What Can Economics Tell Us About Deadly Earthquakes?

This past weekend Nepal experienced a massive earthquake centered about 50 miles from Nepal’s capital Katmandu. The Nepal earthquake was rated as 7.8 on the Richter scale, which was created in 1935 by Charles Richter at the California Institute of Technology. Each whole number increase means a 10 times increase in the seismograph that is measuring the ground’s movement. Each time the rating goes up by a whole number, such as from 6.0 to 7.0 thirty-one times more energy is released. The 7.8 magnitude earthquake destroyed many historic temples in Kathmandu and killed thousands of people. Continue reading

Is a $15 per Hour Minimum Wage An Insane Increase?

Recently, The New York Times ran a front page story highlighting demonstrations that are being held for an increase in the minimum wage to $15 per hour. Currently, the Federal minimum wage is $7.25 per hour, which means more than doubling the pay of low-wage workers. Is there any precedent for a $7.75 absolute increase, which is a 107% relative increase? Continue reading

Why most of us procrastinate in filing our taxes – and why it doesn’t makes any sense

April 15th is tax day, a day many people dread. Economists believe most people are rational calculating machines, but many of us don’t behave rationally about filing our taxes. Instead, most of us wait until the very last minute. Figures from the end of March suggest roughly 50 million or 1/3 of all this year’s individual tax returns in the US will be filed between the end of March and the middle of April. This is NOT a good idea for most of us. Continue reading

Does The Federal Reserve Know More Than Other Government Economists?

The U.S. Federal Reserve has a complicated mandate. The legislation governing this agency states the Fed is supposed to “promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.” It does this by controlling or influencing interest rates and controlling the U.S.’s money supply. The Fed has pushed down interest rates close to zero for many years to increase the number of employed people and reduce unemployment. By pushing interest rates down, it has explicitly ignored two of its three mandates. The key question for the Fed is when should it stop focusing on employment and refocus its attention on stable prices and moderate long-term interest rates? Continue reading