Sound Economics

It’s been a solid 26 days since the beginning of the new year, and I would bet that most resolutions–especially fitness resolutions–have fallen flat by now. Well, it turns out that maybe fitness resolution-makers shouldn’t carry the full burden of blame for their failings. In some ways, the system is stacked against them. NPR’s Planet Money scrutinized the business model of typical gym in a recent podcast episode. A brief summary of their observations: It’s not in the interest of gyms’ financial interest to have frequently-attending members. More use means more cost (replacing machines, cleaning up, providing paper towels for de-sweatifying things), Continue reading New Year Resolutions?→

Japan is in its second recession in the past two years, as its economy has contracted for the second quarter in a row. GDP decreased 1.6% from July 2014 to September 2014, despite forecasts of an increase of 2.1%. In 2013, Japan printed out hundreds of billions of dollars in yen to buy government bonds. It was an attempt to balance the budget, and while it gave the appearance of economic growth, it lowered the value of the yen. Merchants sat on the wealth and didn’t distribute it to workers. Japanese incomes began to stagnate and/or decrease. Lower wages, compounded with increased Continue reading A Quick Overview of Japan’s Current Recession→

The impact of the holiday season on our consumer economy can hardly be overstated. In addition to elevated black Friday and other seasonal shopping, we might expect Santa Claus to be a major economic force. In that spirit, researchers have put together some interesting statistics on what Santa’s operations, were they structured as a multinational corporation, might look like. Based on his job’s description of pilot and industrial manager, insure.com estimates Santa would make a salary of $139,924. (If Santa were classified as CEO, that number would likely be much higher.) NPR’s Planet Money crunched the numbers to determine the elven workforce necessary if Santa operated Continue reading Santanomics→

In most microeconomics textbooks, perfect price discrimination is seen as more of a theory than an actual business method used by firms. For those who are unfamiliar with the concept, perfect price discrimination, also called first degree price discrimination, is a form of nonuniform pricing in which a firm with market power sells each unit at each consumer’s maximum willingness to pay. The obvious issue with actually administering perfect price discrimination is that it is either impossible or financially infeasible for a company to acquire perfect information about each consumer, so they are unable to set a reserve price for each potential Continue reading Increasing Potential of Perfect Price Discrimination→

I am writing this post to follow up on a post from last spring, “Anecdotes at the Federal Reserve,” not–however much it may seem so–as an exercise in stalking Ben Bernanke. “Anecdotes at the Federal Reserve” examined Federal Open Market Committee (FOMC) meeting minutes to evaluate the use of anecdotal evidence in response to the 2008 financial crisis. Those minutes shed light on the  the personalities and the institutional dynamics behind Fed policies. In that vein, I have three little snippets about the man who was Chair of the Federal Reserve in 2008 and the environment he worked in. 1) This BusinessInsider Continue reading A Three Piece Portrait of Ben Bernanke→

Hello, my name is Miranda Kraus, and I’m a coffee-holic. Ever since I thought it would be “cool” and “adult-like” to start drinking coffee my freshman year of high school, I’ve developed a physical and psychological need to drink at least a cup every day. Frighteningly, I’m not in the minority. The National Coffee Association reported that 54% of Americans over the age of 18 drink coffee every day. The United States alone buys more than 22% of world coffee imports, which shows an interesting wealth polarity between the consumers and producers of coffee. Coffee is the second most valuable Continue reading Coffee and Fair Trade→

For all of you Snapchat users, I’m sure you received a snap from the creators of the app informing you about their new direction for the app called Snapcash. This is the exciting new opportunity to send cash to your friends and have it disappear in 10 seconds!! Not actually, but thats what I thought when I heard of it first. Snapchat is teaming up with Square, the company who created the mobile credit/debit payment accessory for Apple devices, to offer a payment option through the Snapchat app. Snapcash will allow users to send payments from their account to their Continue reading What is Snapchat doing with Snapcash?→