President Obama Lifts Sanctions on Importing Certain Cuban Goods

Get your Cuban cigars, get your Cuban rum. President Obama just last week lifted the restriction of bringing in over $100 of Cuban cigars and rum to the United States. This is the continued effort of improving the relations of the two countries as they slowly rebound from decades of economic stagnancy. Obama has continued to lift the trade embargo to not only improve the two’s relationship but also stimulate the economy between the United States and Cuba. The value of a fluid relationship will increase quite a bit as United States citizens will increasingly do travel and business in Continue reading President Obama Lifts Sanctions on Importing Certain Cuban Goods

Does Your Vote Count?

In light of the quote I included in a recent article about Gary Johnson (and in light of the creeping up date of November 6), “A wasted vote is voting for somebody you don’t believe in”, I sought to find reason behind this statement and ones similar to it surrounding the theory of voting. History would nudge us to believe that some votes don’t “count”. For example, in numbers of U.S. presidential elections the most popular candidate did not win. Why do some economists, specifically, choose not to vote and claim, “voting doesn’t pay”? Game theory states that your vote Continue reading Does Your Vote Count?

Drug Abuse as an Externality

In the past few months the Economist and Time Magazine have reported that there have been steps taken to develop Ketamine as an antidepressant. This drug is a schedule III controlled substance in the US that is usually used to start and maintain anesthesia. It was first produced in the 1960s for this use, but soon began to run through the “club scene” in the US, Hong Kong, and Canada as a recreational drug. In 2009 the UN’s Office on Drugs and Crime recorded 6.9 tons of Ketamine being pushed through the illegal drug market. The drug could be helpful Continue reading Drug Abuse as an Externality

Interesting Note on America’s Infrastructure

The New York Times recently posted a short article showing how bad the infrastructure has gotten in the United States and the details are quite disappointing. In the photo below from the NYT, it shows how bad the public assets have gotten across the country. It is not a good projection, and it’s a reason that presidential candidates agree to put plenty of money into the infrastructure if they become presidents. There are some other disturbing issues from the aging infrastructure as traffic has gotten worse and worse as the infrastructure has aged. That photo can be seen below this Continue reading Interesting Note on America’s Infrastructure

Economics of Nuclear Energy in the United States

With the ever increasing concern of the effect of carbon-based fuels on our climate, the need for green energy is more prevalent than ever. So what is the most used green energy source in the United States? Solar? Wind? Hydroelectric? Actually, it’s Nuclear. Nuclear power plants provided about 20% of the United States’ total electricity last year, compared with 6% from Hydroelectric, 1.6% from Biomass, 0.4% from Solar, 4.7% from Wind, and 7% from “Other Renewables.” Nuclear energy provides the same amount of electricity as all other forms of green energy combined, 20% compared to 19.7%. Many other countries get Continue reading Economics of Nuclear Energy in the United States

Hurricanes Increase GDP

In a prior post I took a deeper look at what the large epidemic, the Zika virus, will cost the world. Similar to Zika, category 3 storm, Hurricane Matthew, is a type natural “disaster” that will have an unstoppable effect on the economy. There are at least 200,000 homes along the coast from Florida to North Carolina at risk of damage from the storm surge alone. Due the potential to affect such a broad geographic area, some sources are claiming that Matthew could be one of the costliest hurricanes in U.S. history estimated to cost just Florida as much as Continue reading Hurricanes Increase GDP

And the 2016 Nobel Prize in Economics goes to…

While most of us were sleeping this morning the Royal Swedish Academy of Sciences announced that Oliver Hart and Bengt Holmstrom were awarded the 2016 Nobel Prize in Economic Sciences “for their contributions to contract theory.” Hart, an English-born economics professor at Harvard, and Holmstrom, a Finnish-born economics and management professor at MIT, received the award for improving the design of contracts. Hart and Holmstrom are two giants in contract theory. Though the first formal treatment of contract theory was given by Kenneth Arrow in the 60’s, the pairs’ work, which began in the 1970’s, helped establish contract theory as Continue reading And the 2016 Nobel Prize in Economics goes to…

Fascinating Idea to Keep Coal Market Burning

In the past couple of years, we have seen the energy market completely turn around. We’ve seen the demand for natural gas increase while reliance on coal has continued to decrease. Add that to increased use of renewable energy in the form of wind, solar etc. and it spells big time trouble for the coal industry. President Obama has continued to push away the use of coal and tried to focus on slowing down Global Warming in the form of renewable energy and agreements across the world. Coal companies are being forced  to shut down because of how much Carbon they contribute to the atmosphere and Continue reading Fascinating Idea to Keep Coal Market Burning

Could Private Universities Face an Adverse Selection Problem?

George Akerlof’s ultra-famous paper “The Market for Lemons: Quality Uncertainty and the Market Mechanism” introduced adverse selection as a consequence of information asymmetry. Akerlof noticed that in markets where sellers have more information than buyers, the average value of the good tends to go down, even for those of high quality, which causes sellers of high quality goods to exit the market eventually leading to a market collapse. Buyers are weary that unscrupulous sellers may be looking to rip them off so they avoid buying higher quality goods, “peaches,” and instead only buy ones of lower quality “lemons.” Since they Continue reading Could Private Universities Face an Adverse Selection Problem?