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7 months

Economics of Daylight Savings Time

Where I live in Minnesota, the short days of December have less than 9 hours of daylight, with sunrise around 7:50 am and sunset around 4:40 pm. In contrast, the long days of June have about 15 1/2 hours of daylight, with sunrise around 5:30 am and sunset around 9:00 pm. But of course, those summer times for sunrise and sunset use Daylight Savings Time. If we didn't spring the clocks forward in March, the summertime in Minnesota would feature a 4:30 am sunrise and an 8:00 sundown.

7 months

Some Economic Consequences of the Near-Extinction of the Buffalo

The American buffalo population declined gradually through much of the 19th century; for example, they were almost entirely gone from the area east of the Mississippi River by the 1830s. But the near-extinction of the buffalo happened in a rush of about a decade, with a decline from 10-15 million in the early 1870s to only a few hundred by the late 1880s. Economic research from a few years ago suggests that the driving force was an 1872 innovation in tanning technology which happened in Europe, and an associated strong demand in Europe for buffalo hides. The 19th century buffalo herds were endangered by many factors, but it was pressure from globalization that drove them to near-extinction.

7 months

Warning Signs of US Corporate Debt

Comparing the recession of 2001 and the recession of 2007-2009 reminded economists of an old lesson: A crash of asset prices in the stock market or housing can be a nasty hit for an economy, but when problems arise where many debts aren't going to be repaid in full or on time, the shock to the financial system and the economy can be much worse. For example, one study of the Great Recession found that about one-quarter or one-third of the decline in output was because of the fall in housing prices, while about two-thirds or three-quarters of the decline was related to how problems related to excessive debt worked their way through the financial system.

7 months

Back To Fundamentals

If we look at the list of key macroeconomic data published in recent weeks, we can not use a better definition than “disappointing”.

7 months

What Newfangled Rent Control Looks Like

Oregon has just become the first to enact a statewide rent control law. Governor Kate Brown said: "This legislation will provide some immediate relief to Oregonians struggling to keep up with rising rents and a tight rental market." That statement is of course literally incorrect, because the Oregonians struggling with rising rents are in exactly the same position now as they were before the passage of the law. The new bill limits future increases in rents for existing renters to 7%, plus inflation, so it is clearly not a rigid limit. It will be interesting to see of that limit on future increases gets ratcheted back in the future.

7 months

Opioid Crisis

The opioid crisis seems to me one of those issues everyone knows exists, but also an issue that our political system and society really hasn't come to grips with. Molly Schnell provides a useful short overview in "The Opioid Crisis: Tragedy, Treatments and Trade-offs," written as a Policy Brief for the Stanford Institute of Economic Policy Reseach (February 2019). She writes: 

7 months

Some Snapshots and Thoughts about US Entrepreneurship

A dynamic and healthy economy will always be undergoing a process of churn: new companies and new jobs starting, but also existing companies and jobs ending. Thus, it's been troubling to see articles about "The Decline in US Entrepreneurship" (August 4, 2014), a lower rate of business startups, and a decline in how much new firms are offering in terms of job gains.