Economics of Higher Education

Two Interesting Articles from Bloomberg’s Virginia Postrel:

Choice of College Majors

http://www.bloomberg.com/news/2012-01-06/postrel-how-art-history-majors-power-the-u-s-.html

Distortionary Effects of Federal Student Aid Programs

http://www.bloomberg.com/news/2011-12-09/u-s-universities-feast-on-federal-student-aid-virginia-postrel.html

Investment Advice for 2012 and Beyond

Burton Malkiel (author of “A Random Walk Down Wall Street”) offers investment advice for 2012 and beyond in his WSJ op-ed. His main recommendation:

“Emerging markets offer the best prospects for both equity and bond returns over the next 10 years. A number of fundamental factors favor the emerging economies. While Europe and the U.S. struggle with debt-to-GDP ratios of 100% or more—and Japan's ratio is 250%—the fiscal balances of the emerging economies are generally favorable, and debt ratios are low. Low debt levels encourage economic growth.

Demography also favors the emerging economies. Dependency ratios (nonworking age to working age population) are far more favorable in emerging markets. Soon Japan will have as many nonworkers as workers, and Europe and the U.S. are not far behind. Emerging markets, such as India and Brazil, will continue to have two to three workers for every nonworker. Even China, with its one-child policy, will have favorable demographics and a large potential labor force until at least 2025. Countries with younger populations tend to grow faster.”

Economic Challenges Facing the US

David Brooks Column:

http://www.nytimes.com/2011/12/27/opinion/brooks-midlife-crisis-economics.html

US-China R&D Race:

http://www.nytimes.com/2012/01/01/magazine/adam-davidson-china-threat.html

Rise of Brazil and China

Brazil Overtakes Britain

http://www.bbc.co.uk/news/business-16332115

Update: Florida Benefits from Brazilian Boom

According to a NYTIMES piece:

“American Airlines now has 52 flights a week to Miami from five cities in Brazil, and has applied for more routes. Because it receives the highest number of visitors from Brazil, Florida has benefited most from the country’s new wealth and the expansion of its middle class. Most of the Brazilians who come to the United States visit Florida, and in the first nine months of this year, an estimated 1.1 million Brazilians spent $1.6 billion in the state, an increase of nearly 60 percent from the previous year. Among foreign nations, only Canada sends more visitors to Florida.”

Rise of the Renminbi Continues:

http://www.bloomberg.com/news/2011-12-25/china-japan-to-promote-direct-trading-of-currencies-to-cut-company-costs.html

Who Creates US Jobs?

According to an interesting new study of top VC backed firms:

“Among those with immigrant founders are Silicon Valley darlings like textbook-rental start-up Chegg, online dating service Zoosk, and online craft marketplace Etsy. The most common country of origin for immigrant founders from the top 50 firms was India, followed by Israel and Canada.”

Was 2011 an Unusually Volatile Year for Equities?

As the following video explains, US equity markets were not all that volatile in 2011:
http://video.ft.com/v/1340458136001/Look-back-in-anguish

India's Silicon Valley Evolves

Rise of Tech Entrepreneurism in Bangalore

http://www.bbc.co.uk/news/business-15814537