Tag: Negative Externalities
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Allocation of Limited Resources. Part 4 – (Negative Externalities)
At the core, market exchange is about well-informed buyers and sellers freely exchanging to their mutual advantage. But what happens when the transaction price doesn’t capture all the cost or benefits of the transaction … that is, someone external to the transaction bears part of the cost and/or reaps part of the benefit? When this…
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Building a Green Economy – Paul Krugman
New York Times Magazine: Building a Green Economy Paul Krugman This is a lengthy article, and I'm not endorsing all of Krugman's conclusions. Nevertheless, I think it is a wonderful piece for illustrating how economists process the issue of negative externalities. If you listen to climate scientists — and despite the relentless campaign to discredit…