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Table of Contents

DES ELECTION FOR EXECUTIVE BOARD 14-15—Sunday, April 27th, 2014

Time: 6 PM | Location: TBD

It’s that time of year again! We hope many of you will consider running for the Executive Board. This year we have four open positions that anyone can apply to: Events Director, Information Director, Newsletter Director, and Tutoring Director. Please see more detailed information on page 2 of this newsletter.

CAREERS IN ECONOMICS—Thursday, May 1st, 2014

Time: 6 PM | Location: Gerri C. LeBow Hall, 2nd floor

What can you do with a degree in Economics? Come to the event to learn about potential career paths for economics students. There will be professionals from prestigious companies including Deloitte Consulting, Econsult Solutions, BlackRock, the Federal Reserve of Philadelphia, and more.

3rd ANNUAL WASHING D.C. TRIP—Friday, May 23rd, 2014

Time: Full-day event

25 students will be selected to join Drexel Economics Society in an all-day trip to Washington D.C. during which we will visit the Congressional Budget Office (CBO) and the Federal Reserve Board of Governors. If you are interested in participating in this trip, please email us at drexeleconomics@gmail.com stating your interest as well as your year of graduation and major/minor ASAP.

*Transportation is free of charge for students. *Lunch in D.C. will be provided.

RESEARCH COMPETITION CEREMONY

Date and Time: TBA | Location: TBA

To celebrate the accomplishments of the students who have participated in DES’s Research Competition launched in Winter 2014, Drexel Economics Society will be hosting a ceremony in which the winners will be announced. Please join us in this event to learn more about our students’ research projects.

DES Upcoming Spring Events

DES Upcoming Events P.1

DES E-board Election P.2

Student Spotlights P.3

Students’ Articles National Economy Regional Economy International

Economy Special Topic:

P.4 P.4 P.5 P.6

Economics Tutoring Center

P.7

DES Past Events P.7

Website:

www.drexeleconomicssociety.com

Facebook: www.facebook.com/DrexelEconomicsSociety

Email:

drexeleconomics@gmail.com

CONTACT US

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DES Election for Executive Board 2014-2015

Descriptions of Opening Positions for DES Executives 14-15

Events Director

The Events Director (ED) manages our event planning process. The ED is responsible for reserving a space to hold each event through the Drexel event services system, creating an event flier, and coordinating flier distribution. The ED is also responsible for physical outreach to economics students (i.e. arranging classroom visits to promote events) and seeking Economics faculty to promote events. Lastly, the ED should attempt to coordinate with similar societies at other universities to negotiate joint events and increase attendance.

Information Director

The Information Director (ID) manages publicity and information technology for DES. The goals and responsibilities of the ID are threefold: outreach, engagement, and maintenance. • Outreach: the ID must maintain social media sites and build audience, along with manage the website (www.drexeleconomicssociety.com); • Engagement: the ID is responsible for fostering conversation with DES membership through social media (i.e. posting interesting articles about current events in economics, etc.) and marketing events through social media; • Maintenance: the ID maintains the back-end of DES technology.

Newsletter Director

The Newsletter Director (ND) is responsible for producing the quarterly (Fall, Winter, and Spring quarters only) Drexel Economics Society Newsletter. The ND will coordinate a team of writers for the “in the news” section, which features articles written by members of DES. The ND will work closely with the DES Faculty Advisor to develop the “Faculty & Student Spotlight” section. The ND coordinates with the DES President to complete final edits and ensure a timely rollout. The ND also coordinates with the Information Director to post newsletters to the DES website and social media outlets, and with the Secretary who then sends the newsletter to the DES membership.

Tutoring Director

The Tutoring Director (TD) serves as the liaison between economics tutors and administration (LeBow Undergraduate Services, School of Economics, etc.). The TD is responsible for creating the Economics Tutoring Hub’s schedule each quarter and will meet quarterly with administration to discuss the Economics Tutoring Hub’s performance. The TD is responsible for recruiting new tutors (through DES marketing), ensuring that the Hub is well staffed, and reporting Hub usage. The TD is also required to serve 3.0 hours per week at the Economics Tutoring Hub. Because of this component, the TD must have at least a 3.5 cumulative GPA and must have completed ECON 301, 321, and 350 by the beginning of the 2014 fall quarter.

