Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:
What a hiring slowdown signals about the state of the U.S. economy [PBS]
At some universities, parents can pay to make sure their children are cared for, the way they were back home [The New York Times | Archive]
Norway is set to impose a temporary ban on smart glasses in public places, including beaches, parks, and schools [Gizmodo]
Demand is booming for Slovenian domain names (.si) following the executive order requiring government agencies to refer to artificial intelligence (AI) as super intelligence (SI) [TechCrunch]
Trade deficit hits $105.6 billion, widest since just before Trump tariffs enacted last year [CNBC]
The bottle deposit in most deposit states has been 5 cents since the early 1980s. Four decades of inflation have quietly drained the incentive. Massachusetts’s redemption rate fell from 87% in 1995 to 33% last year, but Connecticut’s more than doubled after it raised its deposit to 10 cents. This week’s article explains how this policy tool is supposed to work and why a frozen price breaks it.
Inflation Quietly Broke the Bottle Deposit
I was bored last week and stumbled onto one of my favorite Seinfeld episodes: “The Bottle Deposit.” If you’re not familiar with the premise, two neighbors hatch a plan to round up bottles and cans around New York City and haul them over to Michigan to cash in on the ten-cent refund.
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So... question. Beth Hammack, President of the Fed in Cleveland, states: "On average, what we have seen over the past 12 months is 41,000 new jobs being created each month. That's largely in line with my estimate of what the break-even is, which was borne out by the fact that the unemployment rate, which I think is the single best measure of the health of the labor market, has continued to be stable at a low number."
In its revised 2025 Statement on Longer-Run Goals and Monetary Policy Strategy (https://www.federalreserve.gov/monetarypolicy/monetary-policy-strategy-tools-and-communications-statement-on-longer-run-goals-monetary-policy-strategy-2025.htm), the FOMC published the latest version of the "dual mandate as:
"The Federal Open Market Committee (FOMC) is firmly committed to fulfilling its statutory mandate from Congress of promoting maximum employment, stable prices, and moderate long-term interest rates."
Note that the Congressional Mandate refers to "maximum employment", not to "a low and stable unemployment rate".
In my lecture on Employment & Unemployment, I say that "many economists consider U-6 and the Labor Force Participation Rate to be better measures of how the economy affects the working-age population than the official unemployment rate (U-3)."
It may be that Hammack says this because she supposes that the Fed has more influence over U-3 than it does over U-6 or the LFPR. That doesn't change my assessment; it merely brings up that the Fed needs the cooperation of the legislative branch to bring about optimal employment/unemployment.
What do you-all think?