"The back story on front page economics." These accessible essays, written by economic education specialists, cover the basics of economic topics, with a separate version for use in the classroom. Special "Focus on Finance" essays cover personal finance.
Not overspending can help life go more smoothly. Still, many people find themselves in financial trouble. In fact, there were approximately 800,000 bankruptcies filed in 2017. Hopefully you will never find yourself unable to pay your debts, but it is good to know there are options available should you need serious financial help.
Spending patterns change over time because of changes in income, education, the structure of our families, and technology. The April 2018 issue of Page One Economics: Focus on Finance addresses how phone technology has changed our lives and our budgets.
While many people have heard of Bitcoin, far fewer understand it. In short, Bitcoin is a digital currency that allows transactions independent of the banking system. Lately, many people are buying Bitcoin purely as a financial investment, hoping it will appreciate. So which is it—currency or financial asset? Read more about it in the March 2018 issue of Page One Economics©.
There are many factors to consider when finding a place to rent. The February 2018 issue of Page One Economics®: Focus on Finance walks you through the process.
Robots are in the headlines, and many of us are wondering if they'll also be taking over our jobs. Is the "Robot Apocalypse" upon us, or is this part of a larger trend that's been occurring for much of human history? Find out by reading the January 2018 issue of Page One Economics©.
Credit bureaus have evolved into big businesses. The December 2017 issue of Page One Economics©: Focus on Finance addresses the growth of credit bureaus and how the credit reports they maintain affect both creditors and borrowers.
Is international trade good for Americans? The November 2017 issue of Page One Economics® provides the ins and outs of trade, including some history, the costs and benefits, and policy choices.
U.S. taxpayers expect the government to be a careful steward of taxpayer money. The October issue of Page One Economics®: Focus on Finance explains how the Treasury Offset Program recovers taxpayer money from people who have received government benefits in error or by fraud and also recovers delinquent child support.
Over 200 years ago, Adam Smith attempted to explain why some nations are wealthier than others. Today, the gap between rich and poor countries is even larger. The September 2017 issue of Page One Economics® describes how total factor productivity contributes to economic growth and how growth leads to a rising standard of living.
People are passionate about professional sports—they give people pride and a sense of community. And they create economic benefits for the community. But should tax dollars be used to subsidize sports stadiums? The May 2017 issue of Page One Economics describes some pros and cons.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. Consumers see or hear thousands of advertisements each day. The April 2017 issue of Page One Economics: Focus on Finance reviews advertising history and strategies ads use to create demand and influence consumer tastes and preferences.
Are many products made in the United States anymore? As it turns out, yes. In fact, U.S. manufacturing output is near its highest level ever—and with fewer workers. How is that possible? Productivity growth. The March 2017 issue of Page One Economics® describes what affects productivity, why economists are concerned about its recent slowdown, and what can be done about it.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. When tragedy strikes, how do people avoid bearing all of the costs of their loss? Learn more in the February Page One Economics: Focus on Finance.
No surprise—people with more education often earn higher incomes and are unemployed less than those with less education. Those with higher incomes also tend to accumulate more wealth. Why? Research shows that well-educated people tend to make financial decisions that help build wealth. Their strategies, though, can be used by anyone. Learn valuable tips in the January 2017 issue of Page One Economics.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. Federal individual income tax must be paid to the U.S. government, but the amounts paid vary widely. The December 2016