Clear Understanding of Basic Economics Is Vital

Summary

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Professors James Gwartney (Florida State University), Richard Stroup (Montana State University) and Dwight Lee (Georgia University), three longtime colleagues of mine, have recently published "Common Sense Economics." It's a small book, less than 200 pages, that addresses a serious economist dereliction of duty: making our subject understandable to the ordinary person.

Public misunderstanding of basic economic principles leaves us easy prey to political quacks, charlatans and assorted hustlers. Part I of "Common Sense" focuses on 10 key elements of economics that I'll only briefly describe.

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Extract

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Clear Understanding of Basic Economics Is Vital

The first is incentives matter. During the 1970s, gasoline prices rose dramatically. Immediately, people did more carpooling and eliminated unimportant trips. Gradually, they shifted...

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