About Raquel Frye

Raquel Frye is Managing Director of the Regional Economics Studies Institute (RESI). RESI is considered a leading expert on Maryland’s economy and is responsible for providing economic consulting services for public and private clients across the State. An enthusiast of economics and economic education, Raquel’s posts tend to focus on analyzing the economics of policies and current news stories (with a little econ humor thrown in for good measure).
Raquel Frye


Things are starting to heat up around the RESI office as preparations are underway for this year’s Economic Outlook Conference (EOC), which will take place at Towson University on November 17. This year’s EOC theme is “Conscious Capitalism: The Economics of Doing Good.” I thought that the blog would be a perfect platform to touch on the topic prior to the event.

What Is Conscious Capitalism?

You may be already wondering, “What exactly is Conscious Capitalism?” The tagline on the Conscious Capitalism website states that “Conscious Capitalism exists to elevate humanity.” Well then, that certainly is a tall order. I think the credo helps to clarify the point a little further:

“Conscious Capitalism is a way of thinking about capitalism and business that better reflects where we are in the human journey, the state of our world today, and the innate potential of business to make a positive impact on the world.”

It goes on further: “Conscious businesses have trusting, authentic, innovative and caring cultures that make working there a source of both personal growth and professional fulfillment.”

Conscious Capitalism

Source: Cagle Cartoons

I don’t know about you, but it’s rare for business news to focus on personal growth and fulfillment. In a world where the majority of headlines about companies are related to lawsuits, share prices, and profit margins, this certainly is a different way to more holistically value and measure how companies are doing.

Conscious Capitalism Facts

If I understand it correctly, companies that subscribe to Conscious Capital tenets are usually driven by more than just profit margins—they truly commit to the greater good. But, given the fact that profit is not their only driving factor, just how successful can these companies be? Well, according to an article in the Harvard Business Review, these companies are profitable. A business professor by the name of Raj Sisodia recently co-authored a book about these types of companies. The book looks at 28 companies that were identified as being the most conscious. Of those 28, the 18 companies that were publicly traded outperformed (by using the S&P index) by a factor of 10.5 between 1996 and 2011. Other data seem to support this idea. A Global Survey on Corporate Social Responsibility reported that 43 percent of respondents agreed that they spend more on products and services from companies that implemented programs to give back to society. I know that, as a consumer, having the ability to shop with companies that have a greater goal in mind is something that I take into account when purchasing products. In fact, I tend to gravitate toward companies that treat their employees well and have good social and environmental missions.

EOC Conscious Capitalism


There are several examples of successful companies “doing good.” I think TOMS is a particularly interesting company to highlight. Just by visiting the TOMS site, you are instantly fully aware of its mission.

This site is not just one where you go and purchase shoes. You can find information about how TOMS gives back and how to get more involved in a variety of ways. As an economist, I think this is another way to examine how we are using our scarce resources and maximizing their potential. In this way, we aren’t just measuring firm inputs and outputs (my student’s favorite lecture in Microeconomics) but measuring a bigger, wider, but sometimes less tangible impact.

I think the topic of conscious capitalism is something that we are just beginning to understand and implement on a larger scale, and I’m glad RESI will spend a whole day spreading the message at the 2015 Economic Outlook Conference. We are looking forward to seeing you there!

About the 2015 Economic Outlook Conference

The 20th Annual Economic Outlook Conference will take place on November 17 at Towson University. To register, please visit our website. Educators and entrepreneurs leading the conversation on Conscious Capitalism in Maryland and at the national level will speak about the benefits of embracing this theory. Speakers include David Utts, Executive Director, Conscious Capitalism Chapter of Central Maryland; R. Edward Freeman, Darden School of Business, UVA; and John Montgomery, author of Great From the Start. View the complete agenda online.


Raquel Frye


Most of the time when articles are written about college affordability, they tend to focus on the negative aspects. Given the surplus of bad information, this is not entirely surprising. As a glass half-full type of person, I thought it was due time for some uplifting information. Two weeks ago, Stanford made an exciting announcement. The University said that tuition would be entirely free for students whose parents make less than $125,000 per year (this was $25,000 higher than the previous threshold). The school also announced that room and board would be free for students whose parents make less than $65,000.




