Given that Americans still spend a considerable portion of their budget on gasoline (just under 4 percent in 2012), it’s important to understand why gas prices don’t always move in sync with oil prices. The latter are determined in a more-or-less centralized market, but the market for gas is often local, with prices affected by location, season and taxes, among other factors.
Fifty years ago, Arthur Okun examined the relationship between output growth and the unemployment rate. The empirical relationship of the resulting “Okun’s law” has remained largely intact since then, including during the Great Recession. However, while the law does fit our intuition about economic relationships, it should not necessarily be taken to be causal.
In measuring the returns to education, economists usually focus on the number of years of schooling. But many people would say that the quality of schooling matters, too, even at the high school level. Does the type of high school attended make a difference in future income?