion of curriculum reform in university economics teaching. More pluralism is required, but there is no need for “two communities within the same discipline”.

Ice cream, apathy and the paradox of two party politics

John describes lessons for democratic politics from Hotelling’s model of spatial competition.

Why our planes are growing safer and our finances are not

One reason modern air travel is reassuringly safe is that investigation into accidents is honest and thorough. The contrast with finance could hardly be greater.

Must we endure excessive drug prices to encourage pharmaceutical R&D?

A mechanism of funding pharmaceutical research which leads to drug prices far in excess of marginal cost is bound to lead to anguish and injustice. But is there a better idea?

Banks might improve with more women in charge

Senior jobs in private-sector finance are taken almost exclusively by men. Since there is a link between testosterone and risk taking perhaps now’s the time to redress the balance.

Why do we welcome innovation to products more readily than to processes?

Children love to play with new toys but hate disruption to their routines. These traits persist in adult life: innovation is readily adopted when it is incorporated in new gadgets but innovation that involves doing things differently is resisted. There are understandable reasons for this.

The best strategy is to be good at whatever it is you do

Michael Porter warned on the danger of being “stuck in the middle”. Companies, he said, must either gain a cost advantage or emphasise product differentiation. But what really matters is enjoying a competitive advantage in the market position you choose.

What did the US Supreme Court have to say about Sir Malcolm Rifkind in 1874?

The Supreme Court of the 1870s took the view that free speech and honest speech were two sides of the same coin. In 2010 the same court held that the expression of views you are paid to hold is an activity deserving of the protection awarded to free speech under the First Amendment.

It’s too risky to rely on financial risk models

Extremes among observed outcomes are much more often the product of “off-model” events than the result of vanishingly small probabilities. The implication is that most risk models are unsuitable for the principal purpose for which they are devised: protecting financial institutions against severe embarrassment or catastrophic failure.

Barnett formula erodes the concept of “English votes for English laws”

Any action by the UK government that has tax or expenditure implications anywhere in the UK, whether related to reserved or devolved functions, will have consequences for tax and expenditure decisions in Scotland through the Barnett formula.