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Policy Evaluation

The second variety of media economics is economic policy evaluation. The following examples illustrate ways in which it appears in the media:

What cannot be done, various reformers in the U.S. notwithstanding, is to impose on any government the obligation to balance its budget annually. Consider the consequences. If it did work, it would introduce a major destabilizing element.

The monetarists will allow you to go ahead and ruin people and countries, but when eventually in good and common sense you say, “Enough is enough,” the monetarists say, “Well, you spoiled the experiment.”

This is the reason why the fixed exchange rate system was scrapped in 1971. The U.S. had been pursuing an inflationary monetary policy to help pay for the Vietnam war and new social programs, and its trading partners did not all want to participate in it.

In contrast to up-and-down economics, media commentary on economic policy is of considerable interest to academic economists, primarily because most feel strongly that policy analysis is one of the main reasons for studying macroeconomics. This book emphasizes this dimension of media economics by providing literally hundreds of short two- or three-sentence news clips such as the preceding, asking readers for interpretation and evaluation.

Students are not asked, however, to interpret or evaluate these news clips using the technical curve-shifting art of the professional economist. With one significant exception, our presentation of media economics avoids using graphs.

Global Futures

It is important that we create some passive income nowadays. Working and saving alone is just now sufficient to have a better lifestyle in this current era that we are living in. However, when we talk about investments, one might be lost in what to invest and how do we do it. The initial cost is always an issue too in investing.

Globalfutures.com provides an opportunity for you in investing in forex and global futures. With Donald Trump’s rule of the greater the risk, the greater the returns, global futures provides you with good returns but at the cost of a higher risk. Now, normally, futures requires you to have a great initial investment to begin with. However, Globalfutures.com allows you to start off with as low as $250. In this case, if in the event that you do lose, it would not be a hefty price to pay!



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Up and Down Economics

The following examples illustrate ways in which up-and-down economics appears in the media:

According to the latest statistics, housing starts are up, indicating unexpected strength in the economy. Bond prices fell on the news.

In his eyes the battle is between the rate-lowering effect of the U.S. recession and the high rate of inflation. That sums up the problem now facing the interest rate forecasters.

News that U.S. job creation in January was more robust than anticipated sent a signal to currency markets to expect a stepped-up right against inflation, unleashing a bout of buying fervor for the U.S. dollar.

These examples are typical of commentary on business pages in the newspaper because they are relevant to money-making activity on bond or foreign exchange markets, or because they deal with variables such as interest rates that business people or mortgage renewers would be keen to forecast. Despite its practical value, however, most economists find up-and-down economics “stupefyingly boring” (to use Krugman’s term) and are upset that most people think that up-and-down economics is what economists do.

Why do economists disclaim up-and-down economics? A major reason is that it is too simpleminded. The predictions of up-and-down economics result from applying macroeconomic principles in conjunction with simplifying assumptions that are not quite true. This practice allows quick and easy calculation of predictions that may be good first approximations, particularly for those forced to take immediate action. However, the process lacks the intellectual rigor so prized by academic economists. There is no recognition of how economic forces from a variety of sources interact to influence the variable in question, economic “laws” of questionable empirical validity are employed with unjustified confidence, long-run guides to economic behavior are used to predict results in the short run, and nuances of modern macroeconomic theorizing are ignored.

Despite this condemnation by academic economists, a major goal of this book is to teach readers up-and-down economics. There are several reasons for doing so.

1. Of most importance, by learning how to interpret news clips such as the preceding, students will genuinely learn, understand, and remember fundamental macroeconomic principles.

2. Although boring to academic economists, up-and-down economics is useful to those involved or just interested in the business world. For example, knowing that a rise in inflation will increase interest rates and thereby cause bond prices to fall can help one avoid capital losses on bond holdings. Because so many students studying economics these days are business students, such knowledge is of particular value.

3. By focusing on applications as they appear in the media, students will as a natural by-product learn much about the institutional structure of our economy.

4. It is necessary to understand up-and-down economics to be able to evaluate media commentary on policy issues, the second dimension of media economics.

Whogets.com Launching

whogets.com! It is fun, new and cool with No Catch for the members (FREE AND NO SPAM).

How it works? WhoGets.com is offering you the chance to win a huge array of prizes in our online contests! The contest prize values range from $10 to $600 and will be displayed in each contest. These online contests are open exclusively to members of WhoGets.com. It’s free to join. Just sign-up. Once you’re a member, you can enter each contest once via the WhoGetsTM website. There’s nothing to buy and no offers to complete. You will never receive spam e-mails. There will be hundreds of contests.

