Economics is about systems, and it’s not uncommon to see well-intentioned interventions in economic systems produce unintended consequences. I ran across a good example a few weeks ago. A well-meaning high school decided to increase the nutritional content of its lunches. Good idea, right? The students, though, had a different idea. They walked down the street and bought as much unhealthy food as they wanted.
Posts Tagged ‘financial regulation’
I ran across a link on Marginal Revolution to a cool piece by my colleague Paul Romer. He ends with this:
“If we persist with a legalistic rule setting process, the opportunists will thrive. We will settle into a fatalistic acceptance of systemic financial crises, flash crashes, and ever more exotic forms of opportunism.”