Roanomics
Volume 2, Issue 2 Winter and Spring 2012
Advising tips:
The Economics Program offers a major and a minor If you major in BUAD, there are only five additional courses left to complete the minor in ECON (one of which can count as the BUAD elective) Several of the ECON 200-level courses serve as electives in BUAD concentrations ECON 121 can substitute for an INQ 260
Reaching out
This is our third release of Roanomics and it continues to grow in popularity. Several alumni have sent emails or posted on social networking outlets that they enjoy reading through the newsletter. We are thrilled that Roanomics is catching on in this way. Reconnecting with alumni was one of the purposes of the newsletter. If there is something that you would like to see in the next issue, send an email to roanokeecon@gmail.com Remember that you can keep up to date on the Economics Program between issues of Roanomics by following our blog, kassensroanokeecon.blogspot.c om, which is updated several times a month. See you alumni weekend!
Feature: Advice for 7 2012 Graduates Economics Faculty in the Roanoke 8 Times Travels with Dr. Bob 10
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Chris Kwaramba
Ian Kervick-Jimenez
Chris Zachodzki `09 is in law school at the University of South Carolina. He also is a research assistant for Dr. David Linnan, an intern for the South Carolina Court of Appeals, and National Advisory Team Member for the College to Community Pilot Program at the American Cancer Society. Andrew Streaman `09 is an analyst at JP Morgan Chase SJ Brussard `09 is in Institutional Sales at Rodman & Renshaw Deborah Lindsay `02 is the Vice President of Marketing and Lead-
ership at the Roanoke Regional Chamber of Commerce Remember that Alumni Weekend is April 13-15. Feel free to stop by West Hall to say hello! Fill out the alumni survey at kassensroanokeecon.blogspot.com Have career advice or contacts for our current Economics students? Please send an email to roanokeecon@gmail.com. My overall education at Roanoke College, and particularly my economics education, prepared me for dealing with the extremely varied career and educational experiences I have had throughout my life -Roanoke College alumna `72 Give us your comments by filling out the alumni survey on our blog and maybe they will be included in the next issue of Roanomics!
Marko Krkeljas
Volume 2, Issue 1
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(Blogging in Dr. Kassens Principles course) helped me to become more aware of how economics affects so many different areas [enabled me] to understand how what we were learning in class could tie in to other economic events in our country and worldwide.
Fleming ECON 242 Public Finance Nik-Khah ECON 252 Fed Challenge Crook, Stauffer ECON 267 Labor Economics
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Volume 2, Issue 1
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Presentations
Dr. Alice Louise Kassens Plenary Session, Consumer Sentiment and Price Expectations in Virginia, 2012 Virginia Association of Economists Annual Meeting, Virginia Beach, VA Tiffany Ingram `13 The Management Institute Session on Health Economics, March 2012 Dr. Darshak Patel "An Exploratory Analysis of the Relationship between Student Earnings and Postsecondary Retention" paper with Chris Jepsen (University of Kentucky), Southern Economics Association Annual Meeting, November 2011
Sharham Amini
APS has selected Dr. Kassens research project for the 2012 Franklin Grant. APS was the first learned society in the United States.
Dustin DeMaria Wai Paing ODE Nathan Castellano Chanho Song Ted Ellis
Sara Caudle
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Volume 2, Issue 1
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FEATURE
ADVICE FOR 2012 GRADUATES
A message was sent to alumni and friends asking for advice for the 2012 graduates. Here what they had to say: Make a budget that includes your "mandatory" expenses (student loan payments, rent, utilities, etc.) and try to save at least 1020% of what's leftover after you pay all the necessary bills. Spend less than you earn, do something kind for someone you don't know every day, keep reading and thinking about economics, stay in touch with your alma mater. Rent and have responsible roommates. Use all of your twenties to get degrees. And then stop. The current job market is extremely tough. Don't be afraid to settle for something less in your first fulltime position. Always remember that your first job is rarely going to be your last one. Don't be afraid to take risks early in the career and dont be too narrow minded in terms of the type of job or the type of career you envision yourself in. Focus on building your resume. Although starting out it may not be your ideal job and salary. Focus less on the initial salary and more on how or if the job will benefit you in the long run, and put you a step above other candidates. Make yourself marketable. "Do not use your savings for wants. Savings are for emergencies. Wanting a new car or TV is not an emergency. You all understand the Time Value of Money so use it to your advantage. Make sure your spouse is your best friend. GOOD LUCK SENIORS!
