Who Will Drive The 21st Century Economy?

Throughout world history, the global economy has been led for large segments of time by a dominant country or region. The diagram illustrates the periods of leadership dating back to the beginning of A.D. The article points out the likelihood of a leadership transfer as we emerge from the global financial crisis and forge a new century.

A New Social Networking Site At The St. Louis Fed

A great friend of high school economics education, the St. Louis Federal Reserve Bank, now has a social networking site that is definitely worth checking out. The St. Louis Fed's web site serves up loads of top quality Econ Ed content and comes highly recommended as a great resource for classroom teachers and researchers.

Here's the announcement with the URL:


Economic Education at the Federal Reserve Bank of St. Louis has a social networking site for economic educators. The URL for the site is http://econednet.stlouisfed.org.

The web site is a dual-threaded design, meaning each user can select both the topics of interest and the sites users with whom they wish to communicate. Unlike unfiltered Internet blogs, users will not have to sort through commentary of little interest to locate useful information.

We hope the site will help you find others with similar interests; exchange knowledge about economics and personal finance content, materials and research; solve problems and develop new ideas.

EconEd Net allows each user to write his or her own blog. Each user’s blog is available to all other users who sign up to receive that user's commentary. Users are able to read blogs from selected users while excluding ones they do not care to read.

The Ultimatum Game

Click on the link and you'll access a full lesson using the Ultimatum Game. This is a great activity when you begin teaching Economics on why people make the choices they do and how each person has a unique perspective on the line between greed and self-interest.

RSA Animate – Crisis of Capitalism

RSA Animate – Crisis of Capitalism
Clicking on the link takes you to an animation video and lecture by a radical socialist economist. He conveys his unique take on the recent financial crisis and how it is endemic of a germane flaw of Capitalism. The video and lecture are very thought provoking and should stir a great deal of discussion in your classroom.

RSA Animate – Superfreakonomics

RSA Animate – Superfreakonomics
Clicking on this link will take you to a short video animation on the classic Ultimatum Game. This is an entertaining look at the motives that drive people to make the choices they do. The video and actually playing the game with your students will clarify in their minds the difference between greed and self-interest, and whether there actually is altruism in the world.

Leno And Incentives

1. Comedian Jay Leno takes his show to Michigan to help "not just the autoworkers -- anybody out of work in Detroit."

2. He gives away tickets for free.

3. Someone tries to sell his ticket on ebay.

4. Mr Leno objects.

So I wonder: If a person down on his luck prefers the cash to the opportunity to watch Leno live, why would Leno object? Is it altruism that is really motivating Leno here? Is he really sure that the unemployed person in Detroit would be better off with an evening of laughs than $800 in his pocket? Or does Leno want to play to a live audience of unemployed workers so he will seem altruistic to his television audience?

Absent externalities, markets improve the allocation of resources. Both the buyer and the seller of the ticket must be better off: otherwise they would not engage in the transaction. The only significant negative externality that I can see here falls on Mr Leno himself. In other words, Leno's objection to the ebay sale is an understandable and fundamentally self-interested act in that the sale impedes his abilty to appear selfless.

Did he play Detroit to lift the spirits of the unemployed or to elevate his own image?

Budget And Fiscal Policy

This is an assignment in which your students access online resources to answer questions and further their understanding of debt, deficit, budget, and fiscal policy.

Parking In L.A.

This is an article about the traffic problems in Los Angeles that the author believes are the result of a pricing issue. It's a good study in incentives and how a realignment could fix an inefficient market. There are follow-up questions at the end of the article for your students to answer.

Advertising and Brands Effect on Price

Here is an in-store project that can be done with your regular Econ students. It's a non-scientific way of looking at non-price advantages that brand name products have over off-brand ones in a grocery store setting.

Love For Our Pets Is Recession Proof

This article describes the unconditional "love" we shower upon our pets regardless of the state of the economy. The pet care and pampering business isn't deterred by a little global financial meltdown.

