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t the conclusion of the mid-September meeting of the Federal Open Market Committee (FOMC), the Federal Reserve announced its decision to leave its target interest rate unchanged through the end of this month. Although some pundits had predicted that the Fed might use the occasion of August’s decline in the unemployment rate (to 5.1 percent from 5.3 percent in July), to begin its long-awaited monetary policy tightening, those forecasts left out one crucial fact.
The next time you are slipping the valet a couple of folded dollar bills, take a good look at those George Washingtons. You might never see them again. Every few years, there is a renewed push for the United States to replace the dollar bill with its shiny cousin, the one dollar coin.
Wednesday, 22 July 2015, marks the tenth anniversary of the OUPblog. In one decade our authors, staff, and friends have contributed over 8,000 blog posts, from articles and opinion pieces to Q&As in writing and on video, from quizzes and polls to podcasts and playlists, from infographics and slideshows to maps and timelines. Anatoly Liberman alone has written over 490 articles on etymology. Sorting through the finest writing and the most intriguing topics over the years seems a rather impossible task.
One of the most striking structural weaknesses uncovered by the euro crisis is the lack of consistent banking regulation and supervision in Europe. Although the European Banking Authority has existed since 2011, its influence is often trumped by national authorities. And many national governments within the European Union do not seem anxious to submit their financial institutions to European-wide regulation and supervision.
On May 7, British voters will head to the polls to elect a new Parliament. If mid-April forecasts are correct, the formation of a government will be a bit more complicated than in elections past. The results of those elections will have important ramifications for the conduct of economic policy in both Britain and the European Union. For most of the last two centuries, British governments have been formed by one of the two major political parties of the time.
As long as rulers have needed money for the military, public works, or just to enrich themselves, they have relied on taxes. As Americans approach the dreaded April 15 income tax-filing deadline, it is worth considering some key facts about taxation. There are many different modes of taxation: individual income taxes, corporate profits taxes, capital gains taxes, property taxes, inheritance taxes, sales taxes, social insurance taxes, taxes on imports, and a whole host of government-levied fees that look and feel a lot like taxes.
The industrialized world is currently moving through a period of ultra-low interest rates. The main benchmark interest rates of central banks in the United States, the United Kingdom, Japan, and the euro-zone are all 0.50% or less. The US rate has been near zero since December 2008; the Japanese rate has been at or below 0.50% since 1995. Then there are the central banks that have gone negative: the benchmark rates in Denmark, Sweden, and Switzerland are all below zero. Other short-term interest rates are similarly at rock-bottom levels, or below.
Last month, the European Central Bank (ECB) announced its plans to commence a €60 billion (nearly $70 billion) of quantitative easing (QE) through September 2016. In doing so, it is following in the footsteps of American, British, and Japanese central banks all of which have undertaken QE in recent years. Given the ECB’s actions, now is a good time to review quantitative easing. What is it?
Burdensome, costly, and—let’s face it—just plain stupid government regulation is all around us. And even well-meaning, reasonably well-designed regulations can impose costs all out of proportion with their benefits.
Although the media hype is usually most frenetic during presidential election years, this season’s mid-term elections are generating a great deal of heat, if not much light. By October 13, contestants in 36 gubernatorial races had spent an estimated $379 million on television ads, while hopefuls in the 36 Senate races underway had spent a total of $321 million. For those addicted to politics, newspapers and magazines have long provided abundant, sometimes even insightful coverage.
As an early-stage graduate student in the 1980s, I took a summer off from academia to work at an investment bank. One of my most eye-opening experiences was discovering just how much effort Wall Street devoted to “Fed watching”, that is, trying to figure out the Federal Reserve’s monetary policy plans. If you spend any time following the financial news today, you will not find that surprising. Economic growth, inflation, stock market returns, and exchange rates, among many other things, depend crucially on the course of monetary policy.
By Richard S. Grossman
Within months of being introduced in 2009, enthusiasts were hailing bitcoin, the digital currency and peer-to-peer payment system, as the successor to the dollar, euro, and yen as the world’s most important currency. The collapse of the Mt. Gox bitcoin exchange last month has dulled some of the enthusiasm for the online currency.
By Richard S. Grossman
Although the dollar has had no legal connection to gold since 1973, the gold standard continues to hold an almost mystical appeal for many politicians and commentators. The 2012 Republican Platform called for the creation of a commission to study the possible restoration of the link between the dollar and gold. When asked about the gold standard this summer, Sen. Rand Paul (R-KY), a potential 2016 Republican presidential nominee, replied: “We need to think about our currency that once upon a time had a link to a commodity, and I think we should study it.”
The time for holiday dinner parties is approaching. Bring more than a smile and a sweater to your next soiree. Offer your family and friends the most powerful libation: knowledge. Here are some gems that you can drop to keep the conversation sparkling.
By Richard S. Grossman
Britain operated under the gold standard for nearly 100 years before World War I forced Britain — and many other countries — to abandon it. During that century, Britain was the world’s military, financial, and industrial superpower.
By Richard S. Grossman
In the early 1600s, the King of Sweden declared that copper, along with silver, would serve as money. He did this because he owned lots of copper mines and thought that this policy would increase the public’s demand for copper—and also its price, making him much wealthier.