Plain Sense Economics

As of February 2011, the Consumer Price Index has gone up 2.1 percent in the preceding 12 months. Core inflation (All items excluding Food and Energy) went up just 1.1%. Inflation is certainly not beating at the door. On the other hand, global food commodity prices have been rising suddenly as have oil prices. In [...]

At about the 6th or 7th week of my Principles of Macroeconomics class we have a kind of broad (though not deep) understanding of how the economy works, how we measure it, and some of the things government does to influence it. We’ve learned about fiscal policy and monetary policy; we have a rough idea [...]

“If the Federal Reserve is printing all these billions and trillions of dollars, won’t we suffer from inflation?”
I get asked this question a lot lately. First, despite the inference of the video provided by the Bureau and Engraving and Printing (see below), the Fed has not been running the money printing presses for extra shifts [...]

Harvard University’s Martin Feldstein wrote in the Wall Street Journal today (April 15, 2008 – see article) that the Federal Reserve should stop lowering interest rates. He argues that lower interest rates have a special impact on commodity (i.e. food, oil) prices.
But high unemployment and low capacity utilization would not prevent lower interest rates from [...]