For a sport that’s only been around for 10 years or less, competitive gaming is already turning into a lucrative field.

A Business Insider report released in March of this year shows that $800 million will be made on eSports in 2020. That doesn’t include media broadcasting rights, which, if included, are estimated at $1.5 billion.

This year eSports raked in about $700 million and Goldman Sachs has it growing at 22% per year.

For comparison, the National Football League made about $13 billion in the 2015-2016 season. That’s roughly 13 times more than what eSports is making now, but it’s hard to compare eSports to the NFL because it isn’t as much of an established brand.

This year, eSports has about 400 million viewers. Last year, the NFL had about 18 million views per game during the regular season, which adds up to 4.3 billion viewers.

But the NFL has seen a drop in viewers over the past couple of years, while eSports has seen a steady increase. The purpose of comparing these two sports helps add context to the numbers. Even though eSports is growing it won’t take over NFL viewership anytime soon.

You may ask yourself, how do people playing video games competitively generate millions in revenue? One, the popularity is immense. The finals for the popular game League of Legends sold out the Staples Center. Two, companies can sponsor players and teams which helps generate revenue. And finally, selling media licensing to broadcast games is very profitable, and will likely even be more profitable once media companies realize the sport’s popularity.

The majority of the people who consume eSports are young and view almost all content digitally. Getting advertisements to that demographic is no problem, but getting them to respond to it is another story.

A lot of companies are already looking at entering the space. Twitch, a platform primarily used for people to stream themselves playing video games but also used for eSports, was purchased by Amazon in 2014. ESPN has an eSports vertical on their site. YouTube has their own gaming section.

There are unique ways that eSports can be monetized so it will be interesting to see how this medium will grow in the future.

Equifax –– Addressing the Facts

It’s no surprise that hundreds of millions of people are frustrated with Equifax after one of the largest security breaches. And, let’s be honest, many Americans must have saw it coming considering the numerous hacks we have had recently. Hackers found a “vulnerability” in Equifax’s site leading them to retrieve a sufficient amount of Americans most crucial information – social security numbers, credit card data, identity (The Economist, 2017). Because Equifax is amongst one of the largest CRAs, the breach ended up affecting all three of the big players – Equifax, Experian and Trans Union. What goes up, must come down.

The Economist is calling it an “Equifailure” and we could not agree more. Talk about an incredible fall in share prices, taking about a 15% dip after TransUnion, Equifax, and Experian stocks were on a stable, upwards spiral that showed growth in price from January 2017 to May 2017 (The Economist, 2017). Not only are we looking at a huge loss in the market, but a huge risk for millions of Americans. This poses the danger of identity theft and the potential for the government to have to cover the losses. And to make matters even worse, Equifax employees sold shares of the company when they heard about the breach and didn’t even notify the public until weeks later. We don’t like the sound of that.

The big question is why are they still allowed to store people’s data? Wouldn’t you think that after numerous hacks they would be able to re-locate people’s most important data, or at least protect it? As one of the biggest credit holding agencies, Equifax should not be easily hacked. The issue, however, is that it is extremely “central to the American financial system.” That means that nothing can be done to fix the issue and Equifax will just keep going on as if nothing happened in the future and keep storing data even if we don’t know about it. To make matters worse, it is regulated by the Federal Trade Commission and Consumer Financial Protection Bureau, and they aren’t even choosing to halt business (The New York Times, 2017). The real question is why not? Do they not think it is a monetary concern by any means? The employees of Equifax knew what they were doing when they each sold their stake and ended up 2 million dollars richer, while the losses of millions of Americans, frozen credit accounts, and stolen identities leaves them with nothing but fear and financial burden.