Seem too good to be true? Let’s not get too excited. There is some fine print. Each student will still be required to pay $5,000 toward his or her education. However, to put it into perspective, the average Stanford undergraduate education costs approximately $65,000 per year. I don’t know about you, but as someone who is still paying off college debt (and will be for the foreseeable future) this kind of information makes me feel something like this:



RaquelPhotoOf course, you have to get accepted first, but this type of financial help is not just limited to this Ivy League school. Harvard, Yale, and Princeton all have similar financial incentives. According to articles I have read, most of these schools take this initiative because they want an economically diverse student population.

While the sentiment is noble, it is important to note that an essentially free education at these Ivy schools does not mean an easy ride. A recent story in the Boston Globe examined the hardships and cultural adjustments that lower income students, who are often first generation college attendees, deal with at these elite campuses. Fortunately, campuses and other organizations are recognizing these hardships and are being more proactive about acclimating such students. For example, The Bill and Melinda Gates foundation sponsors an online resource called I’m First, a resource which is intended to “celebrate first-generation college students and [is] supporting those who will be.” Regardless of their cultural assimilation, lower income students have extremely high graduation rates at these schools, a stark contrast to the rate at non-Ivy schools. In a world where education and opportunities are paramount to success, that is an incredibly uplifting statistic.

Raquel Frye


We are once again busy preparing for this year’s Economic Outlook Conference. In past blog posts, I’ve written about all the work it takes to put together the outlook presentation and the extremely important part that students play in helping us put the event together. This year marks the ninth conference that I have been a part of. However, this year’s conference has the special distinction of being my very favorite one yet. I feel as though I have to preface that statement by saying that it has nothing to do with the conference-sponsored happy hour we hosted two weeks ago. In fact, this year’s theme, “The Economic Impact of Craft Brewing in Maryland,” is proving to be even more interesting than I expected.


In preparation for the event, we have been learning a little more about the craft brewing industry. For example, there’s a big decision to make when deciding whether or not to can or bottle the brew. There’s also a difficult trademark process, and cease and desist letters are commonplace. These are just a few of the topics that the panel will be covering. I’ve also learned that there are jobs such as Chief Economist at the National Beer Wholesalers Association (Where did I go wrong in my career?).


This year’s speakers are a diverse group of individuals with varied knowledge in the industry. We have a historian who specializes in the brewing industry in Maryland (She even has a book!) and the marketing director of local brewery Heavy Seas, just to name a few. In case that wasn’t enough, we’ll kick off the day with our own Chief Economist Dr. Daraius Irani providing us with the economic outlook for the year. Every year, attendees look forward to the insightful findings (and lighthearted jokes) that his presentation has become known for. During an election year, the economy plays a significant part in the outcome of elections. Dr. Irani will help to frame the current climate and outline what his expectations are for the economy in the coming year. Fortunately, the theme will play into whatever outcome is expected—here’s hoping we will be cheering for a positive outlook. Registration is still open, and we can’t wait to see you all there!

Raquel Frye


Is hosting the Olympics worth the investment?
The winter and summer Olympic Games encompass significant work on behalf of the host cities. Before the Olympic Games begin, construction activity and preparation occur years in advance. One of the most frequently asked question once the Games are done is, “does the time and money invested to host the Olympic Games really benefit the host country?” One can assume that, aside from the pride gained in hosting, countries are expecting some benefit from their investment.


Sochi-2014-Company-OlympicsThe 2014 winter Olympic Games were hosted in Sochi, Russia, home to 343,000 citizens. This year’s host country invested significantly in the opening ceremony to boost tourism and create a lasting legacy. The ceremony featured a record 88 countries, 66 world leaders, and 800 performers. The cost to host this year’s winter Olympics in Sochi was an estimated $51 billion—a record high investment. Approximately 235 projects were facilitated to prepare for the Olympics, such as repairs to infrastructure and new housing for local residents. Through improvements due to the many projects and the added tourism of the games, the city is expecting to see a lasting positive effect on the economy.


