Economy and Government

By: Anton Kozyrev In 2003, the SARS epidemic hit Hong Kong – and it hit hard.  Hong Kong would go on to suffer 299 deaths related to the airborne illness – one-fifth of the global death total. This harrowing chapter served as the impetus for a major shift in Hong Kong officials and legislators’ mentality and approach to infectious diseases. The people of Hong Kong became more diligent when it came to illness, with a variety of measures ranging from habitually wearing surgical masks for a cold or flu to comprehensive education on how illnesses are transmitted. These efforts proved crucial when the ongoing COVID-19 pandemic began in Wuhan, China. Hong Kong acted swiftly and decisively to implement proper social distancing measures and other precautions, never allowing the infecti...

By: Trevor Jones Heroin users at Platzspitz Park, June 1990 Drug use, especially the opioid crisis, is one of the most prominent public health issues in the United States today. According to drugabuse.gov, a government-run site detailing the data about drug abuse in the United States, over 47,000 people die every year due to opioid overdose. The same webpage also states that 1,700,000 American citizens suffer from prescription opioid-related substance abuse disorders, as well as 652,000 with a heroin use disorder. While there is potential for these latter two statistics to overlap, the magnitude of these numbers is still alarming. Not only have I seen the effects of substance abuse in my own life, but many of my new classmates that I have met over the last semester have had similar ...

During the 1970s, the United States suffered from double-digit inflation, rising unemployment, and bleak economic prospects.  Declining domestic industry and increasing global competition sowed the seeds of doubt in American minds and the OPEC oil embargo shook the economy to its core.  The crisis culminated in a period of stagflation, a stagnant economy ill with both high unemployment and inflation.  Monetary policy and the Federal Reserve had failed in both of their mandates: full employment and price stability.  The global monetary order created by the Bretton-Woods agreement collapsed and the US found itself forced to detach the dollar from the gold standard.  However, the world today is not racked by hyperinflation.  The Fed eventually managed to tame th...

The U.S. economy has drastically changed ever since the onset of the coronavirus pandemic. Businesses shuttered, teleworking at an all time high, are all part of the “new normal” we are living through. The lack of economic growth has called for the Federal government to enact very low interest rates in order to spur economic growth and prevent an economic crisis like we had in 2008. What do low interest rates mean? The cost of borrowing any money is now extremely low compared to before because the government wants people to borrow money to spur economic growth. This low interest rate includes student loans, which intrigues a large percentage of the Vanderbilt student body. The interest rates on student loans is at a rate of  2.75%, much lower than a typical rate in any other year. Rate...

There has been a drastic increase in worker violations since the onset of COVID-19. The American employer has responded by seemingly being passive with regards to the exploitation of their labor as times have become especially dire. There is no time to be prideful with fighting for their deserved liberties, as now COVID has led many to the mentality of survival. Many workers are grateful for just having a job, as with an unemployment rate of about 8.4%, getting too picky can easily lead to them being one of millions not having a stable source of income. The Washington Center for Equitable Growth published a paper on some potential violations. The typical worker on the wrong side of these violations lost approximately 20% of their hourly wage.  Furthermore, more than 20% of work...

Since January 2012, the Federal Reserve has maintained a target of 2 percent inflation for the US economy.  The target allows the Fed to perform its congressionally mandated jobs of maintaining price stability and maximum employment.  Before the 1970s, economists believed inflation and unemployment had a permanent negative correlation so that low inflation and low unemployment could not be achieved at the same time.   However, the 1970s oil shock brought on a period of high inflation and unemployment known as stagflation.  With the high rates of the 1970s, the Fed needed a new way to control inflation.  At the time, most central banks used currency pegging to control inflation by controlling the value of currency.  Relatively stable currency values ac...

As part of the historic 2nd quarter contraction in the US gross domestic product, investment spending decreased by a massive 49% under the duress precipitated by the COVID-19 pandemic.  Poor general economic conditions translated to uncertainty in the minds of investors.  Meanwhile, investors received government relief aid that they did not use to invest.  As a result, there is now an estimated $1.5 trillion in unused capital in private equity funds alone that could be invested as soon as negative economic conditions recede. This massive glut of capital could create an explosion of investment and is therefore referred to as dry powder.  Pandemic induced uncertainty has contributed to a buildup of dry powder in the global economy, something that economists are concer...

For many people, the stock market seems daunting, regardless of how much money you have or do not have. The number one concern investors have about any stock is the price. Lower priced stocks are more attractive to investors for a multitude of reasons, but there is one main reason: they can buy more shares with the same investment. Smaller share prices make it more attractive for small investors to buy shares of a stock. Companies know this truth about investing; for that reason, the most popular stocks, including Apple, Google, and Amazon, have all split multiple times in the past.  Split? Yes, all of these titans of industry have split up their shares into multiple shares of stock before. For the main reason of attracting investors by offering a smaller price per share. However,...

On June 4, 2020, the European Central Bank (ECB) announced it would increase its envelope of asset purchases by €600 billion to a total of €1.35 trillion. The increased purchases will further the central bank's policy of monetary easing in order to help households and businesses deal with the economic effects of the COVID-19 pandemic. The increase comes in response to disinflation and fears of a possible deflationary spiral. The ECB plans to continue asset purchases until it believes the coronavirus crisis is over and plans to reinvest any payments from maturing assets into further purchases. European interest rates will remain unchanged with deposit rates still negative. The ECB expects to keep rates at current levels or lower until inflation nears its 2% target.