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Category Archives: Financial System

The Value of a College Degree – NY Fed

Jaison R. Abel and Richard Deitz: “Not so long ago, people rarely questioned the value of a college degree. A bachelor’s degree was seen as a surefire ticket to a career-oriented, good-paying job. Today, however, many people are uncertain whether going to college is such a wise decision. It’s easy to see why. Tuition costs have been rising considerably faster than inflation, student debt is mounting, wages for college graduates have been falling, and recent college graduates have been struggling to find good jobs. These trends might lead one to believe that college is no longer a good investment. But when you dig into the data, is this really true? This week, we examine the value of a college degree in a four-part blog series. In this first post, we do the basic math and show that despite what appears to be a set of alarming trends, the value of a bachelor’s degree for the average graduate has held near its all-time high of about $300,000 for more than a decade. To estimate the value of a bachelor’s degree, we measure the costs and benefits for the average college graduate—calculations outlined in detail (with appropriate caveats) in our recent article in the New York Fed’s Current Issues series. The costs of college are the average tuition and fees paid by undergraduates plus the “opportunity costs,” or the wages one gives up while in school, estimated as the average wages of someone with only a high school diploma. The benefit of college is the “college wage premium”—the extra wages one can expect to earn having obtained a college degree, estimated as the average wage of college graduates compared with the average wage of those with only a high school diploma, summed up over a working life of more than forty years.”

Report – Stimulus and Fiscal Consolidation

Stimulus and Fiscal Consolidation: The Evidence and Implications, Dean Baker and David Rosnick. Center for Economic and Policy Research, July 2014. “This analysis looks at the evidence on the effects of stimulus packages and fiscal consolidation during a severe economic slump, as the recent economic crisis. The first part deals with the most important literature onContinue Reading

World Bank Report: Digital Payments Vital To Economic Growth

News release: “Integrating digital payments into the economies of emerging and developing nations addresses crucial issues of broad economic growth and individual financial empowerment, according to a new report by the World Bank Development Research Group. The report, The Opportunities of Digitizing Payments, examines, for the first time, growing evidence from around the world about howContinue Reading

2014 Cost of Data Breach: Global Analysis

News release: “Throughout the world, companies are finding that data breaches have become as common as a cold but far more expensive to treat. With the exception of Germany, companies had to spend more on their investigations, notification and response when their sensitive and confidential information was lost or stolen. As revealed in the 2014Continue Reading

GDP Up in Second Quarter 2014

News release and tables, BEA: “Real gross domestic product (GDP) increased 4.2 percent in the second quarter of 2014, according to the “second” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 2.1 percent. The second-quarter growth rate was revised up 0.2 percentage point from the “advance” estimate releasedContinue Reading

New Statistics on the Activities of U.S. Multinational Enterprises Now Available

“The Bureau of Economic Analysis has released preliminary 2012 statistics on the outward activities of multinational enterprises (AMNEs). Outward AMNE statistics cover the worldwide activities of U.S. multinational enterprises (MNEs). These statistics provide information on the finance and operations of U.S. MNEs, including balance sheet and income statement details, employment and employee compensation, sales, value added, capitalContinue Reading

High level hacking of US financial system linked to Russia as FBI investigates

Bloomberg: “Russian hackers attacked the U.S. financial system in mid-August, infiltrating and stealing data from JPMorgan Chase & Co. (JPM) and at least one other bank, an incident the FBI is investigating as a possible retaliation for government-sponsored sanctions, according to two people familiar with the probe. The attack resulted in the loss of gigabytes of sensitive data,Continue Reading

An Update to the Budget and Economic Outlook: 2014 to 2024

“The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. However, later in the coming decade, if current laws governing federal taxes and spending generally remained unchanged, revenues would grow only slightly faster than the economy and spending wouldContinue Reading

Workplace Stress in the United States

OECD Economics Department Working Papers. Workplace Stress in the United States. Issues and Policies. Michael Darden, July 21, 2014. “Despite relative affluence, workplace stress is a prominent feature of the US labour market. To the extent that job stress causes poor health outcomes – either directly through increased blood pressure, fatigue, muscle pain, etc. or indirectly through increasedContinue Reading

“Crisis” Management: Uncertainty and the Workplace

August 2014 EBRI Issue Brief #403 Paperback, 20 pp. Employee Benefit Research Institute, 2014 Executive Summary: “While the nation is now a few years removed from the financial turmoil that led to the so-called Great Recession, “crisis” is a word still much bandied about. Crisis is, after all, something that cries out for swift and decisive action—andContinue Reading

The Simple Analytics of Helicopter Money: Why it Works – Always

Buiter, Willem H., The Simple Analytics of Helicopter Money: Why it Works – Always (August 21, 2014). Economics, Vol. 8, August 2014, DOI: org/10.5018/economics-ejournal.ja.2014-28. Available for download at SSRN: http://ssrn.com/abstract=2484853 “We provide a rigorous analysis of Milton Friedman’s parable of the ‘helicopter’ drop of money – a permanent/irreversible increase in the nominal stock of fiat baseContinue Reading

Evaluation of Systematic Trading Programs

Munenzon, Mikhail, Evaluation of Systematic Trading Programs (August 11, 2014). Available for download at SSRN: http://ssrn.com/abstract=2478676 “This paper is intended as a non-technical overview of the issues I found valuable in evaluation of systematic trading programs both as a systematic trader and as a large, institutional investor, having looked at numerous, diverse managers in this spaceContinue Reading