It’s that time of year again and we are hoping you guys will join us on the Executive Board as we continue to bring interesting economic topics and job and networking opportunities to the Drexel campus.

Elections are open to all undergraduate, full-time students. To apply for a position, students must complete the application form and submit an one-page resume to info@drexeleconomicssociety.com.

All applications are due Wednesday, April 25th via email. Elections will be held on Sunday, April 27th from 6-9pm (location TBD). Students must be able to attend the elections (either in person or via Skype) for a short interview with the 2013-2014 DES Executive Board.

This year we have four open positions that anyone can apply to. The descriptions for these positions are given below.

QUESTIONS? Don’t hesitate to contact us at: info@drexeleconomicssociety.com.

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Student Spotlights Shaan Desai Senior Shaan Desai wanted to become a physician ever since he was a child. However, after his father forced him to read The Economist, Shaan developed a strong interest for economics in his early adolescence. He was inspired to pursue his interests in economics and medicine after writing a research paper on the health and economic implications of the Affordable Care Act in high school. By pursuing a major in economics and completing the prerequisites for medical school, he hoped that this integrated approach would be beneficial for a career in health care. As with many college students, however, different opportunities became available. He helped to build a technology startup that was supported by the Baiada Center in his sophomore year. In his junior year, he not only studied abroad in Istanbul but also completed a co-op at Goldman Sachs in San Francisco.

In his free time, Shaan volunteers in various contexts related to health and economics. He serves as a volunteer at St. Christopher's Hospital for Children and Rebuilding Together Philadelphia. As a part of Drexel Economics Society, he is an active board member and an economics tutor. Shaan will join Goldman Sachs as a Financial Analyst in their Private Wealth Management Group after graduation. He still considers medical school as an option for his long-term plans.

Throughout his career at Drexel, Shaan has appreciated the advice from all of his professors from the School of Economics. However, he wants to recognize Professor Airaudo for his advice and recommendation when it came to studying abroad and the co-op. Additionally, he would like to recognize the coordinated efforts of Tony Grangel, his academic adviser, and Tom Coyne, his pre-health adviser, for helping him navigate this unusual academic path.

Eric Horton Eric Horton is a graduating senior in the School of Economics. Originally a philosophy major, Eric became interested in economics after studying classical texts on political economy. He eventually switched majors because he found the quantitative aspect of economics to be a refreshing way to analyze social phenomena.

Since beginning his new course of study, Eric has been active in economics-related organizations on Drexel’s campus. He is currently the treasurer of the Drexel Economics Society and can frequently be found tutoring students in economics in the LeBow Undergraduate Advising Office. Eric is also a member of Omicron Delta Epsilon, an international economics honors society. In addition to his academic endeavors, Eric plays the viola and has performed with a number of musical groups around the Philadelphia area. He is also the Librarian for the Drexel University Orchestra and occasionally tutors in music theory.

Following graduation, Eric will begin working as a Research Assistant at the Board of Governors of the Federal Reserve System. As a member of the Board’s Monetary and Financial Market Analysis section, he will assist in analyzing macroeconomic and financial issues related to the implementation of monetary policy. Eric eventually hopes to attend graduate school in order to pursue a career in research. He is grateful to Dr. Laincz and Dr. Amato (of the philosophy department) for exposing him to work in research and credits Dr. Olivero and Dr. Airaudo with piquing his interest in macroeconomic topics.

Shaan H. Desai

Eric Horton

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Regional Economy

This article originally was to be about the economic impact of the potential Pope visit to Philadelphia next year. Mayor Nutter Governor Corbett and staff members were at the Vatican to ask if Pope Francis will fulfill the promise that Pope Benedict XVI made before stepping down. This promise was that Philadelphia would be the first U.S. city to host the World Meeting of Families. The Inquirer reported what seems to be a back of the napkin estimate, claiming that over 1 million people would come to Philadelphia if the Pope decided to attend. This got me thinking about the economic impact of that 1 million people on the city of Philadelphia.

