ECON 2020 Extra Credit

October 8 There is no news about inflation, but it's worthwhile to start showing you some numbers early in the semester. First, there are two things to differentiate: a price index and an inflation rate. There are lots of price indexes. An inflation rate is the rate of change of a particular price index. We can get information on a price index like the CPI by using the keywords "FRED CPI". We can get information on the inflation rate (according to the CPI) with the keywords "FRED CPI inflation". October 6 The discussion on the 3rd got cut off by a student announcement. We're going to navigate to the same page, but continue down the drop-down list a bit. We continued with the page entitled "Civilian Unemployment Rate" that we got from Google using the keywords below. This time we played around with graphs showing you what the characteristics of the unemployed actually are. So, you use the drop down menu to select "Reasons for Unemployment"...

September 22nd Skipped this today.   September 19th Skipped this today. September 17th The decision on interest rates was announced before class. What they are deciding on is a target for a rate; but it's not a rate that you or I have access to. Instead it is a rate used by banks between themselves. It's ... kind of ... the rate they all have in common. The thinking is that other rates that are less common will move in tandem with this one (and yes, they do tend to fairly strongly). They also don't set a rate anymore, rather they set a quarter point range in which it can fluctuate.  I showed a graph in class, but you should redo that search (since it was so close to the announcement that the data had not been updated yet). To see their upper limit on that range, you can use keywords like " FRED FOMC upper limit ". It is now 4.25%/year. The lower limit is 0.25%/year lower. The upper and lower limits were dropped by 0.25%/year. You will sometimes hear this referred ...

For April 1 (rescheduled from March 27) In a red state like Utah, it can be hard to convince macroeconomics students of facts about Democrats. One point I try to stress is that all elected officials like to spend money on their pet government "programs". Perhaps Republicans are a little less inclined to do this. Both parties try pretty hard to sell the ideas that Democrats always want to spend more and Republicans always want to cut spending. There isn't much evidence to support this. The same thing happens with taxes. All elected officials like to cut taxes because they think this will help them get your vote. Perhaps Democrats are a little less inclined to do this. Both parties try pretty hard to sell the idea that Republicans always want to cut taxes and Democrats always want to raise them. Again, the evidence is pretty weak on this. The reality is that both parties have bought in hard to the Keynesian idea that increasing government spending and cutting taxes will imp...

For March 18 I announced in class that I would skip this one because I couldn't get the article link I wanted to use to open properly. I'll see if I can get it ready for Friday. So that make this one the last one that will appear on Test 3. For March 15 A month ago we looked at the big 4 recession indicators. I was worried because we had 2 reds in January, and I said we should keep on eye on the other two. Well, now it looks like this : Those 2 missing ones for January both came in as green. Plus another green one for February. So it's kind of more of the same: some troubling data, but most of it ... isn't. That's been the story for almost 2 years now. For March 13 Yesterday, the BLS announced the CPI and its inflation rate for February. The number came in right around expectations: an increase of 0.4% in prices in February, and an increase of 3.2% over the past year. Here's the press release . On the surface, those seem like pretty small numbers.  BUT, if you ...

For February 19 This will be the last post from which short answer extra credit questions for Test 2 will be drawn. There's an interesting tidbit of data out this week. The FOMC makes monetary policy on behalf of the Federal Reserve (the U.S. central bank).  The FOMC walks a fine line, since they make decisions about setting interest rates. On one hand, they want to be open about their decisions. On the other hand, a lot of money is invested to figure out what they're going to do before they do it.  One way they balance these is that they do release the minutes of their 1.5 day meetings, but not until about a month after the meeting. Today we got the minutes from the January meeting covered earlier this semester. Armchair-macroeconomists and politicians will tell you that inflation is down. End of story.  Then the politicians say "Yeah us!" But there's more to it, since inflation tends to be persistent. And it can ignite again, sort of like the embers of a dying f...

For January 31st This post, and all others back to the start of the semester are the ones I may ask short answer extra credit questions about on Exam 1.  *** On Wednesday we just looked at some random news links about the FOMC's monetary policy decision ( this was one , and here is another ). Keep in mind that those articles were being updated in real time, so they may look a little different with the passage of time. As expected, they kept their target interest rate in the same range. They announce this at a press conference with a Q&A afterwards. Here's a video , and here's a transcript of the official statement . (Note that the video is one of those live event thingies where they just put the camera on and let it run ... so it's almost 2 hours long, but the speaker (Chairperson Jerome Powell) doesn't even come out until about the 59 minute mark). Those statements are super carefully worded because a lot of money is riding on potential interest rate changes; i...