The Federal Reserve Bank has been incredibly active recently. Due to a rising stability of growth in the economy, the FED has begun to make changes. The first change that economists cannot stop talking about is the increase in the federal funds rate by a quarter of a percent. The second change is creating a plan to decrease the rather large balance sheet the FED currently holds. Although increasing the federal funds rate is simple, deciding on how to decrease the balance sheet is much more difficult. However, with confidence in the economy, members of the FED are beginning to Continue reading Federal Reserve Balance Sheet Overload
Microeconomics throughout the years has always been ridiculed by other scientists, such as philosopher of science Alexander Rosenberg, for its seemingly weak ability to create valid empirical predictions or explanations. Although those are outside critiques, truth be told, economists also argue over the validity of each others works more often then one might think. More simply, there is not one universal way that economists look at empirically solving, predicating or explaining questions. Evidently, this generally creates huge competition in the field with inconclusive debates, and also supports the beliefs of critics. A recent article from The Economist provides a clear Continue reading Critique
Recent news from the head of the FED Janet Yellen has led to an increase in confidence that interest rates will be raised. The meaning behind the potential rise of interest rates is two-sided. While some are scared and unsure about the implications of the increase, others see the positive side of what the increase actually means. In 2008 when the U.S. experienced the Great Recession, the FED dropped the interest rate to zero. By dropping the rate to zero, the FED intended to get the economy back on its feet. More than 6 years later the rate has barely Continue reading The Expectation Game
Generally, when an economics student is taking the introduction to Macroeconomics Theory the most commonly used word that will come out of the professor’s mouth is Gross Domestic Product (GDP). GDP is a term defined as the value of all final goods and serviced a country produces in a given period. This monetary value enacts as an indicator of how the overall economy is doing. However, two other factors play a role in what a sustainable economy looks like. These factors are 1) inflation: the change of prices over time and 2) the unemployment rate. In the eyes of economist’s, Continue reading Possible Economic Boom?
India is one of the fastest growing economies, with not only a large population, but also a serious poverty issue. According to The World Bank, in 2009 India’s poverty rate hit a high of 31%! Although it has decreased since then, the poverty rate is still quite significantly high. Generally most approaches to decrease poverty are rarely sufficient and cannot produce any significantly transformational results. Since India has evidently struggled to close the poverty gap, recently reports from the Indian government have expressed interest in creating a universal basic income. Universal basic income is an extremely uncommon approach that in theory distributes Continue reading The Cost Benefit Ratio of Universal Basic Income: India’s Dream to Close the Poverty Gap
Venezuela began to face detrimentally high inflation in 2014, right after the death of previous President Hugo Chavez. Although this was not the beginning of the country’s monetary problems, high inflation has led to a huge decrease in the value of the Bolivar, Venezuela’s currency. Now prices of regular goods and services have skyrocketed. Not only has inflation led to the devaluation of the bolivar but it has also caused Venezuela’s government to panic and take precaution in order to make some goods and services cheap while others are staying severely expensive. In attempt to resolve and or manage the Continue reading The Value of a Dollar in Venezuela