Economics in the News - May 24-30 How economics impacts our lives on a daily basis

Economics impacts our lives every day. Below are some of the top storylines from this past week related to economics.

"Talent is cheaper than table salt. What separates the talented individual from the successful one is a lot of hard work." -- Stephen King, author
Amazon is acquiring MGM. In an effort to further bolster its Amazon Prime Video subscription service, Amazon is purchasing the 97-year old film and television studio MGM for $8.45 billion. With more streaming outlets available to consumers, Amazon has focused on movies with more broad appeal to keep growing its Prime subscription service.

The deal hands Amazon a 50 percent share in the rights to the iconic James Bond series. Among the other 4,000 films that MGM currently controls, include “Rocky”, “The Silence of the Lambs”, and “The Pink Panther.” [The New York Times]

More than 12.6 million households in the United States adopted pets from March to December 2020 during the COVID-19 pandemic, according to the American Pet Products Association. The pet boom has increased demand for vet care with more clinics opening across the country.

The new heightened demand for vet services has drawn investors to the market. Morgan Stanley projects that the pet care business will grow to a $275 billion industry by 2030, up from $100 billion in 2019. Vet care is the fastest-growing segment of the pet care business. [The New York Times]

People are eager to travel, as COVID-19 restrictions are being relaxed. However, a severe work shortage means that travelers should expect delays while on the road. The tourism industry is showing signs of coming back with airline executives saying that domestic leisure travel is at pre-pandemic levels.

However, the labor shortage is threatening to derail the travel industry’s full recovery with lifeguards, hotel housekeepers and rental cars in short supply. The short supply of workers is hotly debated. Some blame the $300-per-week in unemployment aid while other hospitality workers have moved on to new careers after losing their jobs last year. [Associated Press]

A Kai Havertz winner in the 42nd minute lifted Chelsea to a 1-0 win over rival Manchester City in Saturday’s Champions League final in Porto, Portugal. The win hands Chelsea the Champions League crown for the second time in its history, upsetting a Manchester City side that captured the 2020-21 English Premier League title.

The all-English final took place in front of 16,000 fans. The final was a culmination in a season dominated by talk of huge financial investment that would have reshaped the game. Both Manchester City and Chelsea were part of this past spring’s proposed European Super League before becoming the first two clubs to withdraw. [The Wall Street Journal]

The economy is roaring back from the pandemic recession. The fiscal and monetary response has raised concerns that the economy will overheat and trigger unhealthy inflation. What can history teach us about the current increase in inflation? What are the differences between the 1970s and today?

Double-digit inflation rates were last seen in the 1970s. Federal Reserve chairman Paul Volcker raised interest rates to historical levels to slow the economy and lower the inflation rate. The current Biden administration and Federal Reserve Chairman Jerome Powell insist the recent jump in inflation is temporary because it was sparked by COVID-induced supply shocks and pent-up consumer demand. These should recede as the post-COVID economy returns to normal. [NPR]