Economics in Fiction: Two Post-Christmas Book Reviews

Anyone who has studied a little economics knows that popular fiction usually avoids economic themes, and if it does not, butchers them. Yet this year, two novels landed under our Christmas tree that place economic themes front and center and treat them well. The books are Nineteenth Street Northwest by Rex Gosh (Greenleaf Book Group) and Super Sad True Love Story by Gary Shteyngart (Random House).

U.S. Ethanol Subsidies: A Bad Policy That Refuses to Die

U.S corn farmers and ethanol distillers are among those celebrating passage of last week's tax bill. A little-noticed provision of the law extends ethanol tax credits ($.45 per gallon, plus a bonus for small producers) and tariffs on ethanol imports ($.54 per gallon), previously set to expire at the end of 2010. Should the rest of us also celebrate? I think not.

Does Argentina's "Nike Effect" Hold Lessons for Europe?

What happens when a country faces forced austerity, a banking crisis, a risk of sovereign default, and pressure to abandon a currency peg it has has sworn to be eternal and unbreakable? Several European countries are in this position today, but there is nothing really new about it. It's all happened before, most recently in Argentina in the winter of 2001-02. So what became of Argentina? Are there any lessons there for today's Europe?

Progress on Korea-US Trade Offers Contrast with Talk of Protectionism

This week's finalization of the long-delayed Korea-US Free Trade Agreement (KORUS FTA) offers a welcome contrast with all the gloomy talk of a protectionist response to the ongoing global crisis. The Bush administration first negotiated the deal, which would be the biggest since NAFTA, in 2006,  under the since-expired system for "fast track" approval by Congress. Due mainly to opposition from auto and beef interests, it was never ratified.