All in Economics

Why America’s Economy Won’t Get Well Soon

Why America’s Economy Won’t Get Well Soon

Ariel Siton
Economics

If you watch the news about the current and future state of the American economy, you have likely heard nothing but depressing news. You have most likely heard that the American economy is heading towards a deep recession. You have also heard television news anchors and other commentators on social media platforms draw comparisons between the current state of the economy and its state in the 1970s and 1980s. These claims, while not entirely true, serve as a useful comparison to measure current developments in the U.S. economy. While this crisis is different from similar crises in the past, many of the same factors will extend the length of the current pitfall we as a nation are in. Nothing better illustrates the slowdown of America’s economy, among all sectors, than the recent hits to the the rental and for-sale housing markets.

Gone Cashless?

Gone Cashless?

Peyton Stanley
Economics

Leaving your wallet in the car was once a big frustration, but now all you need is one plastic card to make it through the day. As businesses across the country get rid of their bulky registers and trade it in for a sleek and minimal monitor, having a wallet full of cash won’t get you as far as it used to.

Ethiopia Industrial Policies Part 1: Value of Import-Substituting Industrial Policies

Ethiopia Industrial Policies Part 1: Value of Import-Substituting Industrial Policies

Vincent Z. Yu
Economics

Ethiopia is one of the few countries in Africa that pursues an active and comprehensive industrial policy. Ethiopia is looking to position itself as the new low-cost manufacturer of the world. To achieve its goal, Ethiopia needs proper industrial policies consideration which comprise “more particular facts than any brain could ascertain or manipulate” (Hayek 1973). The objective of the “Industrial Policies Series” is to examine current outcomes of Ethiopia’s endeavor to identify key elements in the Ethiopia-specific complexity that are pivotal to both success and failure. Targeted sectors used for our examinations are the leather sector, horticulture sector, and cement sector. In part A, a comparison between the leather, horticulture sector and the cement sector will be made to stress on the value of import-substituting policies.

Guaranteed Income Fighting Against Technological Unemployment

Guaranteed Income Fighting Against Technological Unemployment

Juan Dufour
Economics, Macroeconomic Policy

Gloomy reports and predictions that technological advances will beget massive job displacements throughout the worldwide economy in the upcoming years have caused disquiet among many individuals. Technological advances will enhance productivity and lower prices, at the cost of high unemployment and consequently poverty caused by the lack of income to those unemployed. Artificial intelligence and robotics are expanding into transportation, manufacturing, retail, medical diagnosis, translation services, legal research, banking, financial services, and many other areas. A paper by the University of Oxford predicts that about 47% of contemporary US jobs will be automated out of existence in the near future (Frey & Osborne, 2017); and McKinsey reports that one out of three American workers are at risk of losing their jobs to new technologies (Manyika et al., 2019). This is not only a domestic issue, but a global one. That same McKinsey study asserts that 800 million jobs globally are at risk; and according to The National Bureau of Economic Research, increased adoption of robots in the US decreases employment and earnings for foreign workers as well (Kugler et al., 2020). Undoubtedly, technology will disrupt employment. Ideas on how to fight back are developing among academic circles and political parties. The most prevailing idea is that of guaranteed income. We shall examine this idea. According to economic literature, a guaranteed income program has (i) a positive financial, emotional, and physical impact, (ii) but a negative labor force impact. Further, forms of guaranteed income programs vary greatly in design, ranging from a Minimum Income Guarantee (MIG) to a Universal Basic Income (UBI), to a Negative Income Tax (NIT). We shall define each program, identify if they are useful in fighting technological unemployment and poverty, and determine which would be the most effective.

Land Reform in Venezuela -- Developmental Economics Analysis on Property Rights, Part A

Land Reform in Venezuela -- Developmental Economics Analysis on Property Rights, Part A

Vincent Z. Yu
Economics

In Venezuela, the discovery of oil was an excitement for the fast and easy track it paved to wealth. Venezuela’s agricultural industry, on the other hand, was largely neglected due to over-emphasis on the oil industry. Such a tilted policy design deepened the tremendous gap between rural and urban areas, with only 12% of its population living in the rural area who produces food insufficient for the whole nation (Wilpert, 2007). Nevertheless, the greater demand for food did not fuel the welfare of the most fundamental supplier group – the farmers. Instead, it filled up the pocket of the elite class, the latifundista, as they had overwhelming property control over the key resources. Misallocation of property rights not only hinders the production power of the traditional farming class, it also causes a vicious cycle where incentives for relevant activities are nowhere to be found.

Gone Cashless?

Gone Cashless?

Peyton Stanley
Economics

Leaving your wallet in the car was once a big frustration, but now all you need is one plastic card to make it through the day. As businesses across the country get rid of their bulky registers and trade it in for a sleek and minimal monitor, having a wallet full of cash won’t get you as far as it used to.

Quantitative Easing: Its Mechanism, Aftermath, and Evaluation

Quantitative Easing: Its Mechanism, Aftermath, and Evaluation

Vincent Z. Yu
Economics

While conventional monetary policies involve mild modifications of various metrics, unconventional policies are aggressive endeavors for a short-term major impact. Quantitative Easing (QE) is a major component of it, envisioned more than a decade ago for strong stimulation of a distressed economy. QE refers to large-scale purchases of securities, through which central banks directly pump a tremendous amount of cash into the market. For example, the Fed had already reduced the federal funds rate to zero in 2008 amid economic deterioration. While some European countries pushed down the rate to its negative, the Fed announced a plan of buying mortgage-backed securities and debt issued by government-sponsored enterprises. This was the beginning of the five-year long expansion period for the Fed’s balance sheet as well as the debate over QE and its application.

Automation, From an Economic Point of View

Automation, From an Economic Point of View

Juan Dufour
Economics

In the next ten years, one out of three American workers (and 800 million globally) are at risk of losing their jobs to new technologies, according to research from McKinsey (Manyika et al., 2019). Automation, the use of largely automatic equipment in a system of manufacturing or other production processes, and Artificial Intelligence, the development of computer systems able to perform tasks that normally require human intelligence, are going to replace millions in the workplace. Many people are freaking out about this; while at the same time, many people are looking forward to it. Should we be worried about automation or should we be happy? That depends. When discussing automation it is crucial to understand that (i) we don’t want jobs, (ii) it will bring about massive economic disparity, and (iii) we must approach this future in an intelligent manner.

A Look into Rocket Mortgage’s Wholesale Competition, and Why They Might Have the Edge

A Look into Rocket Mortgage’s Wholesale Competition, and Why They Might Have the Edge

Andy Colando
Economics

Most people are acquainted, perhaps from their many commercials, with Rocket Mortgage. The fintech mortgage lender previously known as Quicken Loans is currently the largest retail mortgage lender in the United States. Rocket’s claim to fame has been its digitization of the mortgage filing process, such as allowing applicants to upload documents with their phone, personalizing information on available rates, and providing online chat features to reach out to professionals.

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