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Dr. Alice Louise Kassens Point in the Roanoke Times
The U.S. labor market looks bleak going into 2012, particularly for older Americans and minorities. The total unemployment rate for the third quarter of 2011 was 9.1%, a reduction of 0.4 points from a year before, but much above the optimal unemployment rate of close to 5.5%. For blacks, the unemployment rate was 16.5%, up modestly from 2010, and is particularly high for blacks ages 20 to 24 (27%). Once blacks lose their job, it takes an average of 47 weeks to find a new one, compared to 41 weeks for the typical American. The average unemployment spell for adults aged 55 to 64 is more than a year compared to 36 weeks for 25- to 34year-olds. Long-term unemployment has severe negative effects on both the economy and the individual. Expenditures for unemployment insurance, Medicaid and other welfare subsidies rise with greater unemployment, while tax revenues fall, adding to our deficit woes. Additionally, the productivity of the unemployed individual is forever lost, reducing national output and income. In addition to lost income, there are substantial indirect costs associated with unemployment, including depression, self-esteem and reduced employability. The longer an individual is out of work, the more his or her skills depreciate. Skill depreciation reduces chances of employment, particularly if competing against those with a shorter unemployment spell. Depression and loss of self-esteem can accelerate skill depreciation, compounding the social costs of unemployment. Going into 2012, the labor force is brimming with individuals, particularly older Americans and blacks, who have been out of work for a year. There is a fear that these individuals, originally unemployed because of the downturn in the economy, will become structurally unemployed. Structural unemployment is due to a mismatch of skills. The skills employers are seeking do not match those of the job seekers. This is a difficult policy issue to address, par-
Roanomics
ticularly when deficit spending would be required to establish additional jobtraining programs. For older Americans, there is an additional worry. A 55year-old experiencing an unemployment spell of a year or more will have little time to work and save for retirement. During the period of job loss, it is likely that savings are depleted to purchase the items typically bought with labor income. Employers will rationally choose to invest in job training for younger workers for whom they have a longer period to recoup their training costs. Financing older Americans' lost retirement savings will be a considerable policy issue in the future. While signs of economic recovery carry us into the New Year, severe labor market troubles continue to lurk and dampen economic growth. Originally in the Roanoke Times as a two part piece on 1/1/2012 http:// blogs.roanoke.com/ roundtable/2012/01/ pointcounterpoint-theeconomy-in-2012/
The average unemploy -ment spell for adults aged 55 to 64 is more than a year compared to 36 weeks for 25 to 34yearolds.
