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Federal Reserve Interest Rate Management: Combatting Speculation of Market Volatility and Recessionary Sentiment

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Abstract: Handling the multiple functions of monetary policy that protect the U.S. economy not only on a short term, but also long-term scale is a complicated responsibility assigned to Federal Reserve, in which their actions present a profound impact on

Abstract: Handling the multiple functions of monetary policy that protect the U.S. economy not only on a short term, but also long-term scale is a complicated responsibility assigned to Federal Reserve, in which their actions present a profound impact on consumer confidence towards financial markets and global economies. Specifically, one of the most important goals of the Federal Reserve is to mitigate the risk of the United States to enter a recession, while maintaining a balanced approach when making those policy decisions. In this thesis, we focus on the monetary policy of the Federal Reserve, particularly, their role in controlling interest rates to prevent recessionary sentiment in the current state of the economy. Since 2008, markets have been stronger and previous policies like Dodd-Frank have ensured that market collapses during the Great Recession do not repeat itself. Yet, fluctuations in the yield curve, polarizing investment views, and unsettled consumer confidence has pointed to another recession in the near future. In this case, we will look at the way the Fed has implemented short term policies to lower this risk in order to fight volatile markets, however, fluctuating interest rates has its consequences. The goal of this thesis is to analyze the various ways the Fed has managed interest rates in the past and present, and further, to offer a framework to serve as the most effective policy to combat volatility and recessionary sentiment in the U.S. economy.

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2020-05

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Factors of Economic Development and Implications for the Future

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This paper, titled “Factors of Economic Development and Implications for the Future” focuses on identifying historical factors that have impacted economic development and analyzing what changes may be important for the future. It uses studies done across the world in

This paper, titled “Factors of Economic Development and Implications for the Future” focuses on identifying historical factors that have impacted economic development and analyzing what changes may be important for the future. It uses studies done across the world in energy economics, economic development, economic policy, and more to identify important considerations for evaluating historical growth, as well as concerns for the future, particularly given the threat of climate change. Historically important papers, as well as newer insights both feature heavily. This literary review resulted in the finding that education, energy, trade, policy, institutions, endowments, and culture are all important factors for economic development. Endowments and institutions that arise from them are found to be the most important factor in explaining historical development. The paper also analyzes policy that the existing literature suggests could be beneficial for growth. Next, an analysis of factors that the literature identified as important for growth is carried out to assess which countries may have the highest potentials for future growth. The countries are ranked based upon a composite scoring system created from those factors. Countries in Central Asia feature heavily in the top ten entries, while many African countries narrowly miss out on the top ten but still rank relatively high. Together, the findings of both sections are used to discuss how economies have historically developed as well as possible policies to encourage future sustainable development. Both the literature and statistical findings suggest that for future growth promotion of strong institutions that promote property rights and economic growth will be important. They also suggest that coordinated energy policy to increase green technologies and decouple growth from emissions will be essential.

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2020-05

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Impact of R&D Expenditure on Pharmaceutical Drug Prices: A Cross-Country Comparison

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Over the past few decades, pharmaceutical spending has been increasing, due in large part to high prices of prescription drugs. In the United States, pharmaceutical manufacturers defend high prices by citing the high costs of research and development, which they

Over the past few decades, pharmaceutical spending has been increasing, due in large part to high prices of prescription drugs. In the United States, pharmaceutical manufacturers defend high prices by citing the high costs of research and development, which they argue spurns innovation and makes up for the high prices paid by consumers. This study seeks to determine the validity of that claim and to fully understand the impact that R&D expenditures have on pharmaceutical drug prices. Employing a fixed effects regression, this study assesses the relationship between per capita R&D expenditure and per capita pharmaceutical spending (a stand-in variable for average drug price) for twelve OECD-member countries over a span of seven years. Holding country and year effects fixed, this regression shows a nearly one to one positive relationship between R&D expenditure and pharmaceutical spending, meaning a one-dollar increase in R&D expenditure increases pharmaceutical spending by around one-dollar as well. This impact, while statistically significant, is not that large, implying that R&D expenditures are not a strong driver of drug prices, contrary to what many pharmaceutical manufacturers argue.