Let’s examine a CRA further to understand why our data will continue to live on and potentially, get hacked again. First of all, it is regulated by some of the biggest economic players –– each federal agency regulator is detailed in the photo below (this photo keeps uploading as low-res but the regulators are the OCC, the FRS, the FDIC, and OTS)

There is a lot of power attached to a CRA. If that power wants a CRA to continue, it will, especially if it is helping the economy. Beyond these federal agencies, CNN explains that the market can’t fix this either. “Markets can’t fix this because buyers choose between sellers, and sellers compete for buyers. In case you didn’t notice, you’re not Equifax’s customer. You’re its product.” (CNN, 2017). This hack was the result of millions of Americans valuable information, in which Equifax is in the business of ‘selling’ that valuable information. Our information is out there, and it’s only a matter of time (if not already) until it is completely exposed and stolen. The only solution is government involvement, but to the government this is not a big enough issue, or an issue that they need to take care of because it happens in data security a lot. Beyond that, so many people are choosing to complain to Equifax when the real entity that needs to step in is the government. Currently, though, there is not the proper data to support the government’s involvement in this hack and Equifax, and other CRAs will continue to “collect and sell our data [because] don’t need to keep it secure in order to maintain their market share. They don’t have to answer to us, their products” (CNN, 2017). Let’s continue to be weary of the information we share especially when it comes to CRAs. We never know what can happen.

The Case of the Fed

The Case of the Fed

The U.S. Federal Reserve is set to announce a multi-year plan tomorrow to shrink its balance sheet of $4.5-trillion of assets, which are amassed from series of Quantitative Easing following the 2008 financial crisis. The process will start gradually, depending on housing arrangement and refinance, according to The Economist.

In the latest issue of The Economist, an article titled “Dangerously Vacant” suggests that Trump should reappoint Janet Yellen to be the Chair of the Board of Governors of the Federal Reserve System. Yellen’s term as Chair will end in February, which means that four of the 12 seats of the FOMC, the Fed’s committee that sets interest rates, will be vacant. The article argued for the reappointment of Yellen because it would provide efficiency for future directions and make the vacant posts easier to fill. The Fed’s future tasks will be tricky, according to the article. The Fed will focus on reversing the effects of quantitative easing and to solve the puzzle of why low unemployment has not juiced up inflation.


In the classic Keynesian structure of macroeconomics, monetary policy is the wheel that pushes the economy forward in times of recession. In a Global economy, Keynesian policies seem problematic. The Fed’s policy will send a signal to Central Banks worldwide, leading to simultaneous shrinking.


What exactly does this new cycle mean to the Global Economy? To understand this, we must start by looking into the effects of QE. One hypothesis is that QE can bring down long term interest rates, and thus increasing investment. But skeptics argue that it’s a game of managing trader’s expectations for short-term rates and the extension of which produces money, i.e, money producing money. If this scenario is true, then there will be no guarantee of a bright economical future due to the fact that what moves money around is not products but blind optimism. Claudio Borio, an economist in Bank of International Settlements, said on Financial Times that bonds and equity prices are beyond their fundamental values, and thus they could struggle to repay when rates rise. Moreover, amid this huge bubble of pure guesswork and hyperbole of values, companies are less likely to increase investment because of a small margin of error. Thus, Central Banks will have to decide to get rid of QEs, and the time for the Fed is now.

Exactly what is “faith in the economy” triggers my curiosity. It seems that the economy right now is “the blind led by the blind”—no one knows what’s going on so why not just follow the trend. The cause is that all previous economic models have failed to articulate an efficient model for a global economy, perhaps it’s because no central banks want their respective countries to give way to other country. We don’t even know what does a global economy mean, because there are too many secret deals between different forces and there seem to be no higher authority to regulate people’s greed when one can simply refuse to acknowledge one’s greed and irrationality. The mentality is that in the modern Capitalist society, for one to be successful, one must possess a certain kind of “animal spirit” that can transcend our mortality and justify our dimmed past. This explains why sales of Ayn Rand’s Atlas Shrugged increased dramatically during 2009, once climbing to the top of Amazon’s fiction bestsellers in April, 2009. Alan Greenspan admired the book and even defended the book as “celebration of life and happiness”; popular TV shows such as Mad Men also has significant resemblances to Randian ideals. However, despite its seemingly irresistible attractiveness among all social classes, Randian ideals is never successful when applied to monetary policies. Maybe it’s useful in a modern individualist society for one to build an indifferent and strong attitude to “create”, but I would argue against it. If one recalls the classical Greek way of thinking, it would be easy to dissolve the doubt. Aristotle put it nicely in Politics, “as man is the best animals when perfected, so he is the worst when separated from law and justice. For injustice is most dangerous when it is armed; and man, armed by nature with good sense and virtue, may use them for entirely opposite ends. Therefore, when he is without virtue, man is the most unscrupulous and savage of the animals.”