After some research into Philadelphia tourism to see what a one-off event like a visit from the Pope may produce, I quickly learned that Philadelphia rarely has one-off events. And, if there is a one-time event, it most certainly gets replaced by another event the next year. With a bit of research, one could make a fairly strong argument for Philadelphia’s recent economic development being highly influenced by the growth in the city’s tourism. From 1997 to 2012 the amount of people coming to Philadelphia for overnight business grew by 50%, and the growth for overnight leisure was even more at 80%. A 2012 measure by Quantcast, a digital advertising company, ranked visitphilly.com as the most visited destination website above famed destinations like Los

Baseball may be America’s national pastime, but the NFL is America’s game. Every single year, the TV viewership for NFL games continually dwarfs that of any other sport. For instance, in 2013 a regular season NFL game between the Washington Redskins and Dallas Cowboys managed to attract 19.6 million viewers (Melewski, 2013). On another network, at the same time, 8.3 million Americans were tuning in to watch the American League Championship Series. The NFL’s irrefutable domination of American television viewership is integral to their immensely profitable business model.

Because of the short schedule, 16 games per season, NFL teams cannot rely on ticket sales to sustain their profits. This realization has led many owners to recognize the importance of branding and advertising to supplement their lackluster stadium revenues. Jerry Jones, while being an oft derided general manager, is an undeniably talented businessman. Jones bought the Dallas Cowboys in 1989 for $140 million dollars and immediately went to work transforming the franchise. Through an aggressive merchandising campaign, media exposure and a $1.3 billion dollar stadium, the value of the Dallas Cowboys franchise has appreciated to $2.1 billion dollars (Badenhausen, 2013). Adjusting for inflation, that’s a 700% appreciation over Jones’ ownership. Jerry Jones demonstrated an NFL franchise is not just a team, but an investment vehicle.

But Jones and the Cowboys are just one of the 32 NFL franchises. Each franchise strives to increase their individual value, and this causes the total value of the league to rise. The NFL managed to rake in $9 billion dollars in revenue in 2013, making it the most lucrative sports league in the world (Burke, 2013). For comparison, Fortune 500 companies such as BlackRock and Motorola Solutions have similar revenue levels. The NFL is able to maintain their revenue stream through the combined efforts of 32 teams. The Philadelphia Eagles and New York Giants have a historically brutal rivalry, yet they work in tandem to increase the overall value of the league. Every newspaper column and ESPN headline about their rivalry helps to spread each team’s sphere of influence. The bitterest rivals in the NFL are, at the end of the day, business partners.

*Reference sources are available on DES’s website.

National Economy America’s Most Profitable Pastime By Ryan Kirk

By Douglas Hammond

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Angeles, Chicago, and New York. And, I think no one would argue that Philadelphia's art scene has become one of the best in the nation if not one of the best in the world. Art is the reason Philadelphia placed fourth on the “Top U.S. 10 Destinations for 2013” by Lonely Planet claims The Greater Philadelphia Tourism Marketing Corporation (GPTMC).

I’m unsure whether it is the chicken or the egg in this process. But, what it impressive nonetheless is Philadelphia's ability to both host events and then secure the hosting of these same events in the future. For example, the U.S. Open, the most prestigious and largest squash tournament in the nation, has been hosted at Drexel University for the past three years. Furthermore, the U.S. Squash Association signed a deal with Drexel to continue hosting the tournament through 2023. The president and CEO of U.S. Squash, Kevin Klipstein, intends to make the U.S. Open a "premier global sports event, hosted right here in Philadelphia."

