Category Archives: Economics

Many Mouths to Feed

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Those that live in poverty spend differently than those with a higher income. In general, poorer individuals have a higher marginal propensity to consume and spend a majority of their income on food. The ability to afford food provides greater health and well being. Poorer countries often use subsidies to make food prices artificially low, but governments may find that subsidizing food costs for buyers can have significant benefits. Subsidizing food costs can push the supply or demand side of the market. When food subsidies go to farmers supply is pushed out; when they go to consumers, demand shifts out. Continue reading Many Mouths to Feed→

Thesis Corner: YouTube’s Impact on the Video Content Market

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Flashback to the Super Bowl in 2004. Remember who was playing? Neither do I. But this was a historic Super Bowl because it was when Justin Timberlake indecently exposed Janet Jackson’s breast during the halftime show. The day after, Chad Hurley, Steve Chen, and Jawed Karim, heard all commotion about the incident but missed it. Unfortunately, none of them could find a video of the episode, so they were out of the loop. This miniature tragedy helped plant the idea of YouTube, a realm allowing easy sharing of video content among users. Perhaps YouTube’s history gave you a chuckle, but Continue reading Thesis Corner: YouTube’s Impact on the Video Content Market→

More Evidence on the Effects of Raising the Minimum Wage

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Following up on Collin’s article “$15 Minimum Wage.. It’s Happening Now”, the CBO has recently released it’s report on the economic impact of raising the minimum wage to $10.10 an hour. A New York Times Economix Blog article pulls a few nuggets from the report: -An estimated 16.5 million low-wage workers will see their wages increase as a result of the minimum wage increase. -900,000 people who are currently impoverished will move above the poverty threshold. -Raising the minimum wage will reduce low-wage employment by roughly 500,000. The article even questions the employment loss estimates as being too high, noting that the most precise Continue reading More Evidence on the Effects of Raising the Minimum Wage→

15$ Minimum Wage.. It’s Happening Right Now

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We’ve all heard the hullabaloo about potentially raising the minimum wage in Seattle. Well as of January 1st, Proposition 1 went into effect in the City of Seatac, which endorsed a 15$ minimum wage and paid sick leave. Additionally, employers must promote part-time workers to full time before hiring more employees and retain employees for at least 90 days after a change in ownership. So why haven’t more people heard about it? Where are all the dramatic and radical effects that were predicted? A recent article from the Seattle times states that Prop 1 “has not created a large chain reaction of lost Continue reading 15$ Minimum Wage.. It’s Happening Right Now→

Fantasy Economics

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Bored with your fantasy football league? Ever considered switching its basis in sport out for something more exciting, like economics? This not-so-common fantasy of fantasy economics turns out to be a reality. It’s called the IDEAS Fantasy League  The league functions just like a fantasy football league except that instead of simulating a sports franchise, the league “allows you to pretend you are at the helm of an economics department.” The goal is essentially to stuff your team with economists whose publications receive the most attention: downloads, abstract views, and citations in other publications. Some interesting nuggets from the rules of Continue reading Fantasy Economics→

GDP, the difference between a good tool, and the right tool.

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News stations report on it, economist and statisticians analyze it, policy makers inform the public of it. The Bureau of Economic Analysis calculates this standard measure quarterly. Gross Domestic Product (GDP) measures the level of all goods and services produced during a given time period. There are two ways of calculating GDP. One way is to add up the cost of all goods and services produced at the market price. This is not the units sold, but solely the units produced during that time period. This reflects the supply side of GDP, but does not take into account inventory from Continue reading GDP, the difference between a good tool, and the right tool.→

Thesis Corner: An Introduction to Bitcoin

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Imagine that one day you woke up and someone told you, “Hey, these M&Ms over there have monetary value. Go ahead and buy whatever you want with them”. Okay, so M&Ms may be a bit facetious, but that scenario pretty much describes the origin of Bitcoin. If you’re a millennial like me, our trust in currency has always been anchored in the US dollar. We’ve been trained and conditioned to believe it’s worth something despite being a measly piece of paper. Now we are told these “Bitcoins” are equivalent to money too? Madness! What does this mean to money as we Continue reading Thesis Corner: An Introduction to Bitcoin→

BLS and CPI: Measuring Inflation

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For the unfamiliar, I’ll open with a quick and rudimentary explanation of the term inflation. Economists define it as a measure of changes in the purchasing power of a dollar. Inflation occurs when prices for goods and services increase across the board; almost everything—from hotdogs at baseball games to boxes of pencils—becomes more expensive. Many complex factors interact to affect inflation, but this post will focus on quantifying it, a tricky matter itself. The Bureau of Labor and Statistics (BLS)—a federal agency—works hard to estimate it with their Consumer Price Index (CPI). Their approach centers on a shopping basket, or Continue reading BLS and CPI: Measuring Inflation→

Opportunity or a Trap? The Economic Impact of Scottish Independence

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The contention between Scotland and England is a historical issue and there have been calls for Scottish Independence for hundreds of years. In the past these views have been dismissed, but under Scottish Prime Minister Alex Salmond, Independence has taken a new seat in the headlines. While there are surely deep national and politic issues surrounding this topic, what would succession mean economically? Independence for Scotland would offer a buffet of options that were not available say 60, or even 20 years ago. Unexhausted rich oil reserves along the Scottish coast are a hot topic when talking about potential Scottish Continue reading Opportunity or a Trap? The Economic Impact of Scottish Independence→

On Tails

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Tail events, in probability speak, are extreme events with the potential for a very large impact but which have a very low likelihood of occurring. Many people (I think accurately) view the most recent financial crisis as the occurrence of a tail event: it was highly unlikely that the system would experience such a drastic collapse, but it happened. We might consider the change of nuclear war or alien invasion as a tail risk. In N. Nassim Taleb’s The Black Swan, Taleb discusses the dangers of such risks with an analogy: even if you have encountered thousands of swans in your lifetime, and have never Continue reading On Tails→