More on the issue:,,,



Learning economics is a difficult undertaking for students like myself. Unlike biology or mathematics, economics is not tangible or easy to visualize. Even its definition–the study of scarcity–leaves me puzzled about the nature of economics as a field of study.

However, Uber, a global ridehailing service, is an economics student’s saving grace. Uber’s market is an ideal for what we want the economy to look like. It has characteristics of a competitive market: low barriers for entry, many buyers and sellers, and somewhat homogenous services. Most importantly, the prices riders pay are a direct response to supply and demand. Uber is an excellent example with which to apply numerous economic terms and theories.

Take, for example, consumer surplus. According to Britannica, consumer surplus is “the difference between the price a consumer pays for an item, and the price he would be willing to pay rather than do without it.” It’s a number that has been impossible to estimate in the real world (unless you are a fan of the Infinite Universe theory) until now. Steven Levitt, an economist at the University of Chicago, was able to estimate a consumer surplus measurement using Uber’s data, which collects information about completed trips and those that were considered (user opened the app) but never taken.

On Freakonomics’ podcast from September 7, 2016, Levitt explains that even though Uber has an algorithm to come up with the ideal prices of surged rides, the company instead only multiplies the cost by tenths (1.1, 1.2, 1.3) for customer convenience. This series of minute discontinuities allows for the estimation of the price-sensitivity of Uber riders.

Now, what is price sensitivity? In Greg Ip’s The Undercover Economist, he explains the concept: “when I raise the price, how much do my sales fall? And when I cut the price, how much do my sales rise?” So, it’s the extent to which the price of something affects if a person will buy it.

Levitt examined Uber’s database of many similar consumers facing incrementally different prices to examine the price sensitivity of the riders (at what price will they leave the app instead of booking a ride). Levitt also used this data to estimate Uber’s consumer surplus. He extrapolated that in 2015 the consumer surplus in the United States was $7 billion, which means that riders were willing to spend $11 billion on rides, but in reality only paid $4 billion.

The “Regression Discontinuity Analysis” that Levitt used to estimate consumer surplus can also be used to illustrate a real-life example of the demand curve. Britannica explains that the Demand Curve is a graph illustrating the relationship between price and quantity. The curve slopes downward from left to right because price and quantity are inversely related. It’s an artificial construct that economists use to examine real-world situations. But once again, Uber can be of assistance. Uber’s price surging data, all of the small jumps in price faced by similar consumers, can be added together to discover an instantaneous demand curve. When there is no surge, the price of rides is average and so is the amount of drivers. As an oversimplification it can be noted that demand is at equilibrium. When surges occur, prices go up and and the amount of drivers available declines, so demand is high.

Uber has been in the news a hundred times over for all of its scandals and controversies. But Uber deserves more positive press–it led me to pass my econ quiz!





The Effects of Hurricane Harvey on the National Economy

The devastation of Hurricane Harvey on Houston, the 4th largest city in the United States, has been predicted to negatively impact national activity and employment, according to Chad Moutray, chief economist for the National Association of Manufacturers.

The damaging effects of Hurricane Harvey left physical scars on Texas, and to an extent, a few bruises to the national economy. While some can argue that huge widespread events actually spur economic re-structuring, the Federal Reserve reported that industrial production decreased by nearly 1% In August from July. To put this number to scale—this decline was akin to that during the 2008 recession. This decrease in production was attributed to less oil drilling and petroleum refining.

Due to a decreased supply of oil, gas prices rose, and as a result, consumers have less money in their pockets to spend on other things. This accounts for the “C” component in the GDP equation.

At a rudimentary level, economists expect overall output to decrease in short run because of storm-related job losses, but note that it will ultimately increase in future quarters when jobs and structure start to come back. In the long run, however, the Harvey won’t drastically affect the big economic indicators: GDP, unemployment, and inflation.

