Economics News with a Historical Perspective
November 20, 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.
Address comments to firstname.lastname@example.org.
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.
Stock Market Crash Causes Depression
October 29, 1929. Panic in the stock market by itself has little effect on the overall economy. The potential effect on physical investment in plant and equipment is, however, enormous.
Stock Market Forecast 2006
Between November 1987 and January 1995, the Dow Jones Industrial Average increased at an annual rate of 10.9%. After the recent decline, the DJIA grew at an annual rate of 10.1% between January 1995 and May 2003. Is 10.9% a reasonable estimate of long run growth absent speculative bubbles?
Stock Market Bubble Bursts
The Dow Jones Industrial Average, which did not reach 4,000 until 1995, broke through 10,000 in April 1999. The 150% increase over four years represented an annual rate of increase greater than 25%. The fundamentals driving the market, unfortunately, did not support this increase, and a major decline in stock prices ensued.
The IS/LM Model
The IS/LM Model changes the focus from factors of production (i.e. the Classical Model) to demand for output. The equilibrating factor becomes the interest rate instead of the real wage rate. Most importantly, the model demonstrates that the economy can be in a stable equilibrium at less than full employment.
Additional models of interest are available at Classic Economic Models.
Check the directory of economics clubs to see if your club is listed. Links are free.