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2018-05

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The Emergence and Evolution of Gendered Products in America

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Gendered products are prevalent in the modern consumer products market. This paper provides historical context for the change in the consumer products market which started as a genderless product market and shifted to a female consumer-centric market reflecting the economic

Gendered products are prevalent in the modern consumer products market. This paper provides historical context for the change in the consumer products market which started as a genderless product market and shifted to a female consumer-centric market reflecting the economic needs of the United States through World War I and II. This female consumer-centric market results from the rise of consumer research and many household products are created to satisfy female consumer preferences. But as the consumer demographics change with more women entering the labor force, the types of products being sold change to appeal to the increasing number of male consumers who begin shopping for themselves. This increase in male products is what leads to the booming men's personal care products market that we see today. With an increase in gendered products, there has also been an increase in the number of backlash companies face for creating specific gendered products. This paper outlines the history of gendered products and the potential future of products in the United States.

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2018-05

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Nudged Towards Rationality: Probability Distortion with and without Expected Value

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This paper analyzes responses to a survey using a modified fourfold pattern of preference to determine if implicit information, once made explicit, is practically significant in nudging irrational decision makers towards more rational decisions. Respondents chose between two scenarios and

This paper analyzes responses to a survey using a modified fourfold pattern of preference to determine if implicit information, once made explicit, is practically significant in nudging irrational decision makers towards more rational decisions. Respondents chose between two scenarios and an option for indifference for each of the four questions from the fourfold pattern with expected value being implicit information. Then respondents were asked familiarity with expected value and given the same four questions again but with the expected value for each scenario then explicitly given. Respondents were asked to give feedback if their answers had changed and if the addition of the explicit information was the reason for that change. Results found the addition of the explicit information in the form of expected value to be practically significant with ~90% of respondents who changed their answers giving that for the reason. In the implicit section of the survey, three out of four of the questions had a response majority of lower expected value answers given compared to the alternative. In the explicit section of the survey, all four questions achieved a response majority of higher expected value answers given compared to the alternative. In moving from the implicit to the explicit section, for each question, the scenario with lower expected value experienced a decrease in percentage of responses, and the scenario with higher expected value and indifference between the scenarios both experienced an increase in percentage of responses.

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2019-05

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Nuclear Power in the US; A Sustainability Investigation

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Is nuclear power sustainable when compared to other energy sources? A truly sustainable energy source provides an environmental benefit, minimizes costs to consumers both socially and economically, and continues to do so in both the short and the long term.

Is nuclear power sustainable when compared to other energy sources? A truly sustainable energy source provides an environmental benefit, minimizes costs to consumers both socially and economically, and continues to do so in both the short and the long term. Taking the zero-carbon nature of nuclear generation as its net environmental benefit, this paper the evaluates the economic and social costs of nuclear power to determine if nuclear power's reputation as "unsustainable" is warranted. The sustainability of nuclear power is evaluated in two main categories. The first part focuses on the economics of nuclear power. There are many preconceived notions regarding nuclear power and its associated industry. This section addresses those notions to determine their validity given recent data. The prevalent types of nuclear plants across the U.S., the economics of the stages of nuclear energy production, and its competitiveness relative to other energy sources are addressed, culminating in an evaluation of its modern economic attractiveness as well as its future economic viability. A sustainability assessment would not be complete without addressing the social costs of an energy source, as a sustainable source must be both economically and socially viable. If it can be established that nuclear power can provide energy at lower rates and at a lower cost in terms of externalities, then it would be considered truly sustainable. To investigate those externalities, the second part of the analysis focuses on the human costs associated with the various stages of nuclear energy production. Those costs are then compared to those of alternatives sources of power, and selected case studies are examined to illustrate the ultimate risks associated with nuclear power operations. By quantifying these aspects and comparing the results to alternatives in the field, a better understanding of nuclear energy technology and its potential is achieved. The reader can then ascertain whether nuclear power's reputation as being "unsustainable" is, or is not, a reputation it deserves.

