The Cato Journal

The Cato Journal is a leading free-market public policy journal. The Cato Journal features articles discussing politics and the economy of interest to scholars and professionals but accessible to a general audience as well.

Articles from Vol. 32, No. 3, Fall

Alternative Political and Economic Futures for Europe
Defeat of a proposed constitution for the European Union by voters in France and the Netherlands in 2005 should have provided an opportunity to reflect on a broader range of alternative political and economic futures for Europe. But it did not. For...
Asset Bubbles and Supply Failures: Where Are the Qualified Sellers?
From their peak during the third quarter of 2007, to their trough during the first quarter of 2009, stock prices as measured by the S&P 500 fell 48 percent (see Figure 1). Through the third quarter of 2009, stock prices subsequently increased more...
Decisionmaking, Risk, and Uncertainty: An Analysis of Climate Change Policy
This article explores four questions. First, what theoretical frameworks help describe policy failure and success? Second, how might the decision that leads to failure or success be understood in terms of differing concepts of rationality and decisionmaking?...
Editor's Note: A Tribute to William A. Niskanen
This issue of the Cato Journal is dedicated to William Niskanen, who passed away on October 26, 9.011, at the age of 78. From 1985 to 2008, Bill served as chairman of the Cato Institute and a full-time economic scholar. He continued working as chairman...
Is the Washington Consensus Dead?
In the postwar years, most Third World countries turned inward partly in response to what they thought were the disastrous consequences of their 19th century integration into the world economy as the global economy collapsed in the Great Depression....
School Choice and Achievement: The Ohio Charter School Experience
K-12 education policy has recently received much scrutiny from policyanakers, taxpayers, parents, and students. Reformers have often cited increases in spending with little noticeable gain in test scores, coupled with the fact that American students...
Starving the Beast Revisited
The determinants of government budget deficits have been studied extensively, especially during the years in which the discrepancy between federal income taxes and expenditures has widened. In that respect, it is of interest to explore the causal relationship...
Stochastic Optimal Control and the U.S. Financial Debt Crisis
Stochastic Optimal Control and the U.S. Financial Debt Crisis Jerome L. Stein New York: Springer-Verlag, 2012, 180 pp. At one point during the recent financial crisis the queen of England reportedly asked economists at the London School of...
Sustaining China's Economic Growth after the Global Financial Crisis
Sustaining China's Economic Growth after the Global Financial Crisis Nicholas R. Lardy Washington: Peterson Institute for International Economics, 2012, 181 pp. As one of the world's leading experts on China's economic reforms, Nick Lardy...
The Behavior of the Labor Market between Schechter (1935) and Jones & Laughlin (1937)
Recent research on the Great Depression emphasizes the role New Deal economic policy played in slowing recovery. Policies pro-rooting cartels and higher wage rates during a time that the economy was experiencing unprecedented unemployment were likely...
The Keynesian Path to Fiscal Irresponsibility
The basic idea behind Keynesian policy for achieving stable economic growth is straightforward, and superficially plausible. When the economy is in a downturn with underutilized resources, Keynesians believe the federal government should increase aggregate...
The Money Trap: Escaping the Grip of Global Finance
The Money Trap: Escaping the Grip of Global Finance Robert Pringle Basingstoke, UK: Palgrave Macmillan, 2012, 328 pp. To read Robert Pringle's new book, The Money Trap, is to experience the slow joy of recognizing that someone out there in...
The New Monetary Economics Revisited
This article revisits the key conceptual aspects of the New Monetary Economies (NME) by examining the idea of "monetary separation" and objections raised against it. So long as a dominant role for base money in exchange exists, using it to provide...
The Partnership: Five Cold Warriors and the Quest to Ban the Bomb
The Partnership: Five Cold Warriors and the Quest to Ban the Bomb Philip Taubman New York: Harper, 2012, 496 pp. Can four former Cold War policymakers and a prominent physicist of the era change the world through sheer force of personality?...
The Scope of Government in a Free Society
The purpose of this article is to delineate the legitimate functions of government in a free society. This exercise differs from determining the "optimal" size of government, which economists have estimated at 15 to 30 percent of gross domestic product....
Warfare State: World War II Americans and the Age of Big Government
Warfare State: World War II Americans and the Age of Big Government James T. Sparrow New York: Oxford University Press, 2011, 344 pp. In 2008, many Americans feared another Great Depression had begun. Amidst "all the gloom and doom, however, Rahm...