Home Page for Economics 195 The Election and the Economy
Prof Woolf
Fall 2008
Oct 29: Janus Forum Debate: Russ Roberts and William McKibben 4:00 - 5:30 Maple Ballroom at the Davis Center
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Email Oct 22
1. Anna Schwart is the co-author with Milton Friedman of A Monetary History of
the United States. One chapter deals with the origins of the Great Depression
and has been published as a book, The Great Contraction. She is interviewed in
the Wall Street Journal about her thoughts on the current situation. She is 92
years old and still very sharp.
http://online.wsj.com/article/SB122428279231046053.html?mod=special_page_campaign2008_mostpop
2.
Price Fishback, an economic historian at Univ of Arizona, talks about the
experience of the Home Owners Loan Corp, a Depression-era program to help
homeowners who were defaulting on their loans.
http://freakonomics.blogs.nytimes.com/2008/10/17/economist-price-fishback-the-real-facts-about-the-original-home-owners-loan-corporation-and-what-they-mean-for-a-modern-incarnation/
3.
The BBC has a nice summary of what's happened in the financial world, with more
on what's going on in Europe than we've talked about
http://news.bbc.co.uk/2/hi/business/7521250.stm
4.
Down I-89 and across the river, Dartmouth had a conference on the financial
mess. This is a videocast:
http://capitalgainsandgames.com/blog/andrew-samwick/584/financial-meltdown-causes-consequences-and-options
5.
Russ Roberts (who will be on campus in 2 weeks debating Bill McKibben on buying
local vs buying global) gives his more libertarian perspective on the financial
problem and solutions in a newspaper interview.
http://www.pittsburghlive.com/x/pittsburghtrib/opinion/s_593861.html
6.
The Economist magazine, in last week's (Oct 9) issue, has an in depth survey of
the global financial system. It's long, but as is usual for the Economist,
well written and very thoughtful. If this link does not work, you can probably
get this through one of UVM library's electronic databases.
http://www.economist.com/finance/displaystory.cfm?story_id=12381995
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1. Social Security: A Primer, http://www.cbo.gov/showdoc.cfm?index=3213&sequence=0 (ch 1-3), Congressional Budget Office
2. James Hines and Timothy Taylor Shortfalls
in the Long Run: Predictions
about the Social Security Trust Fund Journal of Economic Perspectives (Spring 2005) pp 3-9
3. CBO, Updated Long Term Projections for Social Security, pp 1-38, August 2008
http://www.atypon-link.com/doi/pdfplus/10.1257/0895330054048759
4. David Wessel: The Basics of Social Security (Wall Street Journal, Feb 1, 2005)
5. Roger Lowenstein: A Question of Numbers (NY Times, Jan 16, 2005)
1. How does Social Security work? From perspective of worker, employer, retiree?
2. What is the function of the Social Security Trust Fund? How does it work? What will happen to it?
3. What are the long term problems with Social Security?
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Email Oct 15
1. From Steve Levitt's (Freakonomics) blog. Two
U. Chicago economists explain what's going on:
2. Arnold Kling, an MIT PhD
economist who made his fortune during the dot com days and now thinks and writes,
explains what caused the mess.
http://econlog.econlib.org/archives/2008/10/the_fantasy_tes.html
By the way, he mentions the book Liar's
Poker by Michael Lewis. I am now reading it for the first time and I
highly recommend it. It was written in the 1980s and in large part it is
about the beginnings of the mortgage securitization market. It's very funny
(really) and an easy read. And you can buy it used on Amazon for a
pittance.
3. Greg Mankiw links to some short readings by
well-regarded economists: http://gregmankiw.blogspot.com/2008/10/more-commentary-on-financial-mess_13.html
4. On another subject:
Mankiw links to economists supporting McCain. http://gregmankiw.blogspot.com/2008/10/economists-against-obama.html
5. And of course there are the economists for
Obama: http://econ4obama.blogspot.com/2008/09/66-of-economists-are-economists-for.html
6. I couldn't find a list of economists who don't
support either of them.
7. Here's the skinny on how Treasury Secretary Paulson
got the bankers to "agree" to take the government's money in exchange
for stock.
http://www.nytimes.com/2008/10/15/business/economy/15bailout.html?_r=1&ref=business&oref=slogin
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Email Oct 12
1. The New York Times has an interactive graphic
display called Credit Crisis Indicators. Click on each tab to view
different indicators of how tight credit is.
http://www.nytimes.com/interactive/2008/10/08/business/economy/20081008-credit-chart-graphic.html
These are updated daily.
2. The always interesting Joe Nocera of the New York Times on Market
Insanity.
http://www.nytimes.com/2008/10/11/business/11nocera.html?scp=4&sq=nocera&st=cse
3. The Wall Street Journal looks at the Great Crash and compares
it to today:
http://online.wsj.com/article/SB122368241652024977.html
4. Plan B. Economists have a different view of how to solve the
problem. Maybe the Ivory Tower ideas are more than just theory.