Economists…in agreement?
Recently, National Public Radio (NPR) ran an interesting story regarding the long-term impacts of the games. One of my favorite parts of the story is this line: “Economists are notorious for being unable to agree on anything. So it’s striking that on the finances of the Olympics, they almost all agree.” Opinions usually point to the fact that once the games are over a country mostly ends up with an indebted city. This is almost in direct contrast to the expectations of Government stakeholders.


The British Government, in particular, claims that they were different. A report (nearly 1,000 pages) estimates that they earned at least $1 billion more than the $15 billion they spent to host the 2012 Summer Games. However, there has been a lot of criticism of the report, mostly because the report was funded by the government. Max Nathan, a London economist for the National Institute for Economic and Social Research, claims that it is too soon to really gauge whether or not hosting the London Olympics was worth the investment.


Photos Tell the Tale
Perhaps more telling than any economic report are images from past cities that have hosted the games. A photography project (http://olympiccityproject.com) led by Jon Pack and Gary Hustwit visits cities such as Athens (2004), Barcelona (1992), and Beijing (2008). The conditions they found in some of these Olympic villages are a far cry from their grand expectations. Some have been turned into prisons or malls while others have been left to decay.

Athens—Faliro Olympic Beach Volleyball Center - Photo credit: NBC News

Athens—Faliro Olympic Beach Volleyball Center – Photo credit: NBC News

It will be interesting to see what happens to the facilities in Sochi now that the Games have ended. How these facilities will be used in the future will say a lot about the long-term benefit to Sochi. According to Forbes, for some past host cities and countries, the Olympics have marked the transition to being a world player. They cite Tokyo (1964), Seoul (1988), and Beijing (2008) as prime examples. For Russia as a whole, the hope is that the Olympics has given the country a bigger starring role on the international stage and laid the groundwork for future international investment growth.

Raquel Frye


As the legislative session marches on, Maryland lawmakers and supporters are proposing to raise the minimum wage.  A number of bills have been introduced that increase the minimum wage to as high as $12.50 per hour.  At the current minimum wage rate of $7.25 per hour, a full-time worker would bring home approximately $15,000 a year—well below the poverty line of $23,050 for a family of four that is currently set by the federal government.


The minimum wage is one of the topics that economists most like to debate and theorize about. For instance, the traditional model of economics explains that, in a market where supply and demand maximize employment, an artificial increase in the wage rate (such as an increase of minimum wage) will reduce employment. Alternatively, other theories posit that increased wages translate to more spending and therefore more demand for goods services—driving the demand for employment upward. Other theories look at it from the supply side of the equation. The belief is that, when workers are earning better wages, they will be encouraged to work harder and be more productive. The extra cost incurred by businesses for higher rates will be offset by increased productivity and output. The ultimate impact will vary since labor markets each have their unique characteristics. The true impact of wage increases will vary by geographic location, type of industry, and labor market composition.

minimum wage

Image credit: Marguiles (Click for full size image)


The majority of the opposition comes from retail or food-related business owners who say that increased labor costs will severely impact their bottom line and increased costs would drive them to have to decrease their staff. However, other business owners do not share in that sentiment. Some argue that better pay equals lower staff turnover (which can be extremely costly) and can impact the success of a business venture.


Clearly, the economics of the minimum wage debate are highly nuanced. The ultimate impact on Maryland is difficult to determine without thorough analysis and projections. What we do know is that Governor Martin O’Malley is fully in support of raising the minimum wage during his last term in office.

Raquel Frye


The Senate is scheduled to vote this week to advance the nomination of Janet Yellen for Chair  of the Federal Reserve. If confirmed, Yellen would replace Ben Bernanke next January. There has been a lot of talk and controversy around her nomination. Yellen would be the first woman to chair the Federal Reserve, so that has definitely drawn some attention. She has faced opposition from some Republicans who oppose the current direction of the Federal Reserve’s policies. However, this all leads us to the question: just how important is the Chair?


Let’s first begin with a quick summary of what the Federal Reserve is and what its purpose is in our economic system. The Federal Reserve is the nation’s central bank and controls the supply of money in the economy. It ensures that banks have plenty of money to meet their obligations, and it can step in to provide loans to these banks if necessary. The Federal Reserve Chair is essentially the CEO of the whole operation. The Chair doesn’t have sole responsibility for the actions and outcomes of the system but is often held liable for any missteps. The Chair is part of a seven-member board that makes decisions regarding monetary policy. Their power comes from being able to influence the ultimate outcome of the board’s decision by setting the agenda of each meeting and refereeing the discussion.