On the topic of sports, Philadelphia will play host to five NCAA Championships just over the next three years. Yes, you read that correctly –championships; and this city is hosting five of them! These championships are in men's ice hockey, men's and women's lacrosse, and men's soccer. Not to mention, last years NCAA men's basketball rounds two and three were held by Temple University at Wells Fargo Center. The list goes on, with the Collegiate Rugby Championship being held at PPL Park for the past three years to the 85 out of 114 Army-Navy football games played at Lincoln Financial Field.

So let us go back to Pope Francis. The question is no longer if he will come to Philadelphia next year, but rather how many more times after that will he visit us. And, how long and how frequently will the 1 million visitors he brings be in the city? I think it is safe to assume they will be here long and often, because by now it is no surprise that Philadelphia has experienced record numbers in tourism. What will be the economic impact of the 1 million additional visitors? Well, in 2012 the economic impact of the industry totaled $9.75 billion, and that was just from the 38.8 million domestic visitors that came to the city. This impact grew by 4.5 percent from the year before, and it is responsible for supporting around 89 thousand jobs in the Greater Philadelphia Area. Now, as Philadelphians we already know how great this city is. So, it’s satisfying to see visitors experiencing the same desire to stay in the city of brotherly love for as long as possible.

*Reference sources are available on DES’s website.

By Khoi Nguyen

Recently, Russia has been temporary kicked out of G8 as the EU and the US are punishing for its military act over Crimea. As a result, people are concerning that in the end, how much the cost will be for both parties

Russia is threatening the Western using its gas supply line. At the moment, 30% of the EU gas supply comes from Russia while around 50% of Russia’s total budget revenue comes from oil and gas. A reduction of gas export would have a negative impact on Russian GDP growth if Gazprom cut down the supply and raise the gas price to threaten the EU. Russian GDP is projected by Russian economists to be as low as 1.0% in the future. Moreover, if Putin decided to cut off the gas through Ukraine, in a short-run, many EU nations would have energy problem. Old Soviet countries and other nations such as Germany, Greece and Finland are relying on as much as 80% of gas supply line via Ukraine. In spite of this threat, the EU is trying to diversify its gas supply at a high cost. On the other hand, the EU has a great gas reservation and the EU also imports cheap gas from US. Overall, the EU has a standing point against Russia in a gas war.

Sanctions effects are unevenly distributed across its members and depend on the type of sanctions. For example, a sanction targeting Russian financial asset has more impact on the countries in the east, from Finland to Greece. For Russia, 15% of its GDP comes from its export with the EU, so a sanction on export goods will attack on its GDP as well as countries like France, Germany and Italy, who export luxury goods to Russia. Russia is the third biggest trade partner with the EU as it consumes the EU’s luxury goods and warships. If sanction targets on trade, EU business such as luxury cars and ships will have a decline in profit.

International Economy Crimea: Is it worth the effort?

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In addition, as investors are scared of having their assets freeze outside the country, they are withdrawing money from both markets. The decline of foreign direct investment is hurting both Russian economy and European business. However, the EU is the biggest trade partner for Russia as 75% of Foreign Direct Investment stock in Russia comes from the EU. As mentioned before, Russia is not the biggest trade partner for EU; therefore, Russia economy will suffer more than the EU. Russia’s Central Bank

Indeed, no matter which country would win, people living between Russia and the EU are the most vulnerable.

*Reference sources are available on DES’s website.

The Ukraine crisis and its repercussions on the global economy, especially Russia’s, has taken the center stage in the international news. It seems like the state of the economies in other regions has been underreported. This year is pivotal for the economy of Japan and future defining for the economy of China which is not stressed enough in the media.

Japan

The economy of Japan has changed drastically since Shinzo Abe became the prime minister in late 2012. The main pillars of Abe’s plan dubbed Abenomics were fiscal stimulus and monetary easing that eventually should increase private investment. So far Abenomics has had mixed effects. Since 2012 and by the end of 2013 Japan’s stock market index NIKKEI 225 increased by 85%, i. e. private investment went up significantly. On the other hand, the yen’s value dropped on the global exchange market. The decrease in the value of yen against the US dollar by 40 % since late 2012 resulted in the decrease in imports and the trade deficit. There is another test coming for the Abenomics. On April 1st the consumption tax is going to increase from 5% to 8%. The tax increase will lower aggregate consumption which in turn will diminish the GDP growth. Mr. Abe is confident that another round of monetary easing will stimulate consumption and reverse the economy again. We are yet to see whether he is right or not.

