Category Archives: Economics

The NBA Losing Problem

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If you have been paying attention to the NBA recently, you may notice a few teams that are aspiring to lose as many games as they can. The Philadelphia 76ers have just lost a franchise record 26th game in a row, and it is quite possible that they will lose the rest of their games this season. This would appear to be a disappointment for the franchise, but it is all part if a greater plan. This losing streak, and entire season, was orchestrated by the organization. Before the February 20th trade deadline, the team traded their two best and Continue reading The NBA Losing Problem→

Thesis Corner: Is Hosting the Olympics Really Worth the Gold (Standard)?

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Throwing a giant party is a daunting task. It requires a lot of pre-planning, a lot of money for food and entertainment, and a lot of time cleaning up after everyone has gone home. Now imagine hosting the world’s biggest party – the Olympics. The intense competition between countries as they fight to win the bid for host suggests that the benefits of hosting the Olympics outweigh the costs. But is hosting the Olympics really all it’s cracked-up to be? Senior, Holly Ross explores and critiques two common methods of analysis countries use when deciding whether or not to put Continue reading Thesis Corner: Is Hosting the Olympics Really Worth the Gold (Standard)?→

Poverty, Equitable Taxation, and the Earned Income Tax Credit

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Along with his proposal to raise the minimum wage, President Obama is trying to tackle poverty with a broad expansion of the Earned Income Tax Credit (EITC). The EITC program essentially gives those earning around and below the federal poverty line ($12,566 a year) a tax credit when they file their taxes. In 2012, it helped lift 6.5 million Americans, including 3.3 million children, out of poverty. President Obama is currently proposing a $60 Billion expansion of the tax credit’s benefits over 10 years. The program’s expansion will in part help to provide greater benefits to childless workers. Currently, the Continue reading Poverty, Equitable Taxation, and the Earned Income Tax Credit→

The Importance of Virtual World Economics

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How much would you pay for a virtual spaceship? Ten dollars? One hundred dollars? One thousand dollars? Try $10,000. Yes, for a virtual spaceship. With online gaming on the rise, what can we expect to see from games like World of Warcraft, Eve, and Second Life? Well there are big spenders, like the hot shots that own Titans in the massive interstellar reality Eve, which go for $10,000. Then there are people who have quit their day jobs to pursue a full-time career in acquiring and selling virtual items. What you have is a free market consisting of potions, laser Continue reading The Importance of Virtual World Economics→

The Market Was Down

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Newsmedia commonly personify “the market,” announcing “the market climbed today on news of a stellar jobs report” or “instability in Thailand sent shares tumbling.” Perhaps this simplification is a symptom of the unpredictability volatility of stock prices, a result of broad apathy towards the mechanisms behind the loose moniker “market,” or merely shorthand convenience for journalists. Whatever the cause, the market exists in the public imagination as a mysterious, moody beast. B.J. Novak’s short story “The Market was Down” takes this anthropomorphism to its logical extreme. He writes: “Why was the market down? No reason. Well, stupid stuff. Actually, to Continue reading The Market Was Down→

Obama Reaches out to Young America

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President Barack Obama has been looking for ways to get young Americans to sign up for healthcare under the Affordable Care Act. Recently he appeared on Funny or Die to do a mock interview hosted by Zach Galifianakis (best known for the Hangover). It is interesting to see a President play a comedic role. The Economist follows up on the interview with a few stats to shed light on the trends in health care enrollment. The deadline to sign up for healthcare without a penalty is April 1st and Obama is hoping to get as many people enrolled as possible. Continue reading Obama Reaches out to Young America→

Are Local Tax Incentives for Businesses Worth Their Cost?

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For my senior thesis, I examined how cities react to economic decline. An all too common reaction by local governments is to offer more and more tax rebates and monetary incentives to try to attract large businesses. These incentives can range from sales, corporate, and property tax reductions, to guaranteed loans, and in some cases straight up cash. In total, local governments in the US spend $80 billion a year on business incentives. An article in the New York Times from 2012 paints a good picture of the problem. Now you may say, “Well isn’t it worth it in some cases for Continue reading Are Local Tax Incentives for Businesses Worth Their Cost?→

The Ukrainian Economy: Stuck in the Middle

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On March 1st, the Ukrainian Parliament called on the U.N. security council for an emergency meeting regarding the military actions of Russian troops in Ukraine. President Obama has threatened to place trade sanctions on Russia if the militia are not removed and Putin insists that this force is a response to provocations from Ukraine. Secretary of State John Kerry has promised a billion dollar aid loan to the Ukrainian government. Details are pouring out daily as the event unfolds and all eyes are on Ukraine and Russia. (For those of you who may be confused, check out this link.) Ukraine may have Continue reading The Ukrainian Economy: Stuck in the Middle→

A Glimpse into the Federal Reserve

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The Federal Reserve recently released a transcript of their Open Market Committee (FOMC) meeting in September 16, 2008. The FOMC oversees the Fed’s “Open Market Operations,” purchase and sale of bonds; the Fed controls our money supply through this mechanism. It makes sense for the operational arm of the Fed to convene bright and early—8:30am—that day. This meeting took place in the thick of the financial crisis. Chairman Bernanke opened the session: “Good morning, everybody. Sorry for the late beginning. The markets are continuing to experience very significant stresses this morning, and there are increasing concerns about the insurance company AIG.” The Continue reading A Glimpse into the Federal Reserve→