From Saturday's WSJ:
http://online.wsj.com/article/SB122368180323324909.html
5. WSJ on overview of what happened last week in the
markets. Do you know that $8.4 trillion of stockholder equity has
disappeared in the past year? Add to that about $4 trillion in housing
equity and you've got some serious wealth effects going on.
http://online.wsj.com/article/SB122368071064524779.html
6. Here is a debate between economic advisors for McCain and
Obama. Not specifically on the credit crisis, but it is relevant to the
class.
http://www.bus.wisc.edu/specialevents/economic-debate-2008.asp
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Email Oct 5
Here are some more interesting sites and discussions on the
financial crisis
1. Russ Roberts and Arnold Kling talk about how the mortgage backed
securities market started and Fannie and Freddie's role in it (1 hour podcast):
http://www.econtalk.org/archives/2008/09/kling_on_freddi.html
2. A new webiste on the meltdown (I particularly liked the last section)
http://www.themoneymeltdown.com/
3. Are we in a recession? UCSD's James Hamilton says yes.
http://www.econbrowser.com/archives/2008/10/the_downturn_wo.html
4. SNL on the meltdown :
http://gregmankiw.blogspot.com/2008/10/snl-on-financial-rescue.html
(note: This was pulled from NBC's site. You can find it at
http://patdollard.com/2008/10/it-is-here-the-banned-snl-skit-cannot-hide-from-louie
)
Email Oct 3
1. Joe Nocera in NYT on what happened on Sept 18-19
when the financial system almost crashed:
http://www.nytimes.com/2008/10/02/business/02crisis.html?sq=nocera&st=cse&adxnnl=1&scp=2&adxnnlx=1223032183-f8VXGWt02OIxi2eL8yl0yQ
2. Russ Roberts on government's complicity in the mess:
http://online.wsj.com/article/SB122298982558700341.html
3. John Cochrane on why the bailout bill is a bad idea.
http://freakonomics.blogs.nytimes.com/2008/10/02/john-cochrane-on-why-the-bailout-plan-would-be-a-disaster/
For Oct 7
What did the Friday employment release tell us?
1. Leonard Burman and Joel Slemrod, My Weekend With Nick and Adam, Milken Institute Review (Q3, 2003), pp. 50-58.
Do you agree with Nick or
Adam?
2. Michael Graetz, Tax Reform Unraveling, Journal of Economic Perspectives (Winter 2007) pp. 69–90 ,
For each section, understand terms and 1 question
What’s the big question the article addresses?
How have taxes changed in past 20
years? For better or worse? (We’ll
look at the candidates’s proposals next time)
3. Peter Orszag, Macroeconomic Effects of Future Fiscal
Policies, (also read accompanying letter),
CBO,
What is the CBO’s outlook on the future? What is the CBO? What do you think CBO (or Peter Orszag) would recommend the candidates do regarding tax policy?
For Sept 16
1. Giant
Pool of Money Got Too Hungry,
NPR, May 9, 2008 This is a good general
introduction.
2. Lawrence White, Fannie
and Freddie: Part of the Problem or Part of the Solution,
Milken Institute Review, (Q2, 2008) An
early look at the problem.
3. Institute
View: Subprime Blues, Milken Institute Review, (Q2, 2008)
4. Zanny Minton
Beddoes, Peter Orszag, Alan Blinder, Housing
Market Presentation (video) at
Also: these
questions: Be prepared to tell the story of what happened in the mortgage
markets and how and why it affected financial markets. Read articles in
the New York Times or Wall Street Journal or other similar media.
What has been the respons of the Obama and McCain organizations to the subprime mess? Do either support or oppose the Federal government’s bailout of Fannie Mae and Freddie Mac? What are their plans, if any, to reform the two institutions?
For September 9, 2008
What does Senator Obama
think about the economy? What are some of the contradictions in his views
of the economy? Can you compare any of these with Senator McCain’s
views?
Be prepared to begin
discussing the two candidates’ views on the overall economy from these
readings:
Obama
on Economy
McCain
on Economy/Jobs
Wall Street Journal
Debate: The Economy
1.
Paul W. Rhode and Koleman S. Strumpf,
Historical
Presidential Betting Markets , Journal of Economic Perspectives,
Spring 2004, pp. 127-142
2. IEM
Prospectus: PRES08_VS 2008 US Presidential Vote Share Market
(Iowa Electronic Markets) also Graph of
market prices
3. Why Vote When You Can Bet?, (Slate)
4. David Leonhardt, Looking for Sure Political Bets on Online Prediction Markets, (New York Times, February 13, 2008).
Be prepared to explain what a presidential voting market is and how it works. How does economic theory explain why they should work?
What does the
September 4, 2008
Overview of
September 2, 2008
Questions for Thursday’s and next Tuesday’s reading
1. NBER’s Recession Dating
Procedure
How does the NBER define and determine when a recession begins?
2. NBER Business Cycle Expansions and
Contractions
How many recessions have there been in the past 25 years? In the 25 years before that? In the past 25 years, about how much time has there been between recessions? In the 25 years before that?
3. Congressional Budget Office Economic Forecast update (February 2008)
What is the CBO’s forecast
for GDP and for important economic variables for the next two years? How
does the forecast incorporate the new administration?
4. James
Hamilton, Is
This a Recession And Do We Care?
Is it? Do we care? What is his evidence? How does he relate his information to the NBER?
5. David Leonhardt, How
Obama Reconciles Dueling Views on Economy, New
York Times Magazine,
What does Senator Obama
think about the economy? What are some of the contradictions in his views
of the economy? Can you compare any of these with Senator McCain’s
views?
Be prepared to begin
discussing the two candidates’ views on the overall economy from these
readings:
Obama
on Economy
McCain
on Economy/Jobs
Wall Street Journal
Debate: The Economy