Webtagr - Technology News Summarizer

US Trade Deficit: A Tale of Saving and Investment

2025-05-20

The persistent US trade deficit isn't simply due to insufficient exports; it's fundamentally linked to a macroeconomic imbalance. The article uses national accounting to demonstrate the equivalence between the trade deficit and the gap between domestic saving and investment spending. Analyzing household, business, and government savings, it shows how their interplay affects the overall saving rate. The author argues that while trade policies like free trade agreements or industrial policy can influence trade composition, they won't solve the deficit unless they also address the saving-investment gap. Closing this gap, however, presents a significant challenge.

(libertystreeteconomics.newyorkfed.org)

Misc saving

When College Might Not Be Worth It: A Cost-Benefit Analysis

2025-04-16

A recent study by the Federal Reserve Bank of New York reveals that while a college degree typically yields a healthy 12-13% return on investment, this isn't true for everyone. Factors such as high tuition costs, extended graduation timelines, and major choice significantly impact the return. The study analyzes various scenarios, including high living expenses, lack of financial aid, and extended schooling, all of which reduce the return. Furthermore, at least a quarter of graduates don't see sufficient economic benefits from college, and major choice heavily influences income, with STEM fields generally outperforming humanities.

(libertystreeteconomics.newyorkfed.org)

Misc college education major choice

Peak Demand: A Seismic Shift in Global Oil Markets

2025-04-14

This New York Fed article explores a pivotal shift in global oil markets. The once-prominent 'peak oil' theory, predicting declining oil production, was overturned by the shale revolution. Now, a new 'peak demand' narrative suggests that the rise of EVs and other low-carbon technologies will flatten and eventually decrease global oil consumption. This transforms the market into a zero-sum game, where production growth in one region lowers prices, squeezing out higher-cost producers elsewhere. The article analyzes the adaptability of US shale producers and the impact of EV adoption, noting that while some agencies predict peak oil demand around 2030, others foresee continued growth. Ultimately, global oil markets are transitioning from supply-driven to demand-driven dynamics, with profound implications for the global economy and energy landscape.

(libertystreeteconomics.newyorkfed.org)

Tech oil demand shale oil

The Mystery of High Credit Card Interest Rates: It's More Than Just Defaults

2025-04-01

Why are US credit card interest rates so high? A study of 330 million credit card accounts reveals the answer: while default losses contribute, high rates also reflect undiversifiable downside risk during economic downturns, significant pricing power of credit card banks, and substantial operating expenses (especially marketing). Even the highest-credit-score borrowers pay spreads far exceeding other loan products, indicating a systemic default risk premium baked into rates, coupled with the high costs of running and marketing credit card businesses.

(libertystreeteconomics.newyorkfed.org)

Tech credit cards interest rates