Newsday's article "China calls for boost in domestic consumption" explains how China is trying to improve its local economy through a decrease in exporting. China wants to increase domestic consumption to prevent being involved with a weaker global economy while keeping jobs at the same time. China hopes that shifting to technological purchasing will allow this plan to succeed. The hope is to create new jobs in the field and increase employment while increasing domestic consumption at the same time. Assistance to rural families will also be provided to help with China's domestic agriculture industry.
The article points out that most of China's previous economic improvements are due to exporting into other countries. China is able to sell their products abroad to create global revenue. Because the global economy has worsened, China isn't as enthused about exporting. This is a good example of where specialization and trade is beneficial, but not necessarily on such a large scale. China may have overextended themselves and hurt it's economy in the long run. China doesn't want to cut off all exporting but rather simply decrease it by improving domestic consumption. China will still produce as much, but it won't be exporting as much. This decrease in supply might also cause prices to rise giving China more revenue.
Tuesday, May 1, 2012
Egypt and US Relations
The Newsday article "McCain says US, Egypt 'must be friends" points out that Egypt and the US have had poor relations recently. The two countries have been at an all time low in their ability to coexist. Some of the US government wants to cut off these relations but John McCain argues otherwise. He points out that the relationships must adapt instead of be cut off. The key to their relationship is trade, a necessary aspect of both economies.
These two countries are a key example of the need for specialize and trade in order to maximize economic opportunity. Without the two trading, both countries would have issues selling and receiving certain products. Through US trade with Egypt, economic prosperity is brought to a higher level. Most trade is done with agricultural resources and military products. Looking elsewhere for these products would probably hurt both economies through new transaction costs, and new relationships would probably be at less favorable prices. This would hurt both economies, but not as much as if they exhausted domestic resources to produce these goods locally. Therefore, the US and Egypt having good relations is very beneficial to both economies.
These two countries are a key example of the need for specialize and trade in order to maximize economic opportunity. Without the two trading, both countries would have issues selling and receiving certain products. Through US trade with Egypt, economic prosperity is brought to a higher level. Most trade is done with agricultural resources and military products. Looking elsewhere for these products would probably hurt both economies through new transaction costs, and new relationships would probably be at less favorable prices. This would hurt both economies, but not as much as if they exhausted domestic resources to produce these goods locally. Therefore, the US and Egypt having good relations is very beneficial to both economies.
Goliath Grouper and the Tragedy of Commons
The goliath grouper is a massive fish native to Texas. This fish was known for being able to reach over 8 feet in length with about 100 pounds per foot. Unfortunately today these fish are barely ever scene. A tragedy of commons incident caused the fish to be over-harvested. This fish was known for being harvested for massive amounts of meat for the market. This fish meat was very profitable to be sold. Too many fishers caught and sold the fish making it near impossible for anybody to even see a grouper this size anymore. The fish wouldn't reach 8 feet because of them being caught before full maturity. The government had to step in to solve this tragedy of commons and prevent the species from becoming extinct. Therefore, the government forbid the catching and harvesting of the goliath grouper in the 1990s. The fish is now considered an endangered species to keep people away.
The government hopes to repair this part of the ecosystem with this new regulation. Legends today exist of people claiming to experience the goliath groupers. One swimmer claimed to be diving when it was swallowed whole by something unknown and spit back out. The swimmer claims to not know what swallowed and spit him out. Some claim it was a full grown goliath grouper. Some claim he lied. Whatever the case, the government is still fighting for the survival of the fish that fell victim to the tragedy of commons.
The government hopes to repair this part of the ecosystem with this new regulation. Legends today exist of people claiming to experience the goliath groupers. One swimmer claimed to be diving when it was swallowed whole by something unknown and spit back out. The swimmer claims to not know what swallowed and spit him out. Some claim it was a full grown goliath grouper. Some claim he lied. Whatever the case, the government is still fighting for the survival of the fish that fell victim to the tragedy of commons.
