Posts tagged with: economy

Blog author: jcarter
Tuesday, December 20, 2016
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Most consumers have heard of fair-trade coffee, but have no idea how fair-trade actually works. In this video, economist Victor Claar covers the basics of the fair-trade model, and explores whether fair trade can deliver on its promises to help the poor. Fair trade can also be used to vividly illustrate many key concepts in a principles of micro class, note s Claar, such as price elasticity and monopoly power.

Note: This is post #14 in a weekly video series on basic microeconomics.

What’s the difference between a wage subsidy and a minimum wage? What is the cost of a wage subsidy to taxpayers? Economist Alex Tabarrok looks at the earned income tax credit and how it affects low-skilled workers.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: What you should know about subsidies

Blog author: jcarter
Friday, December 16, 2016
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During the holiday shopping season the media inevitably talks about consumer spending, and how it is vital to economic growth and job creation. But if people are buying more that means that are saving less. Does that mean saving is bad for the economy? Can we really spend our way to prosperity?

Blog author: jcarter
Tuesday, December 13, 2016
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Note: This is post #13 in a weekly video series on basic microeconomics.

What is a subsidy? A subsidy is really just a negative or reverse tax, explains Alex Tabbarok. Instead of collecting money in the form of a tax, the government gives money to consumer or producers. In this video by Marginal Revolution University, Tabbarok looks at the subsidy wedge and who benefits the most from different subsidies.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Understanding tax revenue and deadweight loss

Global-Communications-900Free trade and trade agreements are not the same thing. In fact, they are often times in direct contradiction with each other. Acton Director of Research Samuel Gregg recently wrote an article about this at The Stream. Gregg explains how all trade agreements are ‘managed trade,’ not free trade. He explains how free traders should approach the issue of economic nationalism and the best ways to work toward freer trade. Concerning the issue of trade agreements and managed trade, Gregg says this:

There’s no-one-size-fits-all form of trade agreement. Some are bilateral arrangements between two nations. Others are multilateral and embrace several nations. Within that framework, there are several possible arrangements.

You can have, for instance, single markets like the European Union. These involve the free movement of goods, services, capital and labor between all member-nations of the single market. But barriers are maintained or created against all non-single market members. Another model is a preferential trade area. Participating nations give preferential access to certain products from all the area’s members. Tariffs are reduced, but not completely abolished.

Note, however, that all trade agreements involve two or more governments negotiating how their citizens economically interact with each other. That also means they’re indirectly deciding how the same citizens will economically engage with people from nations who aren’t part of the trade agreement.

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12-daysIf you’ve been stuck at the mall listening to a song about ten Lords a-Leaping and eight Maids a-Milking you can blame the Jesuits.

Rumor has it they invented the Twelve Days of Christmas song as a catechism in code for persecuted Catholics in 16th-century England. The claim is that each of the items has a coded meaning (Old and New Testaments are the two turtle doves; three hens are the Wise Men; the Evangelists are the four calling birds; five gold rings speak of the five sacraments that should be received by all Catholics, etc.).

Whether that is true or not we’ll leave to the musicologists to decide. Since this is an economics blog will look at another question: How much would all that stuff cost?
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Note: This is post #12 in a weekly video series on basic microeconomics.

Why do taxes exist? What are their effects? In this video by Marginal Revolution University, economist Alex Tabarrok explains how taxes affect consumer surplus and producer surplus. He also discusses the concept of deadweight by considering a real-world example from the 1990s: taxing luxury yachts.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Who pays the tax?