MICROECONOMICS

1. A Failure of Automatic Market Adjustment: a case of the American hog market
   "Lean Times on the Farm," Time, January 11, 1999

   Economic theory asserts that under normal conditions, price and output of a good are always adjusted automatically by "an invisible hand" to an equilibrium position (i.e., once reached, there will be no further changes). If supply increases, price declines.  more >>

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2. Contribution of the computer industry to the modern economy and the New Economy
   "The New Meaning of New Economy," New York Times, October 8, 2001

   Technological innovation is the engine of economic growth. Greatly impressed by the large array of spectacular technological innovations of the computer industry in recent years, economists coined a new phrase known as the "new economy." The new economy refers to the enormous power of computer technology, such as the Internet and web sites, to advance and transform the existing economy.  more >>

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3. Does the stock market reflect or influence the U.S. economy?
   "This time it's different," Time , January 8, 2001

   In the past, a relatively small segment of wealthy Americans owned stocks for the purpose of long-term investments. Nowadays, however, 49% of American households hold stocks either directly or indirectly through mutual funds or retirement accounts. Some people trade stocks often for short-term profits.  more >>

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4. The impacts of a steep decline in technology stocks
   "Requiem for a Cheerleader: Silicon Alley Magazine is dead," New York Times, October 8, 2001.

   In 1999, a high-tech magazine took a portrait of a group of executives in the computer industry, whose combined net worth was then around $30 to $40 billion. In year 2001, their net worth was slashed by tenfold to $3 to $4 billion due to the precipitous decline in computer stocks. Most of these former executives quit their jobs or dissolved their companies for financial reasons.  more >>

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