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WINTER 2014 GENERAL BODY MEETING, Tuesday January 7 Time: 8 PM | Location: Intercultural 108 Join DES board to hear about our upcoming events, learn more about the first annual undergraduate research competition, and find out how you can be more involved with the DES. UNDERGRADUATE RESEARCH IN ECONOMICS INFO SESSION, Session 1: Wednesday, January 15, 9 PM at MacAlister 2019-2020 Session 2: Thursday, January 16, 7 PM at Intercultural 108 DES will be hosting the Inaugural Undergraduate Research in Economics Competition (UREC) over the Winter Term. The information sessions will provide details about project applications, competition timeline, and structure. Students interested in UREC must attend an information session. CASINOS: COST-BENEFIT ANALYSIS IN ACTION, Mon February 3 Time: 6 PM | Location: TBD Casino development has always been hot political debate. Are casinos good for our economy? Do casinos promote ‘poor’ behavior? What’s the right choice? As Philadelphia prepares for a new casino in early 2014, Stephen P. Mullin will present on the economic tools used to evaluate this decision, the politics involved, and Philadelphia’s future casino development. Stephen Mullin, President of Econsult Solutions, Inc., is a leading economist in Philadelphia. CAREER PATHS IN ECONOMICS, Thursday, February 13 Time: 6 PM | Location: TBD What can we do with a degree in Economics? Economics is a broad subject, and we can do a lot of things with a degree in Economics. Come to the event to discuss the career paths that need economics students. Keep in tune with us for detailed information about speakers and detailed agenda. GRADUATE SCHOOL: WHAT’S NEXT? Time: TBD | Location: TBD Students with economics degrees continue their education in various fields. What are the possibilities? How do these fields utilize knowledge of economics? This event will feature several professionals who earned their undergraduate degree in economics and went on to complete graduate studies. (Visit http://www.drexeleconomicssociety.com/category/upcoming-events for more information)
Student Spotlights Molly Mamourian
For senior Molly Mamourian, the path to becoming an economics major with a minor in finance has not been linear. With work experience in the New York City fashion industry coupled with previous studies in the social sciences, Molly brings a unique perspective to the field of economics. She was ultimately drawn to economics for its ability to graphically and mathematically model human behavior, and she credits Professor Yotov for inspiring her to switch her major after taking his ECON 201 course. She has since shown her dedication to the field by consistently earning Deanâ€™s List Honors and posting top grades in her classes. Upon graduation in 2014, Molly hopes to pursue a career in the field of development economics and international trade.
Maia Livengood graduated with her BSBA from LeBow College of Business in 2013, having concentrated in Economics. Her cumulative 3.9 GPA as well as her concentration-specific achievements qualified her for induction into Omicron Delta Epsilon, a prestigious Economics honors society. Throughout her time at Drexel, Maia was involved in various literary organizations, serving as a contributing writer and editor with DPG publications, Ask, and The Triangle. She sought a breadth of campus involvement through activities such as playing for DU Womenâ€™s Club Soccer, working in the capacity of Resident Assistant (RA), taking on a role in the 2011 production of the Vagina Monologues, and studying abroad in Galway, Ireland. Though only indirectly related to her academic studies, each experience enhanced her marketability as a well-rounded, driven job candidate. Since graduating, Maia has worked for Johnson Matthey as part of the Precious Metals Products Divisionâ€™s Graduate Rotational Scheme. The accelerated leadership program aims to develop a handful of recent graduates through targeted training and project-based work over the course of three years. Each graduate will rotate to various business units both domestically and internationally during the scheme, and will be placed permanently following the three years of rotations. In her current role, Maia is serving as a data analyst for precious metals refining. Her academic foundation in analysis, from coursework in Economics, Statistics, and Operations Management, has been critical to her success in this capacity.
