The Economist Just Called out Economists

Economists are infamous for using the ceteris paribus assumption when formulating predictions on economic movement. While this holding all other things constant can be useful in examining particular sources of economic change, it can also be a downfall and lead to partial equilibrium thinking where one assumes a certain outcome based on all other things constant when in reality those other things may not truly be constant. While the assumption can be effective in the short term, it can be damaging in the long term if it fails to adjust as expected. Instead of investing more research into the reason Continue reading The Economist Just Called out Economists

Prime Minister of India Bans Currency in Country

In an effort to abolish corruption and crime throughout the country, India’s Prime Minister Narendra Modi banned the largest bills on Nov. 8 from being in circulation and printed throughout the country. How would this stop corruption, you ask? A lot of crime organizations throughout Indian benefit from the country not being able to account for all of the bills in circulation. So it’s a basic thought, if India bans these bills, then they can account for the bills that are counterfeit. These rupee bills are equivalent to $8 and $15 in the dollar but bring significant more value to the Indian Continue reading Prime Minister of India Bans Currency in Country

Breaking Down Election Statistics

Since the surprising Presidential Election results became official a myriad of theories have come to light trying to explain how or why Donald Trump was victorious. They range from believes that Hillary Clinton never really had a chance to win because a third straight Democratic term was historically unlikely to suggestions that white coastal elites shamed Midwesterners so much (through social media particularly) that it turned them against Democrats – in Congressional and Senate elections as well as the Presidential one. Other theories include 1. America is racist (Obama winning twice, not once, but twice!! makes this one far-fetched in Continue reading Breaking Down Election Statistics

The Father of Capitalism and Freedom

Milton Friedman, who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory, and the complexity of stabilization policy, came up as a relevant figure in the past weeks. He is the father of the “laissez faire” libertarian mindset that challenges what he regards as “naive Keynesian” theory. Keynes was by no means a leftist and some would even say he came to save capitalism with his theory that free markets could not be counted on to provide full employment, later creating new rationale for large-scale government intervention in the economy. Friedman is remembered by his passionate belief Continue reading The Father of Capitalism and Freedom

An Unexpected Alignment

Since the night Donald Trump was elected on the 9th, much of the country has been wondering what the future holds. A wall? A Muslim registry? But for Janet Yellen the question may be, “a job?” The native New Yorker and Chair of the Board of Governors of the Federal Reserve System was cast in a negative light throughout Trump’s campaign. Trump and his advisers criticized Yellen for playing the “political” game when implementing monetary policies.  This criticism makes sense for Trump as his campaign was based around the idea that growth will come from fiscal policies rather than monetary. Now Continue reading An Unexpected Alignment

The Problem with the Electoral College

It seems that while Hillary Clinton will win the popular vote, Donald Trump has won the election due to the Electoral College. Out of 57 Presidential elections, there have been 4 instances where the candidate that won the popular vote lost the election because of the electoral college. This happened in 1876, 1888, 2000, and now 2016, which is a failure rate of 7%. Another interesting quirk of the electoral college is that it gives disproportionately more votes to smaller states and takes votes from bigger states. This seems to benefit the GOP because many of the states that typically vote Continue reading The Problem with the Electoral College

Cuban Real Estate: Untapped Territory

To follow up Obama’s restoration of trade relations with Cuba about a week ago, it seems worthwhile to look at other aspects of Cuba’s changing economy. The state of the real estate market in Cuba, specifically in Havana, has been on the rise as Americans and foreigners have begun to look for ways to purchase Cuban property. Some of the houses in Cuba are still owned by the government, but since 2011 the state has allowed homeowners to buy and sell property. Cuba law also prohibits nonresidents from purchasing property. But this doesn’t stop foreigners from getting a piece of Continue reading Cuban Real Estate: Untapped Territory

Silent Majorities Aren’t Silent Forever

Yes, this is an Economics blog. But even an econ enthusiast like myself can recognize when to put economics in the backseat for a moment in the face of something much more important. And what can I say, the surprising election seems to be a bit more important. To seemingly all (though in reality only most) pollsters and experts this election was headed in one direction – a clear cut victory for Hillary Clinton. As late as Tuesday morning Nate Silver of Five Thirty Eight gave Clinton a 71.4% chance to win the election. He also gave Clinton an 83.5% Continue reading Silent Majorities Aren’t Silent Forever

Is a Recession Nearing?

In light of today’s big event, it is worth discussing what the winner will be faced with in the White House. There are two possible scenarios when looking at the movement of the economy- they will either face a recession in office, or have the longest economic expansion in US. History. Although the ladder seems quite more appealing, economists predict that the likelihood of a recession in the next four years at 60% You might be thinking if we know a recession is likely to come – how can we prevent it? The problem is that there are a number Continue reading Is a Recession Nearing?

Pioneering Climate Change: Initiative 732

[Written by Max Coleman] On Tuesday October 25th, the Economics Department hosted a talk about Washington Initiative 732, a carbon tax initiative which is on the ballot for November 8th. We heard from Yoram Bauman, a University of Washington professor and “standup economist,” about why we should vote yes on I-732.  Professor Bauman was one of the key economists and activists within CarbonWA, the group which brought I-732 to the ballot in its current form: “This measure was designed to impose a carbon emission tax on certain fossil fuels and fossil-fuel-generated electricity, reduce the sales tax by one percentage point, Continue reading Pioneering Climate Change: Initiative 732