Top Tax Rate By President

Federal Debt To GDP

New Financial Regulations Sweeping But Not Game Changing

The new financial regulations expected to be signed into law will create a revenue rollback for the major banking firms like JP Morgan Chase. But no one is mistaking this legislation for the dramatic changes spawned by the Great Depression. This article addresses the policy modifications and the new expectations Congress has for the industry. JP Morgan Chase will be one of the most affected firms because they have significant interests in all areas of banking.

The Origins Of The American Stock Market

The NYSE is a technical wonder now days moving billions of dollars daily between capital interests. This essay points out the humble beginnings of the stock exchange in America and how it evolved.

A Glimmer Of Hope In The I.P.O. Market

If you incorporate the stock market challenge into your curriculum, this article might interest you. It discusses the difficulties companies have faced in recent years taking their firms public. From the Internet bubble to frozen equity markets, it's been a tough decade for fledgling businesses seeking capital.

Disparity Of Wages Worldwide

Click the image to enlarge

Source: FixR

IOUSA

This is a video from the Peterson Foundation, currently led by former Comptroller David Walker. It puts the messy fiscal scene in perspective.

Roosevelt Recession Reprise?

In 1937, thinking the economy was back on its feet, the Roosevelt administration began a return to austerity after the "extravagant" spending of the New Deal. The result was a double dip with unemployment levels returning to 17% and the GDP contracting. The mood in Washington now is to reign in deficits and roll back the stimulus. The author of this article believes it to be premature and that it will stir the ghosts of 1937.

Will The Gulf Oil Disaster Be A Boon For The Ethanol Lobby?

The author of this article expresses his dismay at the benefits that may be reaped by the ethanol industry. He believes our love affair with corn-based fuels to be misguided.

Can A Soda Tax Begin To Fight The Epidemic Of Obesity?

This article addresses the balance between personal freedom and taxes as a disincentive. Do we want government legislating our diets? It has worked for cigarettes.

Plummeting Marijuana Prices In Northern California

States Ease Restrictions On Vice To Fill Budget Gaps

The Financial Turmoil Of The Average Family

Clicking on the title takes you to a large graphic with great detail about the average American family's finances. It's frightening!!!

Sometimes It's Rational To Be Irrational

Does it make sense to spend hundreds of dollars on a lawsuit to recover a $25 mistaken charge? It all depends on how you define utility. Sometimes satisfaction comes in ways beyond mere dollars and cents. This article expresses one man's frustration with the airlines and his crusade for justice.

Where Will Your Tax Dollars Go?

For context, here's the spending breakdown for some of the big-ticket items in 2009, based on the numbers in this CBO report:

Defense, 18%
Social Security, 18%
Medicare, 12%
Medicaid, 7%
Interest, 5%

Price Gouging?

As hurricane season arrives, we harken back on some of the harsher experiences and hope they never revisit. Inevitably we'll be scrambling for supplies in the wake of a big one and the less prepared among us may face a dose of sticker shock when looking for plywood or ice. Are the seemingly exorbinant prices gouging or simply a manifestation of market forces? Do we really want legislation against "gouging"? This article discusses the ramifications.

Just The Tip Of The Iceberg

This link will take you to an explanation of the SEC's case against Goldman Sachs.

China's Real Estate Bubble

There's a lot of pressure being placed on China to allow its currency to appreciate. This is reminiscent of the pressure placed on Japan in the mid-1980s that served as the lead move toward its eventual lost decade. The link takes you to an article from a Japanese economist offering China some advice.

"A Pernicious Disconnect"

Will The E-book Save Reading?

With publishing revenues in decline and the general practice of reading fading, the industry is pinning it's hopes on the new electronic book movement to salvage literacy and sales. The article breaks down the costs to uncover the potential profit of this breakthrough.

Where Do State Revenues Come From?

This article and accompanying chart express the wide variety of ways states generate their income. This provides a window to the regions of the country that may recover more quickly and those that will lag when the economy rebounds.

McDonald's Egg McMuffins Are "Normal" Goods

This article may help in clarifying normal and inferior goods as more people skip their fast food rituals and eat toast as they drive to work.

The Giant Stone Currency On Yap Island

When teaching about the concept of money, it's often helpful to reference the giant limestone currency when trying to convey the notion of money. Since it can be anything that's perceived valuable, the sight of these giant disks stretch the student's imagination.