Saturday, March 31, 2012
Game Theory Branching Out
Newday's article "Research and Markets: Game Theory and Learning for Wireless Networks. Fundamentals and Applications" talks about how game theory can be used in many fields of study. Game theory was originally used in economic settings, but recently it has branched out onto many other fields such as medicine, history, and technology. The article states, "theory can be used to solve prevalent problems in wireless networks such as power control, resource allocation or medium access control." This explains how companies can use game theory to fix problems that hinder them from ideally selling their service to customers. The article also talks about how game theory can be used in reference to helping deal with WiFi problems.
This article is an example of how game theory can be used in more than just economics. Game theory is a topic that can be used to solve problems in many industries to allow them to better serve their customers. Game theory can help properly facilitate distributing certain goods such as WiFi and cell services to the general public in a more efficient manner
This article is an example of how game theory can be used in more than just economics. Game theory is a topic that can be used to solve problems in many industries to allow them to better serve their customers. Game theory can help properly facilitate distributing certain goods such as WiFi and cell services to the general public in a more efficient manner
Sunday, March 18, 2012
Chinese Pollution as a Negative Externality
Newsday posted an article entitled "Beijing Releases Pollution Data; US Figures Higher" talking about the pollution problems in China that have been occurring for quite some time. China had released stats about the air pollution produced by their country after numerous requests were made. The problem is that the US figures taken over previous years are much higher. The argument is made that most of the pollution wasn't present when China took the measurements because the skies were clear. Where the pollution measurements were made is also an issue. Normally China's skies are filled with smog from the pollution, especially in the bigger cities. Whether or not the sky was clear when the measurements were taken is irrelevant because the Chinese should've taken numerous measurements to get a more accurate reading.
Chinese pollution has been a big topic of controversy lately. There biggest issue is that they still use coal in much of their manufacturing processes. The need for China to check their pollution is greater now that more health issues associated with air pollution are coming to light. Some of the pollutants in the air can be very damaging to people's lungs. Another issue is the more obvious environmental effects. Chinese air pollution creates acid rain in distant countries because the pollutants are carried away from China before they create acid rain that destroys much natural wildlife.
The economic viewpoint shows that Chinese manufacturing creates a massive negative externality, pollution. This pollution could lead to poor health an acid rain. Ways to account for this externality could be applications of Pigouvian taxes, regulations, or the Coase theorem. The problem with regulation is that international law is tough to enforce. Chinese manufacturing plants answer to the Chinese government which may see the coal use as a cheap way to produce that doesn't directly effect them. This makes regulation tough because without China regulating itself, there is little that other countries can do to regulate them without going to war. Regulation could work if the US applies it to its own producers. Much of US manufacturing is currently happening in China, so the US could make it a law to not allow US producer-or any producers for that matter-to sell their goods in the US unless they are made in a more eco-friendly manner. A Pigouvian tax is also tough to implement because it is usually set up by the domestic government. Countries that import Chinese goods may be able to add a Pigouvian tax on imports if they want to cover the damages made by the negative externalities. The Coase theorem seems to be the most easy to applicate in theory, but transaction costs may be too high, and property rights may not be well defined if foreign companies are using Chinese soil to produce. Therefore, Chinese pollution is a devastating negative externality that is tough to take care of for many reasons.
Chinese pollution has been a big topic of controversy lately. There biggest issue is that they still use coal in much of their manufacturing processes. The need for China to check their pollution is greater now that more health issues associated with air pollution are coming to light. Some of the pollutants in the air can be very damaging to people's lungs. Another issue is the more obvious environmental effects. Chinese air pollution creates acid rain in distant countries because the pollutants are carried away from China before they create acid rain that destroys much natural wildlife.
