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What Is Economics?

A good understanding of economics begins with understanding what economics is...and what it isn't.

Economics Spotlight10

Some More Evidence on the Effects of Minimum-Wage Increases...

Monday April 14, 2014
In econ 101, we are taught that a minimum wage is a price floor on labor, and, as such, a binding minimum wage will increase unemployment and decrease employment. It's important to note, however, that in econ 101 we assume that both the labor market and the market for whatever the firms are selling are perfectly competitive, when in reality this need not be the case. When those assumptions are taken away, the theoretical conclusions regarding a minimum wage increase are much less clear, so empirical evidence becomes very important. The latest on this front is from San Jose, CA, and it shows that the effect of a minimum wage increase is certainly not always obvious.

An Economist's Take on the Gender Pay Gap

Monday April 14, 2014
The differential in compensation for men and for women in the U.S. is getting a lot of attention right now, largely due to the fact that President Obama has made gender pay equality a priority and issued two executive orders aimed at bringing gender wage parity to government employees. (A similar bill failed to reach the Senate floor for discussion, however.) In order to assess what actions should be taken, it's important to understand what the wage gap looks like in the first place. Luckily, economist Claudia Goldin has as much data and analysis on the topic as you could possibly want.

The Latest on High-Frequency Trading...

Monday April 14, 2014
In case you haven't heard, Michael Lewis has a new book out entitled Flash Boys: A Wall Street Revolt that gives a fascinating narrative inside the world of high-frequency trading. As expected, the book has reignited discussions about the social value (or cost) of high-frequency trading. This article gives a nice overview of what a variety of experts have to say on the matter.

Some Labor Market Trends to Watch Out For...

Monday April 14, 2014

If you read this site regularly, you likely know that jobs numbers are posted by the Bureau of Labor Statistics each month. While those numbers are a useful snapshot, it's also important to look at longer term trends in order to understand the overall employment picture. Economist Jared Bernstein says that there are three trends worth noting:

  • Reversing the shrinking labor force
  • Increasing job growth
  • Raising wages

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