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Andrew Agrippina
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This article makes an important point about environmental issues directly impacting economic affairs. Environmental issues are often dismissed by those with no interest or passion in the environment, however this article points out that anyone who cares about our economy should care about the environment. As climate change continues to make its mark, it will become more and more evident that it is effecting all facets of our daily lives. Pesticides and chemicals invading drinking water, and sea levels threatening real estate are both very expensive problems to fix.
Toggle Commented Mar 15, 2016 on Link from Twitter at Jolly Green General
Barry Eichengreen explains that with the world economy shrinking, everyone is focusing on monetary policy. So much so, that they've nearly exhausted the extent to what they can do - interest rates are going lower and lower, and negative interest rates are becoming more common. This may help in a pinch, but is detrimental to the banking system as a whole. This leaves the economic world at a bit of an impasse. Eichengreen, however, proposes the solution of increasing public spending. Putting money towards research, education, and infrastructure. This would boost returns on private investment, and improve human capital. However, the U.S. and Germany don't even consider this option, largely due to ideological conflicts. I was surprised that there not more legitimate reasons the U.S. was not undertaking increased public spending. As Prof. Casey pointed out in class, many psychological/sociological studies have proven incredible returns on investment for improving a child's Pre-K education. How can the government not see the fiscal benefits to this, if anything? I hope to see our country move in this direction.
This article analyzes the action taken by Japan of adopting negative interest rates, in hopes of stimulating the economy. This new interest rate of -0.1% intends to cause banks to lend more to companies, who will hire more people, who will spend their money. By increasing consumer spending and investment, Japan hopes to get itself out of an economic rut. This measure is, as noted in the article, a desperate course of action, but it is a rather desperate time for Japan. The context for this decision was chiefly created by lowering oil prices, international trade slowing, and China struggling to grow. The Bank of Japan is not the trailblazer with their negative rates, rather they are following suit from other central banks. This is a sign that the global economy is entering into an unstable period, and I am very interested to see what effects this policy has.
Toggle Commented Feb 1, 2016 on ECON 102 at Jolly Green General
This article very effectively supported our classroom discussion on Wednesday regarding oil prices. It is easy for the average consumer to see the dropping of gas prices bring about a lower cost of living, and call this an undeniable plus for our economy and society as a whole. However, we read Washington Post articles, and become above-average consumers! It alerted me to the negatives that go along with this drop on oil prices. There has been a generally negative effect on large companies like Netflix, Facebook, and Apple, and international markets are suffering. This is in a large part due to the paradox of thrift, an idea we discussed in class, describing the phenomenon of consumers spending less because they anticipate a recession, and subsequently causing that recession by spending less - a self-fulfilling prophecy of sorts. So, we see a domino effect starting with gas companies. Because the price of oil has gone down, the demand has decreased, and gas companies are not doing as well. This has hurt international markets, and we are seeing the paradox of thrift in action. Though the market is starting to bounce back, it is certainly in flux, and the future is unknown.
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Jan 24, 2016