Image credit: Cagle Cartoons

Image credit: Cagle Cartoons


All signs indicate that Yellen will likely continue to support the expansionary policies that Bernanke has supported. During her confirmation hearing, she made it clear that she would keep interest rates low to continue fueling employment growth. What this means is a continuation of low long-term interest rates.  Evidence of the success of this policy is mixed and many argue that it has not been successful at all. After all unemployment remains high even amid the lowest interest rates in history.


Without a doubt, Yellen’s resume is impressive. She certainly has the experience and knowledge to do the job. However, the main question is and will be: will she able to know when to pull back the reins before it’s too late? Critics believe that this policy of easy money has inflated the stock and real estate markets possibly creating another asset bubble that could eventually burst. If that is the case, it would mean a catastrophic blow to the economic recovery.


Raquel Frye


The Regional Economic Studies Institute (RESI) hosted its 17th annual Economic Outlook Conference on November 6th, 2013, focusing on the film industry and its challenges, future, and impacts. The conference this year was comprised of two separate segments—one focusing on the economy and the other on the film industry in Maryland. The title for this year’s economic outlook presentation was The Sum of All Fears. The presentation provided a current and long-range view of the economic indicators affecting Maryland and the U.S. economy. In addition, it focused on the five years since the financial meltdown and how the national economy has managed to recover.



Keynote Speaker Kevin Kilner with RESI Staff. Click the photo to view more!


Let’s be honest, sometimes presentations full of data and charts can start to get a little boring. To keep our audience engaged and spice up the data, RESI utilized Prezi—a relatively new presentation software. This new technology helped to keep the presentation exciting and entertaining. We received lot of positive feedback about it so we are excited to keep using it for future presentations. Our keynote speaker this year was well-known Baltimore native, film, television and stage actor, Kevin Kilner, or “Senator Kern” from House of Cards. Not only did he provide the insider’s perspective on the film industry, he was also very passionate about the filming that is done in Maryland. Kevin brought a lot of excitement and energy to the conference. Can’t wait for next  year! Any ideas what our next conference theme should be?


Here’s a video that highlights a few segments of the 2014 RESI Economic Forecast:


Raquel Frye


As is customary this time of the year, RESI is busy preparing for our annual Economic Outlook Conference.  This year’s conference will be focused on the impact of the film industry in Maryland. The agenda will feature our Maryland economic forecast presentation, a discussion of the impacts of The Film Production Employment Act of 2011, and a panel discussion on the return on investment of the film industry.


Preparations usually begin months in advance of the actual event and preparing for the conference is always a time consuming affair. We are lucky at RESI to have the support of a fantastic group of students that are integral in helping us prepare for the conference. We rely on them extensively for developing ideas, data collection, research, and editing. This year’s conference theme is closely tied to work we are doing for the Maryland Film Industry Coalition. One of our student interns, Molly Rozran, recently took time out of her day to discuss her involvement in the project and her thoughts on the theme of the 2013 Economic Outlook Conference.



RESI has always made it a priority to integrate students in our day-to-day activities. Their support, ideas, and enthusiasm keep us (stodgy economists) constantly on our toes. Having them available for assistance in preparing for the Conference has been of particular significance this year since we have experienced a particularly unique challenge. Due to the government shutdown, websites that are used frequently as sources for our presentation; places such as the Bureau of Economic Analysis and the U.S. Census were completely shut down—preventing us from being able to gather updated data for our presentation. During that time we relied on our student interns to collect anecdotal information and even dig back into cached websites to try to find data. Now that the shutdown is over they will be working furiously to help us catch up on all the time we have missed. It is safe to say that without our student interns our conference would not be the successful and informative event that it has become known for.

Raquel Frye


If it seems like we have been here before, it is because we have. This time, the U.S. Congress is headed for a two-round knockout fight over fiscal matters.  The first round involves funding for the Federal Government. Conservative House Republicans, in particular, are not budging on their stance of allowing a government shutdown by not passing a continuing resolution bill if their demands are not met. Their expectation: to have Obamacare (the Affordable Care Act) defunded. If a resolution is not passed, the lights will go out on the Federal Government on September 30 at midnight. The shutdown impact would be far and wide: national parks would close, passports would fail to be processed, and direct deposits for military spouses would stop.


