Should You Have Gone to College in Europe?

In the recent debate in the United States regarding the government’s role in higher education, some politicians are calling for a system with free tuition for all students, similar to that of most Western European countries. Therefore, we want to explore the opportunity cost of the American and European systems, by analyzing which offers the best return on investment to its youth, assuming the student will work in the same region where he studied. Due to the numerous variables at play, we will consider the circumstances of both an average student of average income and of a highly academically-apt, low-income student. One of the most-discussed countries in this debate is Germany, where tuition stands at zero dollars for higher education. According to The College Board, the average U.S. in-state tuition for a public four-year college is $9,650, yet the average total grant aid (including federal, state and institutional) is $5,010, received by half of all undergraduate KEEP READING >>

Italian commerce: Partnering the Old and the New

By Francesco Grechi Data released on August 31st signaled a pleasant note for the Italian economy: a 0.2% drop in the unemployment rate from July 2015 (11.6% to 11.4%). These numbers come as confirmation of a year-long downwards trend, considered by analysts to be a good omen for the nation’s stagnant labor market. Yet not to sound too pessimistic, any notion of relief should be considered very relatively. The Southern European country still has the fifth highest unemployment rate in the EU-28, and has attracted the attention of many commentators over recent financial instability. And this comes without mentioning perhaps the most pressing issue the country is facing: its colossal youth unemployment rate. According to the same data mentioned earlier, the youth unemployment rate currently resides at a whopping 39.2%. To make this more palpable, approximately 1.8 million young Italians are actively searching for,but cannot find, jobs. So, in a time where many interpret the downwards KEEP READING >>

Puerto Rico and its Colonial “Promise”

By Gabriel Kilpatrick Much attention in the media has been given to the recent developments in Puerto Rico; indeed the news has been rife with coverage of blackouts and a rapidly spreading Zika outbreak. However, the development receiving the most attention is the island’s deteriorating economic situation. With the Commonwealth facing an increasingly dire inability to strike a deal with creditors over its exploding debt, as well as a decade long period of disturbingly-low economic growth, President Obama and Congress took action. The result was H.R. 5278, Puerto Rico Oversight, Management, and Economic Stability Act, or “PROMESA”. The legislation creates a seven member Oversight Board with broad authority over the island’s finances and a mandate to manage Puerto Rico’s $70 billion-plus of taxpayer-funded public debt and avert economic catastrophe. This move is not unprecedented; similar measures were undertaken in the wake of Detroit’s bankruptcy filing in 2013. However, important KEEP READING >>

The Carbon Conundrum

Last week, Canada announced that it had taken its first steps towards joining a small and exclusive group of nations with a national carbon tax. Prime Minister Justin Trudeau called upon the country’s provinces to individually adopt either a carbon tax or a cap-and-trade framework by 2022, or have Ottawa impose a tax by that date. But why should government interfere with the free market in order to reduce carbon consumption? Does the market not always result in an efficient amount of carbon being bought and sold? Indeed, economics has often been the seat of contention, not in the least because of its impact on politics (and often, the impact of ideology on fiscal research). Between reforming the tax code, tackling our healthcare epidemic or determining how to best trade with foreign nations, today’s pre-eminent thinkers have much to debate over. However, a surprisingly large consensus exists on the need for government intervention in curbing carbon consumption. Simply put, carbon KEEP READING >>

Argentina Needs to Fix Its Debt Problem

Argentine President Mauricio Macri has a tough year ahead of him, marked by a weak economic outlook and a strong political opposition. Economically, his liberal economic plan seeks improve macroeconomic indicators by addressing external and fiscal imbalances and reducing inflation. In his first month in office, President Macri eliminated or reduced taxes on commodity exports and abolished exchange controls. The most popular measure he has enacted thus far has been the lifting of the controversial “cepo cambiario,” or ban on dollar purchases. This move gave him the political capital to later cut electricity subsidies in order to reduce Argentina’s high fiscal deficit, raising the price of electricity. Cutting the subsidies also increased the amount of money that goes to the province of Buenos Aires through the system of revenue sharing, to the great displeasure of other provinces. The first months of 2016 in Argentina were marked by a sharp peso devaluation that boosted an already high KEEP READING >>

Japan’s Mad Science

On January 28th, 2016, the Bank of Japan, Japan’s central monetary arm and the equivalent of the U.S. Federal Reserve, voted 5-4 in favor of adopting negative interest rates. As Lucinda Shen of Fortune explains, “Negative interest rates mean customers effectively pay a fee for parking cash in banks.” In other words, instead of accruing interest by putting one’s cash into a bank vault like normal, one would lose money in a savings account. With initial rates lowered to -0.1% for certain deposits, the idea behind negative interest rates is theoretically simple. By encouraging consumers and banks to spend and borrow, and disincentivizing savings, Japan has sought to increase inflation and bolster spending in what has been an otherwise quietly stagnating market. And yet, ever since Japan’s decision to experiment with negative interest rates, the results have been less than assuring. Just two weeks ago, Japan’s Nikkei 225 stock average plummeted 11.1%, “the worst weekly performance for KEEP READING >>

A Bad Year For Cartels

If you have happened to pass by a gas station recently, it is probably evident that OPEC is not having a good year— United States gas prices now hover around $1.86 on average, down from $2.05 a year ago. Though the shale revolution in the United States has significantly boosted the global supply of oil, OPEC has refrained from cutting production.  While officials in many smaller countries such as Algeria have strongly criticized this policy, Saudi Arabia has remained committed to keeping prices low in order to maintain its market share. Shale has provided the oil industry with a more elastic supply; an increase in prices could result in a relatively rapid reversal of the current slowdown of American shale.  Though OPEC bears the brunt of the advancements in the energy industry, it is not alone in its troubles— broader technological progress and political change have pressured a range of other cartels around the world this year. Although a maple syrup cartel sounds like the subject KEEP READING >>

Marijuana In Mexico

On November 4th, the Mexican Supreme Court ruled in favor of four anti-crime activists from a cannabis club called Mexican Society for Responsible and Tolerant Personal Use, or SMART. It declared unconstitutional the country’s ban on the production, possession, and recreational consumption of marijuana. Though the court’s decision currently only applies to the plaintiff, it has lain the groundwork for future legal actions that could ultimately lead to the legalization of recreational and medicinal marijuana nationwide. It represents a direct challenge to the nation’s strict substance abuse laws and has significant implications for the debate on the efficacy of current policy on narcotics in the region. Shifting drug policy in Mexico as a result of this controversial ruling will impact a drug war that has ravaged multiple regions of the country since the early 2000s and has claimed over 83,000 lives.  In order to understand the effects of legalization, a closer look at the business of KEEP READING >>

Bicycling In Beijing

Beijing’s streets are littered with the past. Hidden within the shadows, between intermittent streetlights, or laid bare on the pyres of public refuse, they shrink from the high-beam gaze of the lumbering automobiles struggling through narrow lanes. They are the remnants of a previous age: the Kingdom of the Bicycle. For a long time, bicycles have been the main method of transportation in China’s capital city. With ring roads built around the Forbidden City, bicycles were an easy way to navigate. The introduction of cars made the use of bicycles obsolete. People discovered that with a car, they could get to their destinations quicker than ever before. But thanks to the efforts of a growing community of cycling enthusiasts, new flocks of bikes are taking to the streets and public perceptions are shifting. People are beginning to ride bicycles more frequently, but have yet to revert back to the pre-automobile era of riding bicycles wherever an individual needs to go. So how do bicycles KEEP READING >>

Greece’s Greatest Gamble

Photo by Sang B. Ra for the Columbia Economics Review

What began as a growing concern coming off of the financial crisis of 2007 - 2008 has snowballed into a train wreck with global implications. The elephant in the room? Greece’s financial solvency. Though Greece had enjoyed spectacular growth for the two and a half decades following its decision to join the European Communities, a combination of poorly timed infrastructure projects and underreporting of government deficits has culminated in its inability to pay back its creditors. During the fallout of the Great Recession, Greece’s financial situation continued to deteriorate. From the fall of 2009 to the summer of 2011, Greece’s credit rating tumbled from A to C by all major credit rating agencies. The Athens Stock Exchange hit its lowest point since the 1990s. With Greek/German 10-year debt spreads tripling in less than a year, NSA intelligence reports released by WikiLeaks presented evidence of secret talks to plan the exit of Greece from the Eurozone in 2012. Though the KEEP READING >>