Approaching the new millenium

Thoughts are put forward in view of the approaching millenium, such things as large numbers of retirees, the phasing out of nuclear energy, the booming of the American economy, and the green movement.

Sherman Act 1890: Modernization and Impact on Markets

The major purpose of the Sherman Act was to prevent mergers from forming monopolies. It ensures consumers are protected from price discrimination, and there is free competition. Several economists, classical economists, neoclassical economists, Chicago school and Harvard school, pointed out several antitrust laws. Classical economists led by Smith argued that monopolists set prices at higher prices and raise their charges higher through understocking the markets hence corporations and mergers should be prevented. Neoclassical economists developed a model which assumes that there are no barriers to entry whereby there is free entry to the market. Harvard school also advocated for free competition. Either, the Chicago school was against the idea of free competition and proposed some acts from the antitrust laws to be removed. However, with advancements in technology, the Sherman Act has become outdated and some languages used are held, making it a challenge to interpret in courts. There is a need for the antitrust laws to be reformed to fit the changing technology. Bills should be proposed to make improvements to the acts. For example, Klobuchar Amy, in April 2021, proposed a bill seeking to reform antitrust laws to better perfect competition in the American economy.

Final Report on the Research of 2021 American Economy

In the past decade, America's inflation rate has always been mysteriously low, varying around 1%~3% (“United States,” 2021). However, to everyone's surprise, the inflation rate has reached 5% (“United States,” 2021) in June 2021, far higher than the Federal Reserve's 3.4% (Smart, 2021) prediction made in this year.

Schumpeter, Creative Destruction and the American Economy

The world is experiencing the age of Schumpeter and the American economy remains the premier example of a Schumpeterian economy. Despite its many naysayers and the doom and gloom professors that never stop predicting its demise, the American economy continues to show a remarkable capacity to rejuvenate. Orwell once commented that “England is perhaps the only great country whose intellectuals are ashamed of their nationality.” Left-wing intellectuals, he argued, hasted the divorce between intelligence and patriotism, which weakened the country’s morale and emboldened its enemies. Left-wing intellectuals, he argued, hasted the divorce between intelligence and patriotism, which weakened the country’s morale and emboldened its enemies. If he were alive today, it would be interesting to hear his opinion about the relentless barrage of criticism against everything American. One thing seems sure, though, America, not England, is the country most hated by its intellectual class. Any talk about Schumpeter’s “gale of creative destruction” is anathema to these “critical critics.” After all, when it comes to everything American, these individuals believe that they must criticize for the sake of criticism. The thought that capitalism has an internal mechanism akin to a fountain of youth must be disheartening to those whose blinders prevent them from accepting opposing facts. Frightenedly, these same intellectuals are apologists for every dictatorship the world over.

The Economics of Speed: The Electrification of the Streetcar System and the Decline of Mom-and-Pop Stores in Boston, 1885–1905

Small firms dominated the American economy in the nineteenth century, and they still dominate in many developing economies today. This paper tests whether geographic market segmentation due to underdeveloped intracity transportation technology precludes the emergence of large retail/wholesale stores. I exploit the natural experiment of Boston’s rapid electrification from its previous horse-drawn streetcar system, which occurred between 1889 and 1896. Analyzing newly digitized data, I find that rail-connected locations experienced a sharp decline in the share of sole proprietorships among food retail/wholesale establishments after the electrification relative to off-rail locations. Changes in market access due to streetcar electrification can explain this effect. (JEL L25, L81, L92, N71, N91, R41)

The Business Cycle, Inflation, and Unemployment Rate Nexus: An Empirical Approach

This paper revisits the main assumption regarding the original Phillips curve regarding the American economy, in which one assumes that the unemployment rate causes an inflation rate. In this context, this paper aims to evaluate if the variance of the inflation rate affects the unemployment rate and, besides, if there is a one-way causality from the variance of the inflation rate to the unemployment rate. Based on quarterly time series from 1959:04 to 2019:04 the empirical results show, via OLS and GMM methods, that the monetary policy affects the business cycle, and, in turn, the business cycle impacts the unemployment rate. Hence, the monetary policy affects indirectly the unemployment rate via the business cycle. On the other hand, the variance of the inflation rate contributes to an increase in the unemployment rate, consequently, there isn’t a trade-off between the unemployment rate and the variance of the inflation rate. Moreover, there is a one-way causality from the variance of the inflation rate to the unemployment rate. This is the contribution of this paper. At last, based on the Phillips curve, one expects that the unemployment rate causes the inflation rate. However, the Granger causality tests display a two-way causality relation between both variables.