Abstract
In the wake of the February 2021 Texas Power Crisis, remarkably disparate comments were flowing fast as to the root cause of the crisis. Perhaps not surprisingly, various economists offered strikingly different opinions. From a prominent electricity economist, James Bushell, the remedy lies in fixing a broken natural gas market. Two others—noted energy economist Lynne Kiesling and 2002 Nobel Laureate Vernon L. Smith, an experimental economist—believe minor changes to the wholesale market rules and incentivizing customers to be more flexible (economizing when prices rise in a fuel shortage) can help to fix the problem. Yet another, 2008 Nobel Laureate Paul Krugman, recognized in the field for his work on international trade theory and economic geography, criticized the entire philosophy behind Texas' seemingly unfettered electricity market paradigm (“essentially no prudent regulation is required … the magic of the market would take care of everything”).
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