Friday, March 13, 2009

Minimum wages, corn subsidies, wealth and GDP, health care, and chocolate

Here's a look at the effect of increasing the minimum wage... as many would expect, there's a fair amount of job loss, and mostly among the young.

The Business Pundit says that we should stop bailing out corn. Ah, to dream...

NYT reports that household wealth has fallen by trillions of dollars. To this, I'd like to emphasize two things. First, that household wealth was inflated beforehand, anyways. Secondly, that this has little to no direct effect on GDP, since GDP is "the market value of all final goods and services produced within an economy in a given period of time" (from Mankiw's textbook). That is, the 2009 GDP does not take into account changes of market values of things produced in other periods of time, by definition. The fall in household prices just means that houses were bad investments.

Professor Reinhardt explains the bit of stimulus money that goes to comparative effectiveness analysis in health care. There is no subversive plot.

A tax on chocolate in England? Oh no! Though, I'd imagine that the demand for chocolate is probably highly elastic, meaning the burden of the tax would fall primarily on suppliers. I can't imagine cacao bean farmers are wealthy enough to take such a hit to production, but I guess it depends on the size of the tax.

Posting may be spotty next week.

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