Archive for November, 2013

Price Ceiling on…TVs!

November 14, 2013 1 comment


In Venezuela, a government-mandated “fair price” for electronics at a large retailer has created, to no one’s surprise, excess demand.

How much excess demand?

Members of Venezuela’s National Guard, some of whom carried assault rifles, kept order at the stores as bargain hunters rushed to get inside.

“I want a Sony plasma television for the house,” said Amanda Lisboa, 34, a business administrator, who had waited seven hours already outside one Caracas store. “It’s going to be so cheap!”

Televisions were the most in-demand item in the line outside one Caracas store, though people waited more than eight hours for fridges, washing machines, sewing machines and other imported appliances.

Why would the government impose this price ceiling?

Maduro faces municipal elections on Dec. 8. His popularity has dropped significantly in recent months, with shortages of basic items such as chicken, milk and toilet paper as well as soaring inflation, at 54.3% over the past 12 months.

If you can predict which items will next be in short supply in Venezuela, you just might know more about economics than a certain government official.


The Best Career Planning?

November 9, 2013 Leave a comment

A different take on a question that consumes many students…

What if we are stable, successful and happy, but don’t know exactly where we are going or how we are going to get there? Is that OK?

I love the article’s final quote, from Peter Drucker:

Successful careers are not planned. They develop when people are prepared for opportunities because they know their strengths, their method of work, and their values.

Categories: Education

The Problem with Working at Google

November 7, 2013 Leave a comment

It’s hard for some students to imagine, but getting that dream job may not be an unqualified good

The worst part of working at Google, for many people, is that they’re overqualified for their job. Google has a very high hiring bar due to the strength of the brand name, the pay & perks, and the very positive work culture. As a result, they have their pick of bright candidates, even for the most low-level roles….


Some of the downsides of so many overqualified people:


It’s hard to get promoted quickly, since the person above you as well as at your level both have great educations and strong work ethics. When it’s standard to be awesome, and the work isn’t particularly tough to begin with, it’s hard to differentiate.


The work may not be intellectually rewarding (read: boring). It can be tough to feel a sense of accomplishment about what you do, and that sense is actually quite important to the type of people who are ambitious enough to get over the Google hiring bar.


Some people end up losing their drive by working at Google. They get accustomed to not trying their hardest, but still having an awesome day-to-day life.

Another exhibit in the “I’m-so-tired-of-hearing-the-‘find-something-you-love-and-you-will-surely-succeed’-baloney” file.

But, maybe more relevant to class, this could provide some interesting points for discussion when we get into the economics of labor markets in the intermediate class.

Categories: Uncategorized

What 7.2% Means for China’s GDP

November 6, 2013 3 comments

Chinese Premier Li KeQiang says only 7.2% growth in GDP is needed to sustain employment at current levels in China.

Two things to consider:

  • As this growth rate is about triple what is normal for developed economies, if this rate of growth is really necessary to meet employment targets, it’s a strong indication that there is still a very large number of people entering the non-agricultural workforce in China.  China’s population is growing very slowly now and will soon begin to decline very slowly. So the pressure on employment must be coming from either demographic changes or continuing big moves into the non-agricultural workforce. It’s hard to imagine how much longer this can happen with a slow-growing population.
  • Growth of 7.2% would add about $500 billion to China’s GDP. To reach the same level of nominal GDP growth, the US would have to have annual growth of 3.3%. In fact, growth of around 2.3% is more likely. If you project these two growth rates into the future, and assume China’s GDP was $6.99 trillion in 2013 and the US GDP was $15.06 trillion, in which year would China’s economy become larger than the US economy?

A bonus point on the midterm to the first student who gets the answer right in the comments!

Categories: China

Answers to November 1 Quiz

November 5, 2013 Leave a comment

1. b; 2. a; 3. c; 4. a; 5. d; 6. c; 7. b; 8. a; 9. a; 10. a; 11. d; 12. b; 13. d; 14. d; 15. a; 16. d.

Check your own papers with integrity.

Categories: Microeconomics