The economic viewpoint shows that Chinese manufacturing creates a massive negative externality, pollution. This pollution could lead to poor health an acid rain. Ways to account for this externality could be applications of Pigouvian taxes, regulations, or the Coase theorem. The problem with regulation is that international law is tough to enforce. Chinese manufacturing plants answer to the Chinese government which may see the coal use as a cheap way to produce that doesn't directly effect them. This makes regulation tough because without China regulating itself, there is little that other countries can do to regulate them without going to war. Regulation could work if the US applies it to its own producers. Much of US manufacturing is currently happening in China, so the US could make it a law to not allow US producer-or any producers for that matter-to sell their goods in the US unless they are made in a more eco-friendly manner. A Pigouvian tax is also tough to implement because it is usually set up by the domestic government. Countries that import Chinese goods may be able to add a Pigouvian tax on imports if they want to cover the damages made by the negative externalities. The Coase theorem seems to be the most easy to applicate in theory, but transaction costs may be too high, and property rights may not be well defined if foreign companies are using Chinese soil to produce. Therefore, Chinese pollution is a devastating negative externality that is tough to take care of for many reasons.
Wednesday, February 29, 2012
Minimum Wage in Greece
Newsday's article, "Greek Parliament Backs New Pension Reforms" illustrates some topics present in microeconomics. Greece has been struggling economically being in debt for roughly five years of late. Greece has been attempting to reform their economy to fix this issue. Many of their newest reform ideas are listed in this recent article. One of these reforms is to lower minimum wage.
From an economic standpoint this decrease in minimum wage will help the labor market. Minimum wage is designed to improve the well-being of the employed population, but it increases the amount of unemployment because it acts as a price floor that creates deadweight loss. An increase in minimum wage creates a decrease in demand for labor thereby decreasing the supply of employed workers in the labor market. This decrease in minimum wage will decrease the well-being of the employed population, but it will also create more jobs. With Greece's massive unemployment rate, this new reform will most likely be beneficial to the population because it will most likely help more people in need of jobs than it will hurt those who already have existing jobs.
From an economic standpoint this decrease in minimum wage will help the labor market. Minimum wage is designed to improve the well-being of the employed population, but it increases the amount of unemployment because it acts as a price floor that creates deadweight loss. An increase in minimum wage creates a decrease in demand for labor thereby decreasing the supply of employed workers in the labor market. This decrease in minimum wage will decrease the well-being of the employed population, but it will also create more jobs. With Greece's massive unemployment rate, this new reform will most likely be beneficial to the population because it will most likely help more people in need of jobs than it will hurt those who already have existing jobs.
Monday, February 20, 2012
Tariffs Fixed to Increase Trade
In Newsday's article, "European-Moroccan pact loosens fish, food trade" the subject of tariffs is discussed. The European Parliament approved a new deal to boost Mediterranean trade by reducing customs costs. A ten year plan was put into motion that hopes to increase Moroccan trade and EU exports substantially. People in favor of this pact find it a good way to keep relations strong between the EU and Morocco as well as help international trade. People against this pact say it will hurt local industries. Many local food industries from these parties do not export because they are small family run businesses. This pact will hurt these groups because only the big food conglomerates are profiting from the deal. Morocco claims to have accepted this agreement with open arms, but the article seems to suggest that they were pressured because if this pact wasn't agreed upon, the entire relationship between these two entities would be reevaluated. 40% of the farms in Morocco are small family farms while the wealthy families with larger farms are benefitting from this agreement. Only time will tell whether or not this agreement is beneficial to both parties involved.
This article is a good example of how tariffs can effect trade. The pact is designed to increase exports and lower costs to do so. This shows how international trade increases producer surplus and how decreased tariffs decrease deadweight loss. This article also shows that there has to be a loser in these situations. No economic scenario is a win-win. The loser in this case would be the local producers that don't export and may go out of business because of it. All in all, this trade deal is a great example of how international trade applies to microeconomics.
This article is a good example of how tariffs can effect trade. The pact is designed to increase exports and lower costs to do so. This shows how international trade increases producer surplus and how decreased tariffs decrease deadweight loss. This article also shows that there has to be a loser in these situations. No economic scenario is a win-win. The loser in this case would be the local producers that don't export and may go out of business because of it. All in all, this trade deal is a great example of how international trade applies to microeconomics.
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