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Posted 2012-11-01

The Output Gap: A “Potentially” Unreliable Measure of Economic Health?

by Elise A. Marifian

The Great Recession ended almost three years ago, but in many ways it seems like the economy is still in a rut. Amid financial instability in Europe and uncertainty about the future of the U.S. business climate, many firms seem reluctant to expand and invest.

Posted 2012-10-01

The Great Inflation: A Historical Overview and Lessons Learned

by David A. Lopez

The recent expansion in the monetary base (currency in circulation and bank deposits), brought about by the Federal Reserve's quantitative easing measures, has stoked fears of high inflation. Critics argue that by flooding the economy with massive amounts of liquidity—by expanding its balance sheet—the Fed may have set the stage for a possible surge in the future price level.

Posted 2012-09-01

Higher Gasoline Prices: Temporary or Time to Buy a Hybrid?

by Li Li

Consumers may not remember the prices of many of the goods and services they buy, but few forget what they pay for gasoline. This spring, U.S. consumers first celebrated the continual decline in gasoline prices in May and June but bemoaned another surge in prices in July.

Posted 2012-08-01

The Legacy of the Olympics: Economic Burden or Boon?

by Lowell R. Ricketts

The Olympic Games are considered the foremost athletic competition in the world. The modern games have reached a scale that their ancient Greek founders could scarcely dream of. More than 10,000 athletes and 5,000 coaches and team officials, collectively representing nearly every country in the world, will convene in London for the 2012 Summer Games.

Posted 2012-05-01

“Wait, Is Saving Good or Bad? The Paradox of Thrift”

by E. Katarina Vermann

People save for various reasons. Some save with a specific purchase in mind, such as cosmetic surgery or a Porsche, while others save just to have more money. Economists say that individuals save to buy durable goods and/or accumulate wealth to maintain a certain lifestyle during retirement or in times of financial uncertainty.

Posted 2012-04-01

“Dewey Defeats Truman”: Be Aware of Data Revisions

by Mingyu Chen

President Harry Truman’s victory in the 1948 election was first announced by the Chicago Tribune as a loss to New York Governor Thomas Dewey. When even a simple counting of votes can produce such a large error, imagine the tremendous challenges and pressure for timeliness and accuracy facing government and private agencies in computing economic indicators for a $14 trillion economy.

Posted 2012-03-01

Gini in a Bottle: Some Facts on Income Inequality

by David A. Lopez

Income inequality has been rising in the United States. The recent recession may partially explain this phenomenon because higher unemployment and reduced working hours affect the incomes earned by many people during a downturn and weaker-than-expected recovery. 

Posted 2012-02-01

Traditional Versus Shadow Banking

by Bryan J. Noeth

Borrowing and lending is an important feature of a well-functioning economy. Individuals use credit—money lent by an individual or financial institution—to buy homes, go to college, and make general purchases. Firms use credit as start-up money and to buy property, build plants, and purchase equipment.

Posted 2012-01-01

What Do Financial Market Indicators Tell Us?

by Linpeng Zheng

To those unfamiliar with financial and economic lingo, the terms bandied about in the news can sometimes make no sense. The January 2012 Liber8 Newsletter, "What Do Financial Market Indicators Tell Us?" offers some help with explanations of common terms. The essay is accompanied by a table of terms, definitions, and the significance of each to the broader economy.

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