National Economy Capitol Hill Problems Cause Economic Problems By Sunny Patel On October 16, 2013, the United States Congress developed and finalized the basis for an agreement to raise the debt ceiling and reopen all non-essential government functions to avoid a catastrophic default on debt payments. The true impact of the 16-day government shutdown will not be fully understood until early 2014. Analysts at Standards & Poor’s have forecasted the 2013 shutdown to have obliterated $24 billion out of the previously stressed United States economy. As a consequence, Gross domestic product (GDP) growth in the fourth quarter is now predicted to be only 2.4% as opposed to 3.0%. Beth Ann Bovino, chief economist at S&P, concurs: “Because it’s happening all at once, and so quick, so fast, unplanned; it’s going to hurt. We can absorb it, but it still hurts.” As a direct result of the October occurrences on Capitol Hill, the United States small business sentiment fell into a seven-month low. The National Federation of Independent Business (NFIB) reported the Small Business Optimism Index tumbled 2.3 points from 93.9 to 91.6, which is the lowest since March 2013. The index averages 10 criteria (planes to increase employment, plans to make capital outlays, plans to increases inventories, etc.) to determine overall optimism/pessimism from small business owners. Businesses worry that a government shutdown would weight heavily on sales, sales growth, and inventory turnover. NFIB stated:, “Since the Washington paralysis could hardly be good news, it would be expected that the optimism measures would deteriorate, and they did. Uncertainty is the enemy of economic growth.” Despite the proliferation in deleterious reports, equity markets remain stronger than ever. The genuine consequences will be postponed till Q4 earnings reports are released in mid-January. Small business owners have condensed job creation and capital-spending plans due to increased uncertainty generated by lawmakers. The once balanced inventory levels have suddenly become excessive. It remains to be comprehended as to how severe the 16-day impasse will affect the national economy, but initial prognostications are not positive. *Reference sources are available on DES’s website.
Regional Economy Philadelphia Public Education and School Choice By Ryan Kirk Philadelphia public schools are facing mounting financial and logistical problems with each passing year. As they struggle, they are also facing increased competition from private and Archdiocesan schools. The Catholic school option is hardly cheap; for the 2013-2014 year, Archdiocesan tuition costs were $6,150. This represents an increase of 5.13% over the previous year’s tuition of $5,850, significantly higher than the annual inflation rate of 1% for 2013 so far. On the other hand, despite rising tuition costs, the seventeen Archdiocesan high schools have managed to attract over 14,000 students. However, the school competition faced by the Philadelphia public school system is not limited to Archdiocesan high schools – because
religiously-unaffiliated charter schools are also drawing students at rapidly increasing pace. The Philadelphia Public School system is currently spending about $15,000 per student (Boehm). Many critics believe that students have received a sub-par education for the exorbitant price tag. Thus, educational reform groups have begun to tout the benefits of a school voucher system. The voucher system would subsidize the cost of private school tuition, allowing students to attend a school that they were not able to afford previously. These vouchers can be given out based on financial needs, student ability or location. People who fight against this voucher system argue that the government should not be reimbursing students to attend non-government run schools. However, voucher-proponents say that this voucher educational system represents the perfect blend of public and private sector cooperation. The government allows all students to have an equal opportunity at a quality education, and the school choice market ensures that best schools succeed. In addition, Philly public schools are crumbling, both educationally and physically. A recent inspection by the school district found that 50 schools are in need of repair, with an estimated cost of $4 billion dollars. Aside from the infrastructure, there have also been massive budget-cuts to all “non-essential” departments, including school nurses and counselors. Each day, thousands of students are receiving inferior education, while we are inadequately preparing our students for life after graduation. That is, assuming these students graduate, which about 40% of them will not do in 4 years. If we do not confront present educational concerns, we will continue to face the severe consequences increasingly in the future. *Reference sources are available on DES’s website.
