Perspectives of Policy

      There is an astounding lack of consensus on the relationship between economic disparity and growth. Unsurprisingly, there are many factors that contribute to this polarization on the subject:     First off, many theoretical arguments are often based on wealth distribution; however, empirical studies generally only cover statistics of income inequality, not that of wealth. Simply put, not enough countries produce numbers on wealth distribution for it to be a viable source of evidence. This is an issue because there is a general consensus that wealth inequality is much more significant than income inequality, at least in the realm of economic growth. Without concrete empirical data, these theoretical arguments will remain theoretical. And concrete data will not come forth without more studies on wealth distribution across the globe. Studies on the difference between wealth inequality and income inequality have even found that wealth inequality...

      The biggest flaw in our capitalist economy is the fact that there is already a basis of inequality in our country. Theoretically, capitalism provides an equal opportunity for those who are willing to work for it. However, the playing field in American society is so far from level. The crookedness brought on by generations of systemic racism and discrimination has caused minorities to be put at a natural disadvantage. Race is not the only factor in wealth inequality, yet is the most potent, and in the most dire need of help. Ideas like affirmative action, in the sense of college admissions, have attempted to provide some equity to minorities. However, to get to the root of the problem, economic policies are the only way to diminish the economic gap.      Wealth inequality is not necessarily a racial issue. While it often targets minorities who are handed less opportunities, to fix the economic disparity, it must be looked at from a broader sc...

      Within the last month,  Bahamas-based cryptocurrency exchange, FTX filed for bankruptcy along with the resignation of chief executive Sam Bankman-Fried . The quick demise of the company has shocked the crypto world and left many wondering about the legitimacy of other cryptocurrency exchange platforms.      A significant cause of this quick downfall was a competitor's, Binance , withdrawal from a deal to purchase FTX.  Previously, Binance CEO Changpeng Zhao had announced that the cryptocurrency firm had reached a non-binding deal to buy FTX’s non-U.S. businesses for an undisclosed amount, allegedly rescuing the company from a liquidity crisis that Zhao foresaw. However, merely a day later Zhao pulled out from the deal and essentially announced that FTX was a lost cause. Following the suspect dismantling of this deal between FTX and Binance and the inevitable downfall of FTX, the US Department of Justice launched a full on probe against the ...

     Prices rose even more in September than the previous month. This is a good example of the increasing inflation in America and the effect it has on the U.S. economy. Central banks started raising interest rates and prices of goods rose. Policymakers need to do something about this, as the multiple interest rate hikes will eventually lead to an economic recession. Living rates and expenses are significantly high right now and inflation is the biggest issue for the American economy at the moment. The Inflation Reduction Act is a plan proposed by democrats to decrease health care and living costs. GOP lawmakers believe that the democrats caused inflation with the payments of stimulus checks and government handouts. The way that the Fed counteracts inflation is by hiking interest rates. However, this attempted solution to inflation could end up backfiring and causing an economic crisis.       Gross domestic product fell by 0.2 percent in the second qua...

      The onset of a worldwide pandemic sparked the increase of online business and e-commerce. As we witnessed businesses be shut down when the nation was put on lockdown, a new economic opportunity arose. With this wave of online business came the new concept of microbusinesses.  Online microbusinesses are defined as businesses with a discrete domain name and an active website. About 90% of these online businesses employ fewer than 10 employees. Founding a microbusiness is easy and simply takes a passion of some form. The pandemic started a new trend of these so called microbusinesses. In fact, Americans created 2.8 million more online microbusinesses in 2020 than in 2019, which was following the hit of the pandemic. This increase in online businesses aligns with the recent overall increase in entrepreneurial activity. Founders of microbusinesses generally have a separate profession, are following interests, and do not associate with a larger industry. This en...

      One of the most major shifts in the economy over the last decade was the steady decrease in interest rates. At the start of the last decade The  Congressional Budget Office projected that the yield on 10-year Treasury bonds would gravitate around an average of 5%. Yet, it is currently sitting at a little more than 3%. There was a point in 2019 where it even dropped below 2%. This figure is the best testament to the trending decline of interest rates in America. This steady decline in the natural interest rate allows for the U.S. government to take on a greater federal debt, and reduces borrowing costs. On the other hand, it puts the Federal Reserve in a tough spot, especially if we find ourselves amidst another eminent recession. While these low interest rates can evidently boost the economy, there can also be many adverse affects. Inflation is a precise example and a major issue that the U.S. is enduring. Inflation tends to have an inverse relationship with th...