The online contests take places in two phases: the semi-final round and the final round. The semi-final round will usually last for 7 to 14 days. During that time, the product to be awarded is displayed and any WhoGets.com member can enter the contest to win it.

At the end of the semi-final round, seven entrants will be randomly selected as contestants for the final round. Each of these seven contestants will have the opportunity to make a statement, up to 100 words long, explaining why they want or need the displayed product or whatever they feel like writing or they can leave it blank. The final round will usually last for another 7 to 14 days. During that period, WhoGets.com members vote for their favorite contestant. The contestant who receives the highest number of votes wins.

Press Release:

Charlotte, NC (PRWEB) April 24, 2007 — Arcavate Corporation, a leader in web 2.0 innovation and fun, announces the beta launch of its newest site, whogets.com. WhoGets combines all the excitement of winning great prizes with the viral interactive power of a voting community.

In a game show format, WhoGets.com offers members the chance to win a huge array of prizes in its online contests. They simply enter the contests for the products that interest them. The contestant has the opportunity to tell the community members why they should vote for him. whogets members decide who wins each contest. The contestant with the most votes wins the prize. There are no offers to complete, and whogets will not solicite its members for any other offers. There’s no fee for membership or for joining the contests. If a member would rather skip the contest and buy one of the prizes outright, he can take advantage of the Buy It Now feature.

There isn’t any other site like whogets.com. We are excited to see where the community takes it. It should be fun
“There isn’t any other site like whogets.com. We are excited to see where the community takes it. It should be fun,” Russ Snapper said.

WhoGets is just one more way Arcavate delivers on its simple philosophy — offer friendly, fun, innovative sites that create value for their visitors.

Media Economics

Textbooks written for economics majors present economics using the language and perspective of professional economists. Students learn to analyze economic phenomena through economic models, formalized with graphs and, at advanced levels, algebra and calculus. Much time is devoted to learning how to manipulate various graphical or algebraic models that have come to serve as an intellectual framework for economists.

In one respect, it is entirely appropriate that these textbooks have this flavor because it reflects accurately what academic economists do: they build, manipulate, and estimate economic models to aid in explanation, prediction, and policy formulation. Possession of a degree in economics means one is familiar with the terminology of these models and the technical means by which they are manipulated. At the undergraduate textbook level, the technical dimension is predominantly in the form of graphical analysis, so this type of economics is accordingly referred to as curve-shifting economics. At advanced levels the technical dimension is dominated by algebraic formulas in which Greek letters play prominent roles. Hence this type of economics is sometimes called Greek-letter economics, a term introduced by Paul Krugman in the preface of his book, The Age of Diminished Expectations.

At the other end of the spectrum from curve-shifting economics is the entirely nontechnical pop-art economics found in books sold to the general public, some of which actually become best-sellers. Krugman calls this airport economics because these books are most prominently displayed at airport bookstores where business travelers are likely to buy them. They usually have some axe to grind. Most tell tales of imminent disaster, and a few advocate specific panaceas. In general these books do not teach their readers much about economics and, in any event, are not designed as textbooks.

In between these two extremes is the economics that appears in the media, most notably on the business pages of newspapers. This is media economics, which has two varieties: (1) what Krugman calls up-and-down economics—news reports preoccupied with latest ups or downs of economic numbers, and (2) economic policy evaluation—news commentary directed at explaining, praising, or condemning government macroeconomic policies. The main purpose of this book is to teach macroeconomic principles and how they can be used to interpret these two varieties of media economics.

RegOnline’s New Integration

There has been something interesting going on in the market lately and all you event organisers and event holders might be jumping in excitement about this. RegOnline has integrated with the SalesForce CRM software to provide automation for the event planners and event professionals.

This site even offers members to open a free account where event planners may create an online registration form to start accepting registrations. Event planners may receive their payments from participants of their events via PayPal, one of the most famous payment gateway. Further to that, with this integration, event planners could generate a customized reports for statistical use. With 3 million registrants and 45 thousand events held and registered online, RegOnline.com still remains my best channel for the event registration process. Read more on the press release here:

“RegOnline Announces Integration with SalesForce CRM Software

Collaboration aids event professionals in achieving greater success with marketing and event follow-up.

RegOnline, a leading provider of online registration and event management services, has recently completed integration of its services with Salesforce, the award-winning CRM product. This integration addresses the growing needs of the event planning business, as more event professionals capitalize on automation of their processes with computer software.

The integration of CRM tools into registration software will help to improve the efficiency of a process that already boasts impressive numbers. Integration with SalesForce allows users to share leads and customers between services, greatly increasing the efficiency of marketing efforts across events and channels.

