Econ 100B: Links Roundup

Over the last few classes, I’ve talked about several things in the blogosphere and/or other media. I’m going to link to them in this post. Hopefully, I’ll cover everything – if not, let me know in the comments.

The pros and cons of a weakening dollar were discussed in the following (July 3rd) Marketplace podcast:

U.S. exports are up and imports are down as a result of the dollar losing so much of its value against the euro. Who comes out ahead and who falls behind? Jeremy Hobson reports. [link]

Professor Robert Reich talked about a long-term stimulus package, as opposed to the current one in this (July 2nd) Marketplace podcast:

The economic stimulus was just a drop in the bucket. If Congress really wants to get the economy back on its feet, commentator Robert Reich has some summer homework for them. [link]

The Wall Street Journal has some numbers on monthly consumption, and consumer confidence, showing a slight increase in consumption (presumably from the stimulus package), but a sharp drop in consumer confidence:

Those charts, as well as several other economic indicators can be found on the Wall Street Journal‘s Economic Indicators page.

In class today, we talked about some of the non-mathematical problems with the Consumer Price Index – having more to do with the actual construction of the basket itself, rather than with the appropriate weights. Professor Menzie Chinn on the Econbrowser blog:

This post focuses on issue separate from the mathematics of the index forumulation, and has to do with what the typical weights at any given instant in time should pertain to. Should one use the expenditure weights that pertain to all the households aggregated in the economy? Or should one use the expenditure weights that pertain to the “typical” household?  [link]

And finally, we discussed a new post by Stefan Tangermann on the Vox blog, that attributes rises in food prices to policies directed towards biofuels, and not coming from speculation and increased demand:

New research shows that India, China, and speculators are not the culprits in the food price explosion. Biofuels were a significant element in the 2005-2007 food price surge as they accounted for 60% of the growth in global consumption of cereals and vegetable oils. …new research also shows that biofuel support policies are disappointingly ineffective on environmental grounds, [and] governments should reconsider them. [link]

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1 comment for “Econ 100B: Links Roundup

  1. Anny Chien
    August 10, 2008 at 9:03 pm

    The economy affects the US currency, not the other way around. Yes, our exports are high, naturally, because the goods we export cost less relative to foreign currency overseas and vice versa for imports.

    While I agree with Robert Reich that American that “American consumers cannot stimulate the economy on their own because they don’t have any money left. And exports can’t make up the difference”, perhaps taxing the richest individuals, the owners of the largest corporations in America, isn’t exactly what it takes to build the American economy back up (even if it does give a temporary infusion of cash to the Government.) Similarly, it is difficult to grow an economy by creating jobs through self-improvement road and infrastructure projects alone. This is a bit like the suggestion that we fill our tires with air to reduce our reliance on foreign oil. Yes, it may do something but it hardly stops our ongoing need for oil by any means, especially as our population continues to grow and more and more people (and other countries) require oil to grow the price will continue higher. Perhaps by cutting taxes and incentivizing companies to do business in America instead of relocating elsewhere would help the economy grow.

    We are already seeing a global slowdown with other countries cutting growth, and if we can weed out the credit and housing crunch/crises, then we can get things back to an even level and start to grow again. Unfortunately, I do believe the banks, and specifically the leaders of the banks who set the internal policies, as well as the monitors in the government are to blame for letting things get so far out of hand for a temporary gain. It helps nobody to give a loan without a borrower having to prove they are capable of making the payments with current income documentation and then offering loans that adjust higher based on interest rates. No even those who had nothing to do with the housing crises are at risk, and unemployment is edging up as a result and people are defaulting or at least borrowing from their credit cards more than ever before. Surely now is a time for a stimulus, but perhaps it can start at the top with new, common sense rules, and tax breaks that encourage growth, hiring, and development of business in the U.S.

    I know from personal experience that when rents go up in my neighborhood, small businesses are unable to raise prices for food or other goods high enough to compensate for the increased rent and they leave for less expensive locations. Then the city collects less rent, and starts to fall apart. It seems like super-taxing the wealthiest Americans and businesses will lead to a similar dilemma rather than creating an incentive to bring more business to America.

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