The Wall Street Journal forecasted that Hurricane Harvey will “reduce the pace of job gains by about 27,000 jobs a month” in Q3. By Q1 of 2018, forecasters predict a boost of 13,000 jobs. Economists also predict GDP will fall by 0.3% in the third quarter.

To add salt to the wound, most homeowners and business-owners did not have flooding insurance, which additionally decreases their ability to spend and invest. It’s almost analogous to the effects of a stock market crash, says Constance Hunter, chief economist at KPMG.

Although the commerce department could not completely isolate the effects of Harvey on brick and mortar retailers, the weeks following the storm saw a mix of sales drops and increases. Necessity goods sales increased, including home furnishing supplies and grocery stores, while sales of non-necessity goods decreased. For instance, gas-station sales rose 2.5% in a month, due to higher oil prices. Internet sales fell a percent, the largest decline since Q2 2014. Another uptick to the equation is a 0.2% increase in auto sales, due to the loss of automobiles (a necessary good) from the storm.

Overall, a small dip in productivity will be seen for a quarter, due to rising oil prices, lost assets, and decreased consumer spending. Though only a short-term scale, consumer spending, which accounts for two-thirds of GDP, will still have a profound effect on the surrounding economic and regional locus.


Equifax Doesn’t Ring a Bell? Well it Should Because It Probably Affects You

Equifax Inc., one of three major U.S. credit reporting agencies, or in other words, a company who has access to your most personal information from social security number, driver’s license, to credit cards.

The company receives all of this personal data most likely from your bank provider, and their “data breach it discovered on July 29” (Wired), is one of the most high-profile security breaches in its’ history. In fact, Equifax stated that 143 million customers—almost half of America—were affected by this breach, and from that number, 209,000 of the U.S. consumers had their credit card numbers exposed.

So why does all this matter? Equifax has most likely put your personal information at risk of being available online. And this data “packaged together sells for upwards of $30 per identity on online black markets, according to Mark Nunnikhoven, head of cloud research for cybersecurity firm Trend Micro.” He adds, “it’s enough to allow cyberthieves to take over you online” (qtd. in CNN).

If this isn’t still clear to you, it means you probably won’t pass a credit check, thus, making it impossible for you to take out any loans. And on top of that, for example, “[if] someone gets a driver’s license in your name and runs a red light or gets a speeding ticket, you’re on the hook,” according to CNN. CNN adds, that “[recovering] from identity theft isn’t easy,” to say the least, and “you could have to provide months or years of information to clear your name.”

The potential for economic disaster is detrimental. So if you’re poor, you’re basically screwed. The worst part is, since “Equifax still hasn’t given reliable information on who exactly was affected,” according to Quartz, that means everyone has to play victim and take responsibility on minimizing potential damages—damages, again, ranging from “thieves using stolen identities to file taxes, obtain drivers’ licenses, run up medical bills or commit crimes” (Quartz)—this not only takes up time, but money.

In a 2016 survey by the Identity theft Resource Center, out of 300 participants who were victims of identity theft, “52% earned household incomes below $50,000 per year, and 33% earned less than $25,000,” as well as an average of “$1,343 in stolen assets” for the average victim for identity theft costs—and on top of that, “31% lost their home” (Quartz).

Now imagine if half the United States was affected, which is what Equifax put us in risk of. Sounds like another depression just waiting to happen. Basically, this Equifax breach can affect you in the most difficult of ways messing up your life in so many countless ways.

On top of its affect on us, who matters, Equifax’s “shares [dropped] more than 8 percent in after-hours trading,” according to Bloomberg. And following the massive security breach, Equifax executives sold “nearly $2 million in shares of credit bureau Equifax Inc,” actions compared to “insider trading,” said Reuters. These stock sales are currently being investigates by the U.S. Department of Justice, the Securities and Exchange Commission, as well as the Federal Trade Commission.

On September 15th of 2017, the Equifax released a statement on their site, announcing the retirement of their CIO and CSO, as well as offering “free credit monitoring and identity theft protection to all U.S. consumers.” If you haven’t already, it’s time to start taking some precautions.

