Pertinent Category: Daily Economy

A Prediction Social Security Recipients Won’t Like

– October 8, 2015

Every October, Social Security recipients, numbering close to 60 million today, get the announcement of the cost-of-living adjustment (COLA) to be applied to their benefits the following year. This usually results in a little extra money in their pockets. But the data we have today are sufficient to forecast that the adjustment, sorry to say, will be zero next year.


Humans Aren’t Wired For Investing

– October 7, 2015

Economists are frustrated by investors. Investors will just not follow their models. You see, there is a tendency among investors to sell stocks after a big drop in price, at exactly the time when the expected return has increased. On the flip side, there is a tendency to buy just after prices have risen, when expected returns are lower.


As U.S. Weighs Trade Pact, Trade Deficit Grows

– October 6, 2015

With the Trans-Pacific Partnership heading to Capitol Hill for ratification, U.S. policymakers will weigh the proposed free-trade zone in an increasingly challenging trade environment. The strong dollar, a weaker global economy and low energy prices have all worked against the United States when it comes to trade, said Bob Hughes, senior research fellow at the American Institute for Economic Research. Today, the U.S. posted a trade deficit for the month of


How Lesser Investments Can Create Better Investors

– October 5, 2015

 The humans that put their money into financial markets have a tendency to underperform their investments — by a wide margin.


Mixed Reports May Give Fed (More) Pause

– October 2, 2015

The broadly disappointing September Employment Report continues the recent trend of mixed economic reports but overall suggests the economy continues to grow at a slow to moderate pace.


AIER Begins Distribution to Libraries

– October 1, 2015

AIER materials are now available online in more than 500 libraries in Massachusetts. The distribution through the Massachusetts Library System went live September 23, and is part of the Institute’s new partnership with Biblioboard, an electronic library subscription service.


Lefty Presidents Are Better For Markets

– September 30, 2015

I tallied S&P 500 index returns under different presidents. Even with Herbert Hoover’s atrocious left-handed start from 1929 through 1932, lefty presidents have seen annual S&P 500 growth almost 2 percentage points better than righty presidents. Under their 40 years of tenure, lefty presidents have seen price appreciation of about 7.2 percent per year. This compares with a paltry 5.3 percent during the 52 years of righty presidents.


How Obama’s College Scorecard Helps (and Doesn’t)

– September 29, 2015

Earlier this month, the Department of Education released a new College Scorecard which contains a variety of information about almost all U.S. colleges, including costs, graduation rates, test scores and students’ future earnings. While it is a great source of data, the Scorecard has important limitations and users should be careful when using student outcomes to compare colleges. When comparing costs, however, the Scorecard can be more useful.


The Unresolvable Debate on Job Creation

– September 28, 2015

If you’re a political candidate, “jobs” is a word that almost guarantees applause at any rally, regardless of party.  We all agree that creating and sustaining good jobs is a key priority, but we’ve had essentially the same debate on how to do it for decades.  So why do we keep having the same debate?  Isn’t economics scientific and empirical? Shouldn’t we know who is right, based on their policies’ outcomes?


New GDP Report Signals Continued Economic Growth

– September 25, 2015

This morning we received word that the second-quarter Gross Domestic Product numbers were revised upward by the Commerce Department, from 3.7 percent in the prior estimate to 3.9 percent. It was the third estimate of these numbers; the initial estimate was just 2.3 percent. Consumer spending rose at a healthy pace of 3.6 percent, and most other areas of domestic demand contributed positively to the gain in the quarter, noted Bob Hughes, senior research fellow at the American Institute for Economic Research.


Maximize Social Security Benefits: File And Suspend

– September 24, 2015

Fifty-two percent of married Social Security beneficiaries receive at least half their total income from Social Security. Optimizing the claiming decision is critical to making sure they maximize their income. I want to take an opportunity to explain one way to do that: the “file and suspend” strategy for married, two-earner households. This approach has the potential to provide a couple with income from the Social Security system for several years without reducing their long-term benefits. The strategy is well understood by financial planners, and yet many individuals are still unfamiliar with it.


Learning Economics With Movie Tickets and Babysitting

– September 23, 2015

Teachers who went through the AIER Teach-the-Teachers Initiative continue to dazzle us with creativity and innovative practices in their classrooms. On September 9, 2015, we observed two American History II lessons taught by Drew Gibson at Mount Greylock Regional School in Williamstown, Mass. The purpose of the lessons was defined by the teacher as “discovering the story behind economic data and charts.” Mr. Gibson used data on babysitting wages per hour, and movie ticket prices from 1945 through 2000, to make an interesting point about supply, demand and price.