What Does Quantitative Easing Do?

A quantitative easing limerick: “I’m afraid,” said Bernanke to Geithner, “The debt crisis still has lots of bite in ‘er. Though it may cause some ranklin’ I’ll print lots more Franklins; We’ll loosen our money, not tighten ‘er!” Alternatively… When…

Should We Miss Larry Summers?

As you know, Larry Summers, chair of the National Economic Council, former president of Harvard, former Treasury Secretary, former chief economist at the World Bank, and Harvard professor, is leaving the Obama economic team. But what did he bring? You…

Translating the Fed

I just discovered the Slate Plain English tool. Still under development, its function is to transform unintelligible jargon into normal English. To see how it works, you might want to look at a Slate/Planet Money translation of Tuesday’s Federal Reserve…

Deflation Worries

We have something else to worry about: deflation. If you had $100 in 2000, you would need $126.60 in 2010 to make the same kinds of purchases. Called inflation, prices tend to go up each year. Most consumers and businesses…

FDR and Obama: Similar or Different?

If this were 1930 or 1931, you would think you were experiencing a cyclical downturn–not a Great Depression. In an econtalk interview, Stanford’s David Kennedy begins this way, placing the listener in a contemporary context. Instead of looking backward at…

The Two Sides of ZIRP

Hearing economists discuss the Fed’s zero-interest-rate policy, Harry Truman would again search for a one-handed economist. On the one hand…if you can borrow money cheaply, you are more likely to expand your business and buy a house or a car.…

Monkeynomics

Watching capuchin monkeys, we can learn about the financial crisis. In a July TED talk, Yale’s Laurie Santos describes the marketplace she created for the monkeys she was observing. Santos’s goal was to determine whether the mistakes we repeat are…

Becoming Ben Bernanke

This was fun! A 5 minute Federal Reserve simulation lets you target the fed funds rate for 16 hypothetical quarters and then watch the inflation and unemployment impact. It all appears manageable until a surprise news headline appears. The site…

Government Rules

What is a “systemically important” financial institution? 2300 pages of financial regulation do not specifically tell us. Instead,regulatory agencies will have to decide. One study indicated that implementing new Dodd-Frank financial legislation will require details for more than 243 new financial…

Euro Notes

$1 million in $100 bills weighs 22 pounds. In $500 bills, $1 million would weigh 4.4 pounds. But the U.S. does not circulate $500 bills. The EU does. According to the WSJ and NPR’s Planet Money, people engaging in illegal activities…