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2018-05

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Assessing the Economic Prosperity of Persons with Disabilities in American Cities

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We seek a comprehensive measurement for the economic prosperity of persons with disabilities. We survey the current literature and identify the major economic indicators used to describe the socioeconomic standing of persons with disabilities. We then develop a methodology for

We seek a comprehensive measurement for the economic prosperity of persons with disabilities. We survey the current literature and identify the major economic indicators used to describe the socioeconomic standing of persons with disabilities. We then develop a methodology for constructing a statistically valid composite index of these indicators, and build this index using data from the 2014 American Community Survey. Finally, we provide context for further use and development of the index and describe an example application of the index in practice.

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2017-05

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The Impact of the Consumer Price Index on the Insolvency of the Social Security Trust Fund

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Yearly changes in the consumer price index are used to adjust social security benefits in order to keep the purchasing power of social security beneficiaries the same. Currently, social security benefits are adjusted using a fixed-weighted price index that reflects

Yearly changes in the consumer price index are used to adjust social security benefits in order to keep the purchasing power of social security beneficiaries the same. Currently, social security benefits are adjusted using a fixed-weighted price index that reflects the purchasing patterns of workers. However, some believe that a price index that captures the spending habits of the elderly should adjust monthly social security benefits, while others argue that a chain-weighted price index is a more accurate indexation technique. This report finds that if an elderly or chain-weighted price index were implemented this year, there would not be a significant change in the projected insolvency of the social security trust fund, but there could be a substantial decrease in the social security trust fund's yearly cash-flow deficit. Therefore, changing the indexation of social security benefits should not be seen as a short-term solvency fix. Instead, adjusting monthly social security benefits should be about keeping the purchasing power of beneficiaries relatively the same.

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2017-05

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An Analysis of the Motivations Behind Third Party Voting

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In this work we analyze just what makes the topic of third party voting so intriguing to voters and why it is different than voting for one of the major parties in American politics. First, we will discuss briefly the

In this work we analyze just what makes the topic of third party voting so intriguing to voters and why it is different than voting for one of the major parties in American politics. First, we will discuss briefly the history of politics in America and what makes it exciting. Next, we will outline some of the works by other political and economic professionals such as Hotelling, Lichtman and Rietz. Finally, using the framework described beforehand this paper will analyze the different stances that voters, candidates, and others involved in the political process of voting have regarding the topic of third party voting.

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2017-05

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Health Insurance and Mortality Outcomes - Extending Observational Methodologies to the Publicly Insured

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Existing research into the health benefits of insurance fall into two major categories \u2014 observational and experimental. Observational studies have centered on data sets from before 2000 and focus on the mortality differences between the privately insured and the uninsured.

Existing research into the health benefits of insurance fall into two major categories \u2014 observational and experimental. Observational studies have centered on data sets from before 2000 and focus on the mortality differences between the privately insured and the uninsured. Experimental studies began with Massachusetts' 2006 health reform and continued after the passage of the Affordable Care Act. These studies measure the effects of public insurance among the coverage expansion populations. These two bodies of literature come to ambiguous and contradictory conclusions to the mortality effects and health value of insurance. This study extends the observational methodologies to the publicly insured in samples from the National Health and Nutrition Examination Survey in both the 1988-1994 survey and the 2001-2002 survey. Using the Cox Proportional Hazard model, this study estimates the hazard ratios faced by the privately and publicly insured compared to the uninsured. This study finds the publicly insured face hazards 1.5 times those of the uninsured (p<.001), while the privately insured do not face hazards significantly different from those of the uninsured. Literature suggests that some unobserved characteristic of the publicly insured are influencing their mortality. Interacting with participants health reveals that these differences across groups shrink as health declines. Experimental literature suggests that public insurance lowers the uninsured risk from "healthcare amenable" conditions. Treatment of these conditions may explain the hazard reductions among the uninsured in non-excellent health. The high risk of the publicly insured in excellent health defies explanation.

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2018-05