August 2012 Archives

I'm reposting this blog entry because it illustrates nicely the difficulties in dealing with data, and data is key in understanding the economy.  Theory is necessary, but without data to check it's validity... 

Quotable Quote - "Data rarely speak for themselves. There's almost always some folklore, known to initiates, about how data should and should not be used. As the web transforms the availability and use of data, it's essential that the folklore be democratized as much as the raw data themselves."

Niall Ferguson's Mistake Makes the Case for Metadata - August 22, 2012

An interesting article on robotics today and trends for the future.  My introductory economics class this semester will have writing assignment that are partly graded by machine.

Skilled Work, Without the Worker
- August 18, 2012

Minimum Wages

from Tuesday's Deseret News

The current federal minimum wage is seven dollars and twenty-five cents per hour.  For an employee working 40 hours per week for 52 weeks that amounts to an annual before-tax income of  $15,080.  By comparison the official poverty level for a family of two is $15,130 or $23,050 for a family of four.  The minimum wage does not support a high standard of living by any stretch of the imagination.  However, just imagine how bad things would be for workers without the minimum wage.

What is Quantitative Easing?

Deseret News, August 6th

Speculation has been building of late that the U.S. Federal Reserve - or "The Fed" - will soon begin another round of quantitative easing.  The Fed has already engaged in two rounds, the first running from late 2008 to mid-2010 and now known as QE1, and again from late 2010 to mid-2011 known as QE2.  So this round, if it happens, would be QE3.  Quantitative easing is not the usual method for conducting monetary policy, but it's also not as different as most people think.

Problems with Pay-as-you-go

From the Deseret News, July 16th

The U.S Social Security system is in big trouble.  While the trust fund balance today is just over two and half trillion dollars, this amounts to about four years of benefits payments.  And while the balance on the trust fund has been rising every year since the fund was created in 1987, it will not be long before demographics cause that trend to reverse.  We need to reform Social Security and the longer we wait, the bigger the burden of reform we become.

June 11th, 2012 Deseret News

On June 4th, President Barack Obama delivered a campaign speech at the New Amsterdam Theatre in New York City.  In that speech he noted that his Republican rival in the upcoming election, Mitt Romney, "has a theory of the economy that basically says, if I'm maximizing returns for my investors, for wealthy individuals like myself, then everybody's going to be better off."

We could debate whether this statement accurately reflects Mitt Romney's views on capitalism, but for the sake of this article let's assume it does.  So what?  Is it really that bad to believe that people motivated by self-interest, even selfish and greedy self-interest, can collectively arrive at an efficient and equitable outcome?

Greed and Monopoly

From the Deseret News May 29th:

One of the basic assumptions of economic theory is that people as economic agents make decisions with the goal of becoming as well-off as possible.  Economists call this maximizing utility, where the term utility roughly corresponds to well-being, level of satisfaction, or maybe happiness.  This key assumption seems to reflect human nature, at least as an approximation.

Authors

  • Richard W. Evans is an Assistant Professor of Economics at Brigham Young University

  • Jason DeBacker is an Assistant Professor of Economics at Middle Tennessee State University

  • Kerk L. Phillips is an Associate Professor of Economics at Brigham Young University