China

The second biggest economy in the world is experiencing a slowdown, according to the data for the first quarter of 2014. Aggregate consumption was not strong enough to be sure that GDP growth in 2014 will hit the target of 7.5%. For the past 22 years China’s real GDP has been growing by more than 7.5% annually. To keep that trend Chinese government is pushed to provide stimulus may it be fiscal or monetary. As of March 20th it has not announced that a stimulus package will be provided. Chinas’ economists hope that the vast urbanization project, which is supposed to increase the urban population from 53% to 60% by 2020, will start to have a positive effect on demand and aggregate investment now. The outlook for the Chinese economy in 2014 is bright as even in the worst case scenario the economy is predicted by Societe Generale to grow by 7.2% and is expected to have 10 million new jobs created.

*Reference sources are available on DES’s website.

By Koba Khitalishvili

International Economy Japan and China

Special Topic: The Economics of Higher Learning By Francisco Goncalves

There is a stigma in our society and it is getting worse as the years pass. “You have to go to college, what else are you going to do?” It is ingrained in our minds that pieces of paper, albeit thicker and more ornately designed than most, are what decide if we have any value to employers: not what kind of person we are, how

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well we can do things, follow directions, problem solve, multitask, perform under pressure. It is just a piece of paper, a “degree,” that matters. Get it, and all your problems will be solved! Yay! Too bad it doesn’t work that way.

With college costing more than ever before, does it make sense for the vast majority of prospective students to attend school anymore? On average, a full-time worker with a bachelor’s degree will make an average of 84% more income than a high school graduate over their lifetimes. On the flip side, a degree and living expenses over four years at Drexel cost an average of $208,040. Additionally, these prices are rising and aren’t expected to go down anytime soon. “But, the government is giving me a subsidy to help me pay for college, why should I turn that down?” Partly because these subsidies are greatly an artificially inflated demand and allowing for college to charge higher prices. More subsidies, higher demand, higher prices.

“Okay, the economics is all good and well, but if I don’t go to school I won’t get a good job!” Is college really necessary, though, for many jobs? Can’t skills that employers are looking for be honed on your own, or through cheaper means? Why is it that we must spend thousands on college when a cheaper, more practical education may be easily obtained from a different place? As many students coming off Co-op will tell you, “The company teaches you most of what you need to know.” Why must our society perpetuate this hunger for an education that is often unnecessary and economically inefficient? Maybe because it lines so many people’s pockets at the end of the day. Maybe it’s because we are too lazy to pull ourselves up on our own strength into a better life. At the end of the day, though, it will be decided by the blind eye of the merciless, eternal machine of the job market.

*Reference sources are available on DES’s website.

Economics Tutoring Center Struggling with your economics courses? Come to the Economics Tutoring Center to get help with concepts,

homework, and problems. Qualified Economics students serve as tutors for all undergraduate economics courses, free

of charge! Tutoring takes place in the Advising Center, 3rd Floor, Gerri C. LeBow Hall from Monday through Friday

except final exam week.

TUTORING HOURS

WANT TO BE A TUTOR?

Great grades and passionate about economics? Interested in becoming an Economics Tutor? Send us your resume and

unofficial transcripts to be considered for a tutoring position: info@drexeleconomicssociety.com

ECON Monday Tuesday Wednesday Thursday Friday

All sections 9 a.m.—1 p.m. 1—5 p.m. 2—6 p.m. 1—5 p.m. 9 a.m.—12 p.m.

DES’s Past Event in Winter 13-14 The full content of this newsletter is also available at http://www.drexeleconomicssociety.com/newsletter/ Sign up to receive DES’s e-Newsletter today at http://eepurl.com/Dw8BP