Image Credit: Marguiles

The second round will see the clock once again ticking on the U.S. government’s ability to borrow money. In all actuality, the nation already hit the debt threshold in May of this year. Since then, the Treasury has been using various “extraordinary measures” to keep things moving along. These measures free up approximately $260 billion by limiting the investment and reinvestment of money from various retirement and disability funds. If the ceiling is not raised and these stop-gap measures fail to give the nation an extra spending cushion, the Treasury will have to make hard decisions regarding what bills get paid with the cash balance on hand.


A heated debate and extensive negotiations between the two parties over whether to raise the debt ceiling in 2011 adversely impacted financial markets and caused the downgrade of the U.S. credit rating from AAA to AA+ by Standard & Poor’s. This time, President Obama is standing firm on his stance of no negotiations. However, it looks like a showdown is imminent as the Republic House Speaker John Boehner is eager to work out a deal. Although the looming debt ceiling crisis is not receiving as much attention as it did in 2011 (mainly as a result of the focus on Syria), the path to a resolution seems a lot murkier this time around. Another downgrade of the nation’s rating would be catastrophic to financial markets across the globe. If the nation goes into default, there will certainly be no winners in this round. With only a few days until the end of the month, the bell for the first round has been rung.

Raquel Frye


Increased Interest Rates on Federal Student Loans
On July 1 of this year, the rate on new, federally subsidized student loans increased from 3.4 to 6.8 percent. Leading up to the increase, legislators tried and failed to work out a deal to keep that rate lower. Finally, on July 18th, a bipartisan group of senators announced an agreement on student loan packages. During a time when student debt is steadily increasing, and the job market for new graduates continues to remain lukewarm, this particular issue is something to which we should all be paying close attention to.


How does high student debt affect graduates and the greater economy?
Recent figures estimate that nearly 37 million Americans have some form of student loan debt, and, according to many sources, the total amount owed is at the $1 trillion mark. High student debt and low paying jobs prevent graduates from reaching financial goals, such as financial independence, homeownership, and retirement saving. These factors have an impact on the greater economy, which relies heavily on consumer spending to fuel its engine. This particular generation, the “Millenials,” are faced with higher student loan debt than any other in the past. These individuals, who are not able to fully become independent citizens, are not helping an already anemic recovery. According to the Census Bureau, the percentage of men between the ages of 25 and 34 who are living in their parent’s home increased from 13.5 to 16.9. The rate for women also increased—from 8.1 to 10.4 percent. The housing market’s current recovery is not being led by first-time homebuyers, further pointing to the financial roadblocks that young people are facing these days. Unfortunately, the ultimate impacts of this trend will not be immediately evident.


Image credit: R.J. Matson

How will high student debt continue to affect graduates and the greater economy?
We will continue to see repercussions for years, even generations to come. As student debt follows graduates into their later years, it will affect their purchasing power, ability to start up their own business ventures, and ultimately paying for their own children’s college education. It’s important that, as a society, we begin to take a hard look at both the ways of financing a college education as well as the escalating costs. Tuition rates have been soaring—outpacing medical and cost-of-living inflation over the last 30 years. At the current rate, neither is sustainable in the long term. If we want to continue on a path of economic prosperity, it’s important to tackle these issues now, before they become part of a broader, more long-term problem. The rate of student loans is only part of a broader college affordability issue.


What does the new Senate bill mean for student loan rates?
The bipartisan approved agreement caps rates at 8.25 percent for undergrads and 9.5 percent for graduate students. The borrowing rate would be tied to current interest rates and would lock in the surcharges paid to the government for administrative costs. The proposal is also backed by the White House. This agreement is favorable for students now due to historically low interest rates. For instance, if the agreement is voted on and approved, students taking out new loans for the fall semester will pay 3.86 percent. However, in the future, as the economy continues to recover, we can expect rates to increase which would mean higher rates for borrowers which could exceed the current rate of 6.8 percent—not exactly a better option as far as I’m concerned.