Many of RegOnline’s clients are already taking advantage of the new integration and with the addition of RegOnline to the AppExchange network, it is expected that SalesForce clients with event management needs will begin looking at online registration software as a complementary system to their lead-generation efforts.

“This will be a very useful add-on for us,” reports a RegOnline user on the software company’s forums, “and [the add-on will] help drive use of RegOnline across our company’s marketing operations.”

The addition of CRM software to event management promotes understanding of the event planning process as a sales funnel. Superior tracking of leads, customers, sales cycle, customer value, attendance and a large number of other factors all contribute to increasing the bottom line for event professionals able to take advantage.

Since 1996, RegOnline has been committed to helping event planners improve communication with prospects, and to making events more profitable, less costly, and less time intensive.”


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Why Not Nominal Interest Rates?

The best way to explain why nominal interest rate differences are not relevant, except insofar as they reflect differences in real interest rates, is to look at a specific example.

Suppose that the United States and Canada are in equilibrium with a flexible exchange rate, that both countries have a real growth rate of 2 percent per year, that their money supplies are both growing at 7 percent per year, and that their real rates of interest are 3 percent and 4 percent, respectively, implying a risk premium of one percentage point in favor of the United States.

What are the inflation rates in the United States and Canada? Using our rule of thumb from chapter 9, the rate of inflation in both countries should be 5 percent, calculated in each case as 7 percent - 2 percent.

What are the nominal interest rates in the United States and Canada? Using the relationship between the real and nominal interest rates, the nominal interest rate in the United States should be 3 percent + 5 percent = 8 percent, and in Canada it should be 4 percent + 5 percent = 9 percent.

What is happening to the exchange rate? Because the rates of inflation in these two economies are the same, the purchasing power parity theorem implies that the exchange rate is constant.

Will there be capital flows? Since the one-percentage-point higher real interest rate in Canada just compensates U.S. lenders for the higher risk of investing in Canadian bonds, there should be no capital flows.

Great Chandeliers

Now that you have got yourself a new home with great renovations done to it. You are ready to move your furniture in and start your family. However, you keep having the thought of the house being empty and dull. Perhaps a chandelier would be good.

The D’Legne chandeliers is one of the best chandeliers that I have seen being sold online. If you wonder why you have not seen these types of chandeliers or this brand in the market, it is solely because the D’Legne chandeliers are not being sold in retail shops. This is a wise move to cut all the profits from the middleman so that the vendors could offer the lowest price possible to end users.



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Can Monetary Policy Change Real Interest Rates?

Interest rate parity suggests that the world real interest rate is determined by major countries like the United States and that smaller countries such as Canada are forced to have a real interest rate equal to this world real interest rate plus a risk premium. An implication of this statement is that Canadian monetary policy should not be able to affect the gap between the Canadian and U.S. real rates and thus unilaterally change the Canadian real interest rate. However, central banks do raise and lower their real interest rates to affect their exchange rate, at least temporarily—once again confirming the maxim that interest rate parity should be interpreted as an approximate relationship holding over the long run.

Suppose that the real interest rate in Canada rises to make the difference between Canadian and U.S. real interest rates greater than the Canada/U.S. risk premium. Investors hold diversified wealth portfolios consisting of optimal fractions Of assets with different risk/yield combinations. When the Canadian yield moves higher, the optimal fraction of Canadian bonds in investor portfolios rises slightly, so investors adjust their portfolios to hold more Canadian bonds. The operative word here is “slightly”: they are not willing to buy massive quantities of the Canadian bonds because doing so would raise the overall risk of their portfolio beyond what the higher yield on Canadian bonds warrants. Consequently, although the rise in the Canadian real interest rate is curtailed by extra foreign purchases of Canadian bonds, it is not eliminated.

In addition, the activity of buying these bonds creates a demand for Canadian dollars that bids up the value of the Canadian dollar beyond the level that many would consider to be normal. As a result, investors may think that the Canadian dollar is more likely to fall in the future and thus may consider Canadian bonds as being riskier than before the interest rate rose. Consequently, the rise in the value of the Canadian dollar also limits the quantity of extra bonds bought by foreigners, preventing the Canadian real rate from falling back to its original level.

A determined central bank can modestly increase its real interest rate above that of the “world” real rate, beyond the risk premium, thereby creating a continuing capital inflow. The capital inflow will initially be quite large, as investors readjust their portfolios, but then will fall off to a modest level that reflects a higher fraction of the flow of new saving. A policy of keeping the real interest rate above the world rate, such as that followed by the United States during the 1980s because of budget deficits and low savings rates, causes foreign debt (U.S. bonds owned by foreigners) to increase, something that cannot go on forever. Interest rate parity is consequently a better guide to long-run than short-run behavior.