Our mission: Find the world’s best economic ideas (Summer School World Tour)

This is the premiere of Planet Money's eight-week Summer School World Tour — a season that will visit China, South Korea, Nigeria, Norway, Argentina and more — and it starts about as far from headquarters as possible, in Australia and New Zealand. The guide is Justin Wolfers, University of Michigan economics professor and host of the new Platypus Economics channel, whose pitch for the whole series is that other countries are laboratories: the principles of economics are the same everywhere, but different rules of the game produce very different outcomes.

Case study one, drawn from a 2021 Indicator story by Stacey Vanek Smith and Darian Woods, is Australia's water market. Unlike US water rights, which are generally tied to land, anyone in Australia can buy and sell water on an exchange from a phone. Sheep farmer Carly Marriott describes what that felt like in 2019, when prices jumped from $100 to $1,000 a megalitre and outside investors were snapping up allocations the moment they hit the market — she and other farmers drove five hours to protest at Parliament in Canberra, her three-year-old on the megaphone. Economist Neil Hughes of the Australian Bureau of Agricultural and Resource Economics and Sciences argues the market works: his team's modeling puts the gains in the southern basin at about 12% of the value of water rights, roughly $117 million a year, with the biggest benefits in drought years. The government review that followed the backlash landed on three lessons: regulate water like finance, write rules for a changing climate, and share information so farmers aren't outgunned by investors with better forecasts and faster internet. Wolfers uses the fight to teach the uncomfortable core of it — markets usually grow the pie, but they never promise your slice gets bigger, and speculators can either smooth a market or inflate a bubble like US real estate in 2006.

Case study two, from a 2018 episode by Karen Duffin and Sarah Gonzalez, is how New Zealand invented inflation targeting. Arthur Grimes — central bank economist, professor of well-being, and tenor sax player in a jazz duo called Duopoly — toured the US, UK, Germany and Canada in the mid-1980s, saw everyone targeting proxies like money supply or interest rates, and decided to target inflation itself: 'zero to two by 92,' down from 9%. Don Brash was hired to be the enforcer who 'didn't give a fig,' and the target was hit a year early, in 1991 — but unemployment climbed past 11% and stayed high for years. Canada, the UK and Australia copied the idea, and Ben Bernanke's 2012 announcement of the Fed's 2% target traces straight back to it. Wolfers closes with the mechanism — multiple equilibria, where expected inflation becomes actual inflation, so a credible, transparent central bank can talk an economy into the virtuous cycle — plus Australia's exportable idea for America: Saturday elections with a democracy sausage.