Economics News with a Historical Perspective
October 21, 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.
China Fixes Value of Yuan
January 1994. China has maintained a fixed exchange rate for the yuan relative to the U.S. dollar since 1994. This has recently attracted attention as some have voiced concern that holding down the value of the yuan is making the prices of Chinese exports to the U.S. too cheap.
Japanese Stock Market Crash 1989
In May 1989 the Bank of Japan began to raise its discount rate from 2.5% to counter a perceived threat of inflation. The original rate had helped propel the Nikkei 225 index from 11,500 as recently as 1984 to about 38,900 by 1989. The discount rate stood at 6.0% by the end of 1990, and the Nikkei index fell below 9,000 by 2002, shedding over 75% of its peak value.
Stock Market Crash 1987
October 19, 1987. The stock market crashed as the Dow Jones average fell a greater one-day percentage than on Black Tuesday in 1929. In one day, the Dow Jones average lost 22.6% and the S & P 500 lost 20.5%, wiping out $1 trillion in market value in a single day.
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.
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