Tariffs: Expectations vs. Reality

The purpose of Trump’s steel and aluminum tariffs is to protect  domestic suppliers and firms as well as to encourage steel/aluminum production in the United States . Tariffs, in general, are a tax on imports to increase the price which results in a larger producer surplus, revenue collected on account of the tariff, and deadweight loss. Overall, tariffs create market inefficiency and hurt the wellbeing of an economy because of it. Of course, there are many more factors to think about. The market for steel and aluminum affects much more than just those involved in the production. It affects all Continue reading Tariffs: Expectations vs. Reality

Labor Unions and Structures of Bargaining

The 2020 Presidential Candidates have brought the American labor movement back into the dinner table conversation. Labor unions have a long history of influencing and often raising the wage rate of the labor market. Collective bargaining allows for this to occur as workers are able to gain more power than the system would have otherwise permitted. If they are successful, the push to a wage above the equilibrium creates a greater supply and decreases the demand for labor in unionized firms as companies now have to meet a superior labor cost. In the twentieth century, many firms in this enterprise-level Continue reading Labor Unions and Structures of Bargaining

Yield Curve and Politics 101

The yield curve (showing investment rates over time) is an indicator of an economy’s health. When the curve is sloping up, the economy is expanding and overall doing well. It is when the curve starts to level out that it becomes worrisome as this generally means that an economic slowdown – or recession – is on the rise. Looking at the curve’s latest data from the U.S Department of the Treasury, we are bound to see a slowdown very soon. Slowdown or Recession?: “The United States does not define a recession as two consecutive quarters of shrinking output” however that Continue reading Yield Curve and Politics 101

Air Travel is Costing Us

The threat of climate change is growing at alarming rates and one player in particular is not helping: airlines. Air travel is one of the most efficient means of travel, but what is it really costing us? Even though air travel is a form of shared transportation (something we tend to think of as having positive externalities associated with lowering our carbon footprint), it is actually making us worse off. Right now, air travel accounts for 2.5 percent of global carbon dioxide emissions, but in thirty-one years, it could take up to a quarter of the world’s carbon budget. In Continue reading Air Travel is Costing Us

The Economics Behind Prison Labor

All able-bodied inmates in federal prison are required to participate in labor with average daily pay well below minimum wage. A small population of the prison labor force participates in jobs outside the facility and jobs in private businesses. The figures for private business are widely disputed, but the Federal Prisons Industries has referred to it as a cost-effective labor pool and onshore advantage for competitive American companies. Seizing the well-marketed opportunity, hundreds of firms are allegedly providing systems of redemption for inmates through this form of employment, but the low or absent wages advantage the employer the most. As Continue reading The Economics Behind Prison Labor

Really Economics?: Ending Old Practices

Really Economics? I say this phrase as just this month, the hiring practices for all Economists has changed from occurring in hotel rooms to actual interview spaces. It is pretty astounding that it took until 2019 for the American Economic Association to realize it was not a good practice for young, female, post-docs, to be interviewed in closed hotel rooms (or for that matter young post-docs at all). Though it is astounding that this practice did not end until recently, it is not surprising: economics is a pretty homogeneous discipline. According to data taken from the census bureau, over 70% of Continue reading Really Economics?: Ending Old Practices

Thesis Corner – Jack Gries

For my blog post, I had the privilege of interviewing fellow graduating senior Jack Gries about his Economics Thesis. Look below for more information about his work! I would like to thank Jack Gries for his time and energy in answering the questions below. What is the topic of your thesis? De-risking private investing into smart grid infrastructure. Basically, I looked at different ways to make investing into smart grid infrastructure more appealing to the investment community. I looked at ways to de-risk smart grid technologies so there is less variability in return. I also looked at to what threshold Continue reading Thesis Corner – Jack Gries

Thesis Corner – Peter Henning

This edition of Thesis Corner focuses on Peter Henning’s research into China’s ongoing domestic and foreign economic development plans that has been dubbed in some circles, a “Beijing Consensus”. A little context is needed to understand the implications of the term “Beijing Consensus”. It is a direct reference to the economic policy plans the US built its economic aid, reform, and development plans in less developed countries around the world. The goal at hand was the promotion of neoliberal free market economies and aggregating US power and increasing the number of liberal democracies globally. Peter argues that examples can be Continue reading Thesis Corner – Peter Henning

The Men’s Underwear Index

Arguably the most famous central banker of all time, Alan Greenspan is frequently referred to as “the maestro” for his work as the chairman of the Federal Reserve. Despite his renown, he was also known to use quite an obscure index to assess the overall health of the American economy. Understanding the index is simple, decreasing sales of men’s underwear indicate a poor overall state of the economy at large while increasing sales suggest health. His reasoning: only in times when people are comfortable and confident in the economy will the spend money on something they do not necessarily need. Continue reading The Men’s Underwear Index