Sound Economics

For more than a century, Corn Flakes have been a staple cereal in American diets everywhere. This crispy golden flaked cereal was initially released in 1894 and since has been led by their main mascot Cornelius, a green cartoon chicken who has been the centerpiece of their simplistic box design since the mid-1960s. However, since late January, Cornelius has begun to cause conflict regarding laws around exportation in Mexico. Mexican officials as of now have confiscated 380,000 boxes of Kellogg’s Corn Flakes raiding warehouses north of Mexico City. The reasoning behind this: Mexico has multiple intertwined laws affecting marketing around Continue reading Cerealnomics→

Last April, the U.S. Congress advanced H.R. 40, the Commission to Study and Develop Reparation Proposals for African-Americans Act, for committee consideration. In 1989, Congressman John Conyers first introduced the bill. Since then, H.R. 40 has been re-introduced at every congressional session but never reached a committee vote. The bill would form a 13-member federal commission to examine the sources of racial discrimination and voter suppression that date back to the United State’s enslavement of Black people. This federal commission would then present policy proposals to Congress for redress and repair, including reparations. Reparations refer to an economic system of Continue reading Reparations, Explained→

In the early 15th century, the Inca Empire extended along the Pacific coast and into the Andean mountains across Ecuador, Peru, northern Chile, Bolivia, upland Argentina, and southern Colombia. At its peak, the empire consisted of 12 million inhabitants from more than 100 different ethnic groups. The Qhapaq Ñan, a 30,000-kilometre-long transportation and communication system, was central to the empire’s expansion and exchange-based economy. In its construction, the location of this road system was not random but determined by social, economic, and geographical factors and patterns. What’s more, while this network was the spine of the Inca Empire, it also Continue reading Qhapaq Ñan and Long-Term Economic Development→

            Winter Break is here. Omicron is threatening. Time to settle in at home and break out the board games.             Settlers of Catan is a strategy game where smart resource management and deal making wins the game. Unlike Monopoly, where winning is dependent on ruthlessly bankrupting your opponents in a zero-sum game, Settlers of Catan more closely exemplifies the free market and capitalism. In Catan, each roll of the dice produces resources for everyone, potentially increasing overall wealth for all players. Like international trade relations, there must be a balance between competition and cooperation, because resources are constrained and Continue reading Catan-nomics→

Many believe Black Friday got its name because it is the time of year when traditional retailers moved from the red into the black because of their after-Thanksgiving sales, but the term Black Friday was first used to describe something completely different.             In September 1869 two robber barons, Jay Gould and Jim Fisk, colluded to buy as much of America’s gold as they could in order to drive the price up. Then the two planned to sell it at a huge profit. Instead, they caused the stock market to collapse the next Friday, hence the term, Black Friday.             Continue reading Black Friday→

The climate policy landscape is shaped by the cost-benefit concept of discounting, where discount rates are an exogenous parameter in determining the rate at which governments achieve climate mitigation goals like decarbonization. Discounting refers to the present-value evaluation of a future event or a project with a long-run profile. That is, when a cost or benefit is in the future rather than in the present, those values are not directly comparable to present-day values and are discounted. To understand how discounting has led to insufficient climate action, an explanation of its technical operations is first necessary. Here, we offer an Continue reading Discounting, Explained→

Inflation is bad. Is it even worse than we think? The Commerce Department announced on October 29th, 2021 that inflation rose 4.4% in September, the fastest pace in thirty years. While it’s easy to ignore from an uninformed perspective, food and gas prices rising have hit consumers hard during the pandemic. Energy costs were up almost 25% and food prices were up 4%. But is inflation even worse than reported? Are the government statistics accurately capturing how bad inflation really is? There are actually other forms of inflation called Shrinkflation and Skimpflation, but these concepts are less well known and Continue reading Shrinkflation and Skimpflation→