econlife on ‘Financial Markets’

Financial markets connect borrowers and savers. By determining the price and quantity of money, financial markets are central to a market system. Financial markets also take us to central bankers like the US Federal Reserve system and the interest rates that central bankers influence. When econlife looks at financial markets, it is also exploring the role and definition of money and investment.

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    Sounds Like Pistachios

    Dec 25, 10 • 110 Views • Demand, Supply, and Markets, Economic Debates, Environment, Financial Markets, Thinking EconomicallyNo Comments

    “Remember the pistachios,” is a memorable line from a novel by economist Russ Roberts. In the first several pages of The Invisible Heart: An Economic Romance, a teacher says you have been given a room filled 5 feet high with pistachio nuts. The...

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    Calamity Markets

    Dec 20, 10 • 133 Views • Demand, Supply, and Markets, Economic History, Financial MarketsNo Comments

    Some markets are distressed. For close to 30 cents on the dollar, firms that purchase distressed securities have offered to buy loss claims from victims of the Madoff fraud. Instead of waiting for the settlement process to unfold for undetermined amounts,...

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    A Savings Lottery

    Dec 13, 10 • 127 Views • Behavioral Economics, Developing Economies, Financial Markets, Money and Monetary Policy1 Comment

    Assume you have 3 extra dollars each day. Would you use it for a lottery ticket or a savings account? Most people would select the lottery ticket. Economists, though, hoping to elevate our nation’s savings rate, would like to encourage the banking...

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    How the Fed Helped Harley

    Dec 8, 10 • 109 Views • Demand, Supply, and Markets, Financial Markets, Money and Monetary PolicyNo Comments

    Have you ever thought about how, every month or every week, businesses have money for paychecks? One answer is commercial paper. It is amazing that commercial paper is central to so much economic activity and few people have even heard of it. Simply defined,...

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    Who Do We Owe?

    Dec 4, 10 • 110 Views • Financial Markets, Government, Money and Monetary PolicyNo Comments

    Who do you think is the biggest holder of U.S. government debt? China? No. It is the U.S. government. Why? Please think about extra money the government might collect for Social Security. What does it do with those funds? Retaining cash would mean no return...