Month: December 2014

Japan is in its second recession in the past two years, as its economy has contracted for the second quarter in a row. GDP decreased 1.6% from July 2014 to September 2014, despite forecasts of an increase of 2.1%. In 2013, Japan printed out hundreds of billions of dollars in yen to buy government bonds. It was an attempt to balance the budget, and while it gave the appearance of economic growth, it lowered the value of the yen. Merchants sat on the wealth and didn’t distribute it to workers. Japanese incomes began to stagnate and/or decrease. Lower wages, compounded with increased Continue reading A Quick Overview of Japan’s Current Recession→

The impact of the holiday season on our consumer economy can hardly be overstated. In addition to elevated black Friday and other seasonal shopping, we might expect Santa Claus to be a major economic force. In that spirit, researchers have put together some interesting statistics on what Santa’s operations, were they structured as a multinational corporation, might look like. Based on his job’s description of pilot and industrial manager, insure.com estimates Santa would make a salary of $139,924. (If Santa were classified as CEO, that number would likely be much higher.) NPR’s Planet Money crunched the numbers to determine the elven workforce necessary if Santa operated Continue reading Santanomics→

In most microeconomics textbooks, perfect price discrimination is seen as more of a theory than an actual business method used by firms. For those who are unfamiliar with the concept, perfect price discrimination, also called first degree price discrimination, is a form of nonuniform pricing in which a firm with market power sells each unit at each consumer’s maximum willingness to pay. The obvious issue with actually administering perfect price discrimination is that it is either impossible or financially infeasible for a company to acquire perfect information about each consumer, so they are unable to set a reserve price for each potential Continue reading Increasing Potential of Perfect Price Discrimination→

I am writing this post to follow up on a post from last spring, “Anecdotes at the Federal Reserve,” not–however much it may seem so–as an exercise in stalking Ben Bernanke. “Anecdotes at the Federal Reserve” examined Federal Open Market Committee (FOMC) meeting minutes to evaluate the use of anecdotal evidence in response to the 2008 financial crisis. Those minutes shed light on the  the personalities and the institutional dynamics behind Fed policies. In that vein, I have three little snippets about the man who was Chair of the Federal Reserve in 2008 and the environment he worked in. 1) This BusinessInsider Continue reading A Three Piece Portrait of Ben Bernanke→