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Dr. Garry Flemings Op-Ed in the Roanoke Times
I agree whole-heartedly with many of the arguments offered by James Case ("A solution to fixing the economy," Feb. 22) regarding the current problems facing the U.S. economy and how to best fix them. Fiscal stimuli, either by increasing government outlays and/or reducing tax rates, have proven to be expensive failures. If deficit spending promoted economic expansion, wouldn't our economy be booming right now after the Bush/ Obama stimulus packages? Couple that with the current monetary stance by the Fed, with historically low interest rates that have also offered little aid except in helping drive up oil prices to more than $100 a barrel, and one must begin to wonder if there is anything the government can do to extricate us from our economic doldrums. Is protectionism the answer? In that regard, I must wholeheartedly disagree with the solution offered by Case to increase import tariffs by as much as 30 percent. As usual, the protectionist argument is based on several fallacies that, on the surface, make it seem like a good idea. Fallacy No. 1: The higher tariffs will leave everything else unchanged. Not true on a couple of fronts. Reducing our imports artificially will cause the dollar to strengthen, making our exports more expensive. As export sales decline, jobs will be lost in these sectors, which are the sectors in which we have advantages with respect to our trading partners. We save jobs in inefficient sectors and lose jobs in efficient ones. There is no net gain in jobs, and the ones we lose are the ones we are best at. Fallacy No. 2: Other countries won't retaliate. Not true. They most likely will. Result: Go back to the Great Depression and revisit the Smoot-Hawley Tariff and its effect on global commerce and how it prolonged the Depression. Rather than expanding international trade and promoting our export sectors, we will withdraw from the global economic community, and our welfare will decline. Fallacy No. 3: Tariffs will lead to expansion in government revenues, reducing the deficit. Not true at least, not in the long run. Because we will import less, a higher tax on a smaller tax base does not necessarily increase revenues. In fact, it is conceivable that tariff revenues may decline as import purchases abate, resulting in a larger budget deficit. Fallacy No. 4: The government can target the tariffs toward the correct goods and countries that deserve the punishment. Again, not true. One area in which the government has shown over and over its weakness has been in picking winners and losers. Do we just hit Chinese imports because we think they are not playing by the rules? Economic principles tell us that government attempts to artificially stimulate the economy are fruitless in the long run, including the use of tariffs and other trade restrictions. If we truly want to fix the economy, the government needs to focus on real factors like education, infrastructure and technology. Initially printed in the Roanoke Times, 3/4/2012 http:// www.roanoke.com/editorials/ commentary/wb/305605
Roanomics
Economic principles tell us that government attempts to artificially stimulate the economy are fruitless in the long run, including the use of tariffs and other trade restrictions.
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Statement from the Economics Club
I am delighted to announce that the SGA has approved the Economics Club of Roanoke College. Since the announcement in the January Economics newsletter, the Club has 24 members, elected officers, and has had a few meetings. Dr. Darshak Patel is serving as the Clubs Advisor, and the officers are Conrad Classen, President, Ted Ellis, Vice President, William Corso, Treasurer, and Charla Henley, Secretary. The revival of the Club ends a 25 year hiatus for an Economics Club at Roanoke. The Economics Club hopes to increase student involvement with extracurricular activities on campus, increase student knowledge of economics outside of class, and provide members the opportunity to apply economics to the real world. An Economics major or minor is not required and all students are welcome to join the Economics Club. As President and founder of the Economics Club, I would like to encourage you to join us and partake in discussions of how you are affected by
Roanomics
the current economy, the economic implications on the job market and how the current economy might affect us both nationally and internationally in the future. We are planning to have speakers, movies and a fantasy stock trading competition. I look forward to seeing you at our next meeting. Sincerely, Conrad Classen President, Economics Club of Roanoke College
Conrad Classen 15
Interested in the Economics Club? Fill out the interest form: FORM 26 students already have!
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Economics Program
221 College Lane Salem, VA 24153 Phone: 540-375-2426 Fax: 540-375-2577 E-mail: roanokeecon@gmail.com
...Because we view economics as solidly within the liberal arts, we are committed to examining the relationship between economics and other areas of knowledge. Students will therefore find it to be an excellent complement to many other majors, including, but not limited to public policy, sociology, history, environmental policy, mathematics, biology, and business administration, as well as concentrations such as gender studies and peace and justice studies. For information about the Economics Program contact Dr. Garry Fleming (fleming@roanoke.edu) For comments or suggestions about the newsletter email roanokeecon@gmail.com Read our blog: kassensroanokeecon.blogspot.com Faculty Editor: Dr. Alice Louise Kassens Student Editor: Sara Caudle 12
Follow us on Twitter @roanokeecon Tell us what is new with you roanokeecon.blogspot.com Join the BUAD/ECON Facebook page
laxed, refreshed and ready to take on the pressures and stress of retirement and I'd like to thank you for your continuing Social Security "contributions " (even though I'm entitled to them). Those funds are a valuable supplement to my travel budget, and I promise to spend them in a responsible fashion.