Economics News with a Historical Perspective
July 25, 2014
The Econ Review features a historical perspective on economics news and opinions with daily updates. All original material is copyrighted. Off-site references open in new windows.
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U.S. Payroll Employment
In the News
The Phillips Curve
John Cochrane uses very similar Phillips Curve charts to review recent history and current issues.
Euro Roller Coaster
The wild ride continues.
The latest news and views.
Europe Adopts New Currency
January 1, 1999. After a lengthy period of debate, 11 European nations (Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) adopted a common currency. All these nations now have a single monetary policy, a single interest rate, etc. Their collective future hinges on the value of the euro.
Long-Term Capital Management (LTCM)
1998. LTCM, founded by former Salomon Brothers chief bond trader John Meriwether, included Nobel Prize-winning economists Myron Scholes and Robert Merton among its brain trust. For a time LTCM achieved excellent returns for its investors, and at its peak managed $7.5 billion.
Canada Nearly Breaks Up
October 30, 1995. Quebec voters responded to a referendum asking the question "Do you agree that Quebec should become sovereign, after having made a formal offer to Canada for a new economic and political partnership...", with a 49.5% vote for "yes" and a 50.5% vote for "no." The mechanism to dissolve the Canadian government and create two or more separate countries thus failed by half a percentage point. From an economic perspective, we can measure the risk this event posed to the Canadian financial markets by looking the spread between Canadian and U.S. bond yields.
The Mundell-Fleming Model
The Mundell-Fleming Model adds a BP (balance of payments) curve to the standard IS/LM framework. This extension provides a mechanism for thinking about monetary policy under either fixed or floating exchange rates.
Additional models of interest are available at Classic Economic Models.
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