There is widespread consensus among economists that institutions matter for economic development or stagnation. A large literature indicates that wealthy countries are those where property rights are clearly defined and protected, the rule of law is established and enforced, citizens have political and civil liberties, and policymakers adopt sound monetary and fiscal policies.1 Poor countries t...

While entrepreneurs benefit from unrestricted free entry into markets, they have a time-inconsistent incentive to lobby for government entry restrictions once they become successful. Bad political institutions yield to these demands, and growing barriers are placed on domestic and international competition. Good institutions do not, and this effort is instead channeled toward further wealth cre...

Individuals' free choices in vaccination do not guarantee social optimum since individuals' decision is based on imperfect information, and vaccination decision involves positive externality. Public policy of compulsory vaccination or subsidised vaccination aims to increase aggregate private demand closer to social optimum. However, there is controversy over the effectiveness of public interven...

With war in the Middle East and the prospect of terrorist attacks at sites ranging from major airports to the local shopping mall, it may be appropriate to remind ourselves that much of the world is experiencing an extended period of peace. Indeed, developed countries have not fought each other since the Second World War. This peace is unusual because powerful nations are historically the most ...

A priori, real economic freedom is purchasing (and selling) power. Yet, Xu’s theorem comforts ranking the freedom of choice provided by budget sets as their volume in deriving it from three axioms. However, one and a half of these axioms can be discussed. In contrast, the standard measure of purchasing power leads one to order the freedom provided by budget sets as the distance to the origin of...

Since the end of 2007, the world has experienced a sharp and deep decline in economic activity, which in this paper for the sake of brevity will be referred to as “the current recession.” The United States has initiated many costly and extensive policies to fight this recession that are likely to have detrimental effects on economic freedom in that country. This chapter considers these detrimen...