ARNOLD KLING
August 14, 2011
The Top Political Contributors
August 11, 2011
Gender and the New Commanding Heights
August 11, 2011
Jamie Galbraith Makes an Assumption
August 11, 2011
Macroeconometrics: The Science of Hubris
August 10, 2011
Real and Nominal Bond Yields
BRYAN CAPLAN
August 14, 2011
The Effect of Thumb Sucking on Income
August 12, 2011
The Voice of Cold, Hard Truth to All Would-Be Educators
August 12, 2011
Ability, Morality, and Prosperity: A Paper and a Report
August 11, 2011
The Theory of Time and Frittering
August 10, 2011
Male Variance and the Remnants of the Gender Gap
DAVID HENDERSON
August 9, 2011
Hayek in "Unbroken", Part Two
August 8, 2011
Hayek in "Unbroken"
August 5, 2011
James Bovard on the Peace Corps
August 4, 2011
Summers Way Off on FDR and 1941
August 3, 2011
The "Amazon" Tax
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Globalization affords an interesting example of an evolving social norm: The practice -- now under challenge -- of pricing oil in US dollars. Historians have noted it was "an accident" that oil prices came to be valued in dollars. In fact, it was a social norm that evolved from the larger postwar context from which the global oil trade was born. That social context was overwhelmingly American.
As Europe becomes a bigger player in the world economy, oil now is being priced more and more in euros. There's a debate under way about whether this is good or bad. Either way, pricing oil in euros is an example of a changing social norm. Valued in more than one currency, oil begins to reflect the pluralistic social values of globalization.
The economic question is, did dollar-priced oil in the end violate a rational expectations model? And was it counteracted as a result by globalization's expansionary social effect of pricing commodities in many currencies?