Those who are puzzled by globalization anxiety and attribute it to collective irrationality (see Tyler Cowen's piece in the NYT) overlook a fundamental aspect of markets--their "embeddedness." What I am referring to is the idea that successful markets need to be embedded in a larger set of man-...

by Robert Lawrence, guest blogger Although we call the big three automobile companies they have basically specialized in building trucks. This left them utterly unable to respond when high gas prices shifted the market towards hybrids and more fuel efficient cars. One reason is that Americans l...

A long-standing debate between libertarians and others concerns the extent to which a state is needed to enforce cooperative rules. Many libertarians argue that informal, self-sustaining agreements can achieve desirable outcomes even without the state acting as a third-party enforcer. See here f...

One can make a decent argument that the financial crisis has bottomed out in the advanced countries (with the real-economy consequences still to come of course). But it is barely starting in the emerging markets, and it could get much, much worse. Some of these economies are hurt by (now) dec...

Look at the figure below, and then look at it again, and again, and again. It is the most telling picture about the U.S. political economy I have ever seen. It comes from Princeton political scientist Larry Bartels' new book, soon to be released. What it shows is the difference that the Pres...