People respond to incentives. If unemployment becomes more attractive because of the unemployment benefit, some unemployed workers may no longer try to find a job or may not try to find one as quickly as they would without the benefit.
Paul KrugmanI think so long as fossil fuels are cheap, people will use them and it will postpone a movement towards new technologies.
Paul KrugmanGovernments do not necessarily act in the national interest, especially when making detailed microeconomic interventions. Instead, they are influenced by interest group pressures. The kinds of interventions that new trade theory suggests can raise national income will typically raise the welfare of small, fortunate groups by large amounts, while imposing costs on larger, more diffuse groups.
Paul KrugmanUnsustainable situations usually go on longer than most economists think possible. But they always end, and when they do, it's often painful.
Paul Krugman