Summary: The Indicator’s first “Beigie” Award of the year (best entry into the Fed’s Beige book) goes to the Atlanta Fed! The Sixth District described that firms are reverting back to “just-in-time” inventory management from the “just-in-case” approach they were taking when facing uncertain supply chains. The accompanying numerical exercise links inventory with opportunity costs.
Summary: The Inflation Reduction Act allows Medicare to negotiate the price of some drugs. What if this happened at a larger scale? The dismal answer would be “less incentive for pharma to innovate.” Yes, there is no such thing as a free lunch, but what about a cheaper lunch? The Indicator offers an optimistic view and our classroom exercise analyzes these policy ideas that may offer a solution to this “knotty” dilemma between prices and new drugs.
audioecon 