Hot Economics

The States Grow Restless as an Empire Wanes

2010-08-12T18:00:00.000-04:00

There is a long tradition in the United States of dissent among the States toward the Federal Government. The battle between State and Federal power has been constant since the birth of the nation. In the decades since World War II, however, it is quite clear that the balance of power has shifted decisively toward the Federal Government. Lately, I've theorized that the nation as a whole would

European Debt Crisis: A Comprehensive Analysis

2010-06-24T17:30:00.000-04:00

Introduction I have to confess that when I first heard of the European debt crisis I was overcome with joy. This was for three reasons. First, I demonstrated that the European Monetary Union was, collectively, in a much more precarious fiscal condition than the United States in a class I had at Rollins in the spring of 2009 where the teacher openly mocked me for suggesting

The European Debt Crisis: A Comprehensive Analysis

2010-06-24T17:28:00.000-04:00

Energy As Currency: Cat Is Out Of The bag.

2009-09-27T00:40:00.002-04:00

What follows is a response of mine to an article that I'm about to post over on one of my favorite blogs, The Oil Drum . I posted my response here, first, simply to ensure that I'm credited with my own work (indeed, I have an enormous amount of work into this idea). The time stamps should evidence that what follow is my post, my idea, and, incidentally, reveal my identity on the blogosphere as

Food for Thought: Unemployment Irony

2009-09-24T17:19:00.000-04:00

I think it is safe to say that just about everyone sees unemployment as a bad thing. I'm going to go out on a limb here and say that unemployment is actually a good thing and that it is a sign of progress. Consider the case of yourself being stranded alone on an island. In order to survive, you must perform quite a bit of work: you have to gather fresh water, gather food, gather firewood, cook

Who Loses? Who Wins?

2009-09-20T00:01:00.000-04:00

I had an interesting conversation today with a fellow academic about the U.S./China dynamic. It went like this: Friend: We (the U.S.) are regulating ourselves into poverty with all of these environmental restrictions Me: Really? How? Friend: First we can't use DDT, we lose all of our citrus to South America, then we have water quality regulations and we lose all of our manufacturing to China.

Personal Note: Qualifying My Attack On The Left

2009-09-15T01:17:00.000-04:00

I just thought I'd fill my readers in on something: I'm a huge fan of the free market system. Throughout my blog, I'll frequently attack the left (almost exclusively) for their attacks on the market system. I should qualify and explain these attacks: I believe (though I cannot yet prove) that the market is the way of nature that a market system is the most efficient economic system obtainable

Economic Theory: Efficient Markets, Leverage, and Rational Market Participants

2009-09-14T10:38:00.055-04:00

It seems that it is in vogue to question the fundamentals of market economies these days. Understandable. While driving back from breakfast this morning, I was listening to Marc Faber being interviewed by Tom Keene on Bloomberg. They were discussing the idea of leverage in efficient markets with the innuendo being that efficient markets shouldn't need leverage (Faber flatly denied this saying,

Markets and Information: Left vs. Right

2009-09-11T00:24:00.000-04:00

Sorry this post was a little late today but I guess better late than never. Unless we're talking about delivering anti-venom. Then never is probably better because if the anti-venom arrived too late it would be like "hey, you could have lived if it wasn't for that red light" and it would be the worst tease ever. Anywho.... One of my classes today (Income and Wealth Distribution) focused on

The Debt Cycle: Loan Duration and Credit Crisis

2009-09-09T14:29:00.003-04:00

I'll be honest. I'm pretty proud of this one. After flipping through all of my economics books and numerous google searches I can confidently say that I've devised an original visual representation of debt in the business cycle. If any of my readers have seen such a representation elsewhere, feel free to burst my bubble in the comments section. What prompted this maddening exercise in MS Paint

The Dollar: Up Or Down?

2009-09-08T13:29:00.000-04:00

This is going to be a quick post. The value of any currency moves with changes in the relationship between productive capacity and currency supply. Faith plays a huge role but, for simplicity, we'll do away with faith here. Many pundits have been calling for the dollar to crash citing the large monetary expansion undertaken by the Federal Reserve in an attempt to combat the recession/depression.

Long Term Solution: Education as a Market Force 1.0

2009-09-06T22:13:00.000-04:00

Economics is unique in comparison to the other sciences in that the way we observe the world has a very large impact on how the world actually works. If an astronomer improperly observes the movement of stars it doesn't actually change the way those stars move. If a physicist theorizes some physical constant, it doesn't alter whether or not that constant exists or what the metrics of that

Currency: An Alternate View to a Collapse

2009-09-06T10:41:00.000-04:00

The Chinese have approximately $2,000,000,000,000 (that's trillion) in foreign exchange reserves. About half of that is held in U.S. government bonds with the remainder held in other currencies (euros, rubbles, etc.). The popular theory goes that China cannot afford either the default or a significant weakening of the U.S. dollar as it would batter it's own currency, the renminbi, and the savings

Unemployment: We Don't Need You Anymore

2009-09-05T11:34:00.000-04:00

The goal of this post is to investigate the necessary employment of the United States. That is to say, the number of people that actually have to work in order for all of us to survive. For the sake of this post, survival will constitute the availability of food, water, shelter, and energy. My methods are a bit shady but will suffice for a quick post and to convey my message: we really don't need

Healthcare: Whatever Happened to General Equilibrium?

2009-09-04T23:40:00.000-04:00

Economists seem to love general equilibrium. For those non-technocrats, general equilibrium is the state sought by the forces of supply and demand. General equilibrium tells us that doctors, and health-care services in general, command such a high price because (1.) they are in short supply relative to demand and/or (2.) their price is commensurate to the amount they have invested in developing

"Please allow me to introduce myself...

2009-09-04T23:28:00.001-04:00

My name is Cornelius X. Carroll. That's me, on the left, laying on a sheet of glass cantilevered off the side of the Sear's Tower. I'm a senior at Rollins College and am an economics major. I'm originally from Chicago and hope to return there to attend graduate school at The University of Chicago. For as long as I can remember, I've been exposed to economic ideas through contact with my family