International Economy By Francisco Goncalves BRAZIL It seems as though Brazil’s “wonder decade” might have finally come to an end. Brazil’s economy has been declining, but with the nation having its highest average income in its history, 5.4% unemployment rates and an economy growing at the same pace as that of the United States, it is easy to assume that the nation is sunshine and good times. However, these are not always the best indicators for economic success. Although Brazil had a pick-up in the second quarter of the year, the growth data from the third quarter released on November 14 showed that the economy contracted 0.01% whereas it had been expected to expand by 0.20%. One reason for a contraction in the economy can be seen by looking at the investment and trading occurring in Brazil: inflation had not been fought against properly and had been rising more so than wanted, and interest rates were not changed to tailor the increase in inflation, so companies stopped investing. Examples of decreased trade include: Magazine Luiza, a home goods retailer, is down 17.53%; pharmacy Raia DrogaSil is down 29.13%; and Cemig, one of Brazil’s most traded electric power American depositary receipts, is down 42% from the beginning of 2011. Even the rich in Brazil are not safe: Eike Batista, the world’s seventh richest man in 2013, filed for bankruptcy this year. With the World Cup on the horizon and societal unrest increasing each day (due to allocations for new stadiums), it is possible that the world will see a Brazil in a different light in the upcoming year. MIDDLE EAST AND NORTH AFRICA With the Arab Spring still raging in many nations in North Africa and Middle East, it has been tough for the economies of the region to find stability. Syria and, to an extent, Egypt, are still fighting over the 4
leadership of their nations and chaos reigns as armies, civilians, and even terrorists try to take control. With conditions like that, it is difficult to find businesses and people to invest in. Further, refugees are pouring out of Syria into its neighbors, and nations such as Jordan, which has been stable in recent years, must find a way to deal with the issue of refugees and the problems associated with keeping them. Libya, has been experiencing fluctuation in GDP growth since 2011: GDP growths of -62.1%, 104.5% and -5.1% and an expectation of 25.5% in 2014. This fluctuation arose from complications in oil production from protesters demanding jobs. Tunisia, another country that experienced political upheaval, has also experienced fluctuations that have stemmed from a tough time attempting to transition to their new government, but the oscillations have only been 3.6% in 2012, 3.0% in 2013 and an expected increasing of 3.7% in 2014, much less than those being seen in Libya. Overall, the region went from 5.6% in 2012 to just 2.8% in 2013, and if the problems that are still ongoing in nations such as Syria and Libya persist it is tough to know how long it will take for the region to find stability as a whole.
*Reference sources are available on DES’s website.
Special Topic: Much Ado About Obamacare By Andrienne Beckham Since the beginning of President Obama's second term, American media has used the term “Obamacare” so often that one would think every American would be a healthcare expert. However, there are many people unaware of its real name and how it will affect the public once enacted. All that is clear from the Obamacare discussion in the media is that there is a lot riding on its success or failure. While every politician and news anchor has been anything but shy about voicing their opinion, further research into Obamacare leads me to one conclusion: we all should stop jumping to one side. Obamacare, officially named the Patient Protection and Affordable Care Act, is one of President Obama's most notable promises in his presidency. It aims to move America closer to nationalized health care through an individual mandate, insurance exchanges, and various regulation. The mandate requires that US citizens have a federally approved health insurance plan otherwise they will be subject to a yearly fine. Once fully phased in by 2016, the fine will either be $625 or 2.5% of their income if this percentage of income is larger than $625. Insurance plans will either be provided by employers, privately bought, or bought on established federal exchanges which opened at the start of October. On the federal exchanges, tax credits are available to families making 133% to 400% of the federal poverty line to assist with paying for coverage.
From the beginning, Obamacare has faced strong opposition from the Republican-controlled House of Representatives which has voted to eliminate Obamacare over forty times. Since October, Obamacare has been under harsher scrutiny after its problems with the exchanges website, healthcare.gov, and cancellations of insurance policies in a few states. The problems with Obamacare are significant, but because of the law's timeline, I would argue that it is too early to dismiss the act so quickly. The plans bought on these exchanges and a substantial amount of policy changes to health care do not take effect until 2014. Certain tax code changes have also yet to be phased in accordance with the act's schedule and allotments for Medicaid will not take full effect until 2020. With still so much to be seen, it does not make sense to call Obamacare a failure yet. You wouldn't taste a cake halfway through making the batter and throw it out because it doesn't taste like cake. *Reference sources are available on DES’s website. 5
Economics Tutoring Center WINTER HOURS Struggling with your economics courses? Come to the Economics Tutoring Center to get help with concepts, homework, and problems. Qualified Economics students serve as tutors for all undergraduate economics courses, free of charge! Tutoring takes place in the Advising Center, 3rd Floor, Gerri C. LeBow Hall from Monday through Friday except final exam week.
9 a.m.—1 p.m.
9 a.m.—12 p.m.
WANT TO BE A TUTOR? Great grades and passionate about economics? Interested in becoming an Economics Tutor? Send us your resume and unofficial transcripts to be considered for a tutoring position: firstname.lastname@example.org
GAME TIME!!! Please send your answer to email@example.com. The first person who has a good answer will receive a prize from Drexel Economics Society. :) Question: Using the theory you have learned in your economics classes, explain why Jebediah Smith might decide to stop studying for an exam and go to the DAC instead. Be creative!
DES’s Past Events in Fall 2013
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