Friday, December 9

Economy and Government

Central Banks Raising Interest Rates
All Posts, Economy and Government

Central Banks Raising Interest Rates

By Marvi Ali (Image: creative common license) Over the past few months, the Federal Reserve has steadily been raising the federal funds interest rate in an effort to combat inflation. The Federal Reserve, also known as the Fed, is the central bank and monetary authority of the United States. The Fed is tasked with the major responsibilities of conducting national monetary policy, supervising and regulating the banking system, and ensuring financial stability. Recently, the Fed announced a 0.75% increase to their interest rate on November 2, making this the sixth interest rate hike of the year. And, the Fed hasn’t been acting in isolation. The European Central Bank, the Fed’s counterpart in Europe, recently raised rates by 75 basis points to the highest level since 2009. ...
Russia-Ukraine War Skyrockets Nickel Prices
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Russia-Ukraine War Skyrockets Nickel Prices

By Brian Zhao  (Image: creative common license) The Russian-Ukraine conflict has caused a number of supply chain disruptions in addition to obstructing the flow of goods, driving up product shortages, and creating severe food crises around the world. Even nickel, a relatively available commodity, has undergone unprecedented price changes.  In March 2022, the London Metal Exchange suspended nickel trading due to its wild fluctuations caused by Russia’s invasion of Ukraine, which sent the market surging well over the $100,000 per tonne mark. The drastic increase of this raw material could wreak havoc for several industries that nickel supply is important for, such as stainless steel, magnets and alloys, electronic devices, medical equipment, and energy and power generation. ...
Rate Hikes and Legoland: South Korea’s Bond Market Woes
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Rate Hikes and Legoland: South Korea’s Bond Market Woes

By Edward Ding (image: iStock) For the South Korean bond market, 2022 has gone from bad to worse. Markets in Korea have been grappling with the same macro problems that have afflicted much of the world: high inflation, global recession fears, and monetary tightening have all converged to crimp corporate profits, breed uncertainty, and generally create a volatile financial environment. The Bank of Korea continues to follow the Fed in its regime of rapid rate hikes, a policy that has steadily pushed up borrowing costs in the local debt market. The uncertain macro environment has dampened investor demand, and issuers are finding it more difficult and expensive to access capital. This was all before the Legoland crisis. Korea’s first Legoland park opened in May of this year a...
Expanding H-1B: The necessity of skilled foreign labor
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Expanding H-1B: The necessity of skilled foreign labor

By Sebastian Marrero Featured image: iStock  In this article, I will discuss a few of the many economic benefits that H-1B workers provide in strengthening the U.S. economy, additionally talking over past efforts that have been made to weaken or remove the program altogether. Finally, I will argue that increasing visa caps and changing the way the program chooses its recipients will form a safer, stronger, and more equitable visa program for skilled foreign workers. What is H-1B? Foreign workers form an integral part of the American economy. According to the U.S. Department of Labor, they comprise 17.4 percent of the labor force. For technical fields that require extensive experience and education, demand for highly specialized foreign labor among U.S. employers is con...
Bread, Circuses, and… Gas Prices? Energy as the Symbol of American Prosperity
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Bread, Circuses, and… Gas Prices? Energy as the Symbol of American Prosperity

By: Claire Chen The U.S. Department of Labor’s August 2022 CPI report reveals that American consumers may finally see a respite in the inflationary processes that have contributed to a skyrocketing cost of living. The modest 0.1 percent increase in August’s CPI – still higher than expected, but consistent with July’s 0.0 percent increase and a dramatic reversal from June’s 1.3 percent increase – may explain the September 26 remarks expressed by Federal Reserve Chair of Boston Dr. Susan Collins, who states, “I think that it’s quite likely that inflation is near peaking and perhaps may have peaked already.” However, this measured outlook contrasts starkly with a media ecosystem that remains fixated on high prices. “Get ready for a food fight: High grocery costs are here to stay,” ...
How the Russo-Ukrainian War is Affecting Food Prices
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How the Russo-Ukrainian War is Affecting Food Prices

By: Ron Ye Around the world, food is getting increasingly expensive. The war in Ukraine and COVID-19 are the main factors behind it. COVID-19 has led to supply issues, growing inflation, and labor shortages. This has caused a surge in food prices in 2021 as countries reopened and demand increased. Now, compounded with the war in Ukraine, the rise in food prices has become more noticeable. Russia is now closed off from trade due to sanctions and Ukraine is unable to keep up its food export due to the Russian invasion.  An Analysis The rise in food prices may not stop anytime soon. According to the USDA, the harvest for Ukrainian wheat planted last autumn begins in late June. This comprises a majority of the wheat from Ukraine. With the harvest not occurring until late Jun...
Sanctions Trigger Market Volatility Amid Russia-Ukraine Crisis
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Sanctions Trigger Market Volatility Amid Russia-Ukraine Crisis

By: Lexi Blakes Thursday, Feb. 24, U.S. President Joe Biden announced additional sanctions on Russian banks in light of the recent escalation of the Russia-Ukraine conflict. The crisis has been mounting since tensions developed in 2014, when protesters in Ukraine overthrew President Viktor Yanukovych, who was partisan to Russia’s interests. That same year, Russia invaded and annexed the Ukrainian peninsula of Crimea. In the years following, the Minsk Accords were signed by Russia, Ukraine, France and Germany, but it did little to protect Ukraine from Putin’s ambitions. Now, in 2022, Putin has ordered a full-scale invasion of Ukraine. Citing pro-Western revolutions and NATO eastward expansion, Putin declared that Russia did not feel safe to “develop and exist” because of the “con...
Pacific Island Economies
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Pacific Island Economies

By: Trevor Jones An often overlooked facet of global economics is the functionality of island economies. I began exploring this in the wake of the Tonga volcano eruption in January 2022, when a massive eruption caused rampant flooding in the Pacific island nation. The publicity of this disaster led me to consider how the economies of Pacific islands work, given how they have seemingly little area or natural resources to build their wealth off of. With this article I aim to explore the broad components of island economies and compare them to our economy here in the United States. Primarily, the biggest change on the surface is the ideology behind these countries’ economies. Countries like Tonga or any other island in the Pacific are not focused on industrialization and developmen...
Russo-Ukrainian Crisis: The Effectiveness of Economic Sanctions on Russia
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Russo-Ukrainian Crisis: The Effectiveness of Economic Sanctions on Russia

By: Ron Ye When I began working on the first version of this article, it was about a week before the start of Russia’s invasion of Ukraine. There were many uncertainties. Would Russia even invade Ukraine? It seemed like a risky move for Putin to make. How willingly would European nations support sanctions on Russia? Germany had shown reluctance in agreeing to the possible sanctions. Wouldn’t China help Russia economically? During the Olympics, Putin and Xi Jinping seemed to have had each other’s backs. Because of recent events, these uncertainties have been mostly answered.  However, the effectiveness of the sanctions that have been placed on Russia remains yet to be seen. Current Situation On February 23, 2022, at around 9:00 p.m. U.S. Central TIme, the Russian Federation...