With all the glitz and glamour (by normal economic standards, at any rate) surrounding microloans, an article by Jame Surowiecki of the New Yorker serves to temper the hype. The excessive publicity is driving up the availability of funds for microloans: This vogue has translated into a flood of real dollars: institutional and individual investments [...]
This week’s Economist has, in its “Economics Focus” column, an interesting article about whether we should look at GDP or GDP per capita. Some statements turn out to be fallacious when you substitute one for the other: WHICH economy has enjoyed the best economic performance over the past five years: America’s or Japan’s? Most people [...]
A credit default swap is a financial instrument that allows lenders (or buyers of bonds) to swap their rates of return in the event of default (or another event of similar magnitude, but different direction, e.g., a credit upgrade). They are, essentially, insurance for lenders in case the company that has borrowed their money goes [...]
The decision, it seems, is unanimous: Not only was employment growth in February negative, but the B.L.S. also tells us that the previous two months were worse than originally thought. Over the past three months, non-farm payrolls fell at an annualized rate of about 0.1 percent. [Freakonomics] – OK: payrolls down 22,000 in January, 63,000 [...]
Following up from my previous post on the riskiness of Americans versus Europeans, is this article from the same issue of the Economist varying returns between stocks and bonds: IF BOND and stockmarkets are driven by the economy, they should tell similar stories. American two-year government bonds are yielding around 2%, suggesting a dismal economic [...]
The latest New Yorker and last week’s Economist both have write-ups on the stimulus package that was just approved in Washington. The Economist looks at the package from a global standpoint, and asks what (if anything) other countries are doing to stem the oncoming IMF-predicted global economic slowdown. The New Yorker questions the efficacy of [...]
In Thursday’s class, I mentioned that the “advanced estimate” (or the first estimate) by the BEA for annualized growth in the fourth quarter of last year was 0.6%. [Take a look at the original BEA News Release]. Last week’s Economist has a great article on how (in)accurate these estimates are (emphasis added): …[what] statistics…reveal is [...]
Yesterday, we talked briefly about bonds, and government bonds (or Treasury Bonds, as they are called). David asked me – if the government is in a budget surplus, why doesn’t it use the surplus to pay off the debt? Usually politics gets into how exactly a surplus should be spent, but in general, one of [...]
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In preparation for tomorrow’s class, here’s an excerpt from “The Street Light” a blog by economics professor Kash Mansori (also in my blogroll, to the right). Since we will be talking about GDP and its components, here’s a little application of what we’ll be doing. Note that it’s a little dated (posted on 4/27/07), but [...]
Since there was some interest into the construction and meaning of the two major indices measuring the stock market, I thought I would write a little about them. The two indices are: The Dow Jones Industrial Average (DJIA) and; The Standard & Poor’s 500 (S&P 500) As I had mentioned in class, the DJIA contains [...]