Hurricane Harvey’s effect on the Economy

It is obvious that the tragic event of Hurricane Harvey has left thousands of families devastated, as it has destroyed billions of dollars’ worth of homes and properties. What is not so obvious, however, is the effect it will have on the U.S. economy. Although it is extremely difficult to accurately predict the impact a hurricane such as Harvey will have on the economy, economists are breaking down the impact by economic indicators.

According to the Commerce Department’s Bureau of Economic Analysis, Texas accounted for 8% of the total U.S. economic output with a GDP of $1.5 trillion in 2016. The cost of the hurricane is estimated to be somewhere between $70 to $100 billion.

Inflation is an important indicator of Harvey’s impact, exemplifies through the increase of gas prices in Houston. According to the AAA, the average gas price has increased from $2.35 to $2.66 a gallon. This number is expected to continue to increase more before settling down. The increase in inflation will have its own impact on consumer spending, forcing people to spend less money on secondary items.

Hurricane Harvey is expected to have an impact on initial jobless claims, or people filing for unemployment for the first time. Historically, we have seen an increase in claims about 2 weeks after a massive hurricane, such as Katrina in 2005 and Sandy in 2012. This could account for all the people who lost their jobs because of companies shutting down or working part time due to weather conditions.

However, at a more macro level, Harvey’s impact on the economy may not be as bad as it sounds. According to Goldman Sachs, the rebuilding of homes and properties in the future could possibly offset the damage done to the overall economy. Although in the short run it may seem harmful, in the long run, properties are going to require rebuilding. This will motivate construction companies and their workers to migrate to Houston for job opportunities.

It has only been a few weeks since the hurricane struck Houston, therefore only allowing room for predictions about the future of its economy. It will be interesting to see how the impact of this hurricane will compare to other historical hurricanes in the past. Will Harvey be the costliest? Will it have a larger negative impact on the economy, or will rebuilding efforts balance it out? We have yet to find out.





The Economic Impact of Repealing DACA

On Sept. 5th, the Trump administration announced the repeal of DACA. As a part of the announcement Attorney General Jeff Sessions claimed that DACA has had a negative impact on the American economy, that is not correct. Rather, repealing DACA would hurt the economy.

Repealing this Executive order will not only lead to almost 800,000 undocumented immigrants who came to the united states as kids not being able to work legally and being at risk for deportation, but it will also have a negative impact on the size and growth of United States economy.

First, the actual act of repealing the excretive order will be expensive. The Cato Institute estimates that it will cost the federal government at least $60 billion over the next ten years to execute the repeal of DACA.

By rescinding DACA, the GDP would both shrink in size and growth. A Center for American Progress study estimates that the repeal of DACA would cause US GDP would shrink by $433 Billion over 10 years. The Cato Institute estimates that in that same time frame US economic growth would be reduced by $280 Billion. Both these studies show a dramatic negative impact on the American Economy.

The GDP would not be the only thing to suffer. A CAP study approximates that the contributions to entitlement would drop by $24.6 Billion.

DACA recipients are a key working age population, the average age of a DACA recipient is 22. As the overall American population ages and there are more people dependent on Medicare and social security we will need more people to pay into these programs. By eliminating DACA we are also eliminating a group that

helps keeps entitlements funded.

In general, the United States needs immigration in order to keep our

population pyramid in check. DACA has helped increased that vital working age population to help hold up our increasing top-heavy pyramid.

DACA will not only have a negative impact on national economy, but some states with large populations of DACA recipients will face even greater economic consequence.

California, the state with largest number of DACA recipients, would face an estimated $11.3 Billion annual GDP loss. Texas would also face approximately a $6.1 Billion GDP loss per year.

Venezuela – What happened?

Once a wealthy country in the 1970s, Venezuela is now experiencing political turmoil and its citizens are living in poverty. With over 298 barrels of proven oil reserves, why is Venezuela, the country with the largest oil reserve in the world, the poorest performer in terms of GDP growth per capita? What happened to one of the richest countries in Latin America?

  1. It’s ongoing economic crisis

Venezuela is now in its fourth year of recession. With the economy shrinking, the price of goods keep increasing. The price for a dozen eggs is equivalent to US$150. So, this means devaluation of their currency, the Bolivar. To put it into perspective, one U.S. dollar was 100 bolivars in 2014. In 2016, one dollar got you 1,262 bolivars. On top of this, years of the excessive government spending and poorly managed government programs led Venezuela to experience its worst economic crisis in history.

  1. The currency split

Venezuela established three different exchange rate systems for the bolivar; one rate for “essential goods”, the other for “nonessential goods and another one for its citizens. The two primary rates overvalue the bolivar, and the black market values bolivar near worthless. The government has tried increasing the number of bolivars to tackle this problem, but the money in circulation isn’t enough.

  1. Venezuela is running out of cash and gold

Venezuela is struggling to pay its bills. It owes approximately US$15 billion while its central bank only has US$11.8 billion in reserves. The oil company, PDVSA (Petroleum of Venezuela), is pumping less oil and is at risk of defaulting. China used to come to Venezuela’s aid and loan it billions of dollars at a time. But even China has stopped giving out cash. Interestingly, most of Venezuela’s reserves are in the form of gold and has being making debt repayments in the form of gold bars.

  1. Its hottest commodity, oil, isn’t “hot” anymore

Venezuela has the world’s largest oil reserves, but the problem is that oil is the only commodity it has to offer. Ninety-five per cent of Venezuela’s revenue comes from exports, so if it doesn’t sell oil, the country hasn’t got much money to spend. Venezuela’s situation went downhill pretty quickly when oil prices plunged in 2014. It’s been struggling to recover ever since.

  1. Government control

The Venezuelan government enforced strict price controls on golds sold in supermarkets. It also stopped food importers to cease importing basically everything because they would have to sell their products for a major loss. In 2016, the government stopped enforcing price control. However, prices are still so high that Venezuelans can’t afford even the most basics supplies.

There are many factors that have contributed to Venezuela’s economic and political turmoil. The challenge for the country will be to escape the cycle it is stuck in, and that’s only if they can sort out the state of their government first. There won’t be a quick fix solution, it will be long and arduous journey for the country.

Article 1
Article 2

What Would the End of DACA Mean for the Economy?

The health of the United States’ economy is largely determined by the actions of the President and those appointed by him. Ever since Donald Trump’s presidency began, the country has held its breath watching the decisions he has made on behalf the U.S. people, hoping for the best.

Most recently, one of President Trump’s decisions is putting the country at risk of a huge economic decline. A few weeks ago, Trump chose to end the Deferred Action for Child Arrivals (DACA) program, which was put in place by Barack Obama to protect the children of immigrants who came illegally, from being deported. This decision would affect about 800,000 “dreamers” in the U.S.

While the DACA program’s future is still not officially decided, if no supplemental program is put into effect, the loss of all those jobs plus the government expenses could be detrimental to the economy. A study conducted by the CATO Institute concluded that the cost the federal government alone would suffer from deportation efforts over the next 10 years would total at least $60 billion. The overall economic impact would be over $200 billion.

In addition to the governmental costs that the end of DACA would bring, the U.S. GDP would also take a hit. The Center for American Progress conducted a study finding that without the DACA workers, the GDP would decline by $433 billion over the next 10 years.

This decline would be felt in certain parts of the country more than others. California, for example, employs about 188,000 DACA workers. If the program was terminated, the GDP in California alone would suffer a loss of $11.3 billion a year. Texas would lose $6.1 billion per year, and North Carolina would lose $1.9 billion a year.

FWD, a pro-immigration reform group, conducted a study finding that 91% of DACA recipients are employed. Many employers of Fortune 500 companies have been stepping forward defending the DACA program and advocating for Congress to put a stop to Trump’s movement. As Microsoft President, Brad Smith stated via a blog post, “These employees, along with other DREAMers, should continue to have the opportunity to make meaningful contributions to our country’s strength and prosperity.” He admitted that Microsoft knows of at least 27 employees who are DACA beneficiaries, including engineers, finance professionals and sales associates.

The White House has enacted a six-month delay to the end of the program to give Congress time to act and hopefully come up with another solution. Until then, dreamers will continue to protest, advocate and fight to keep their rights and avoid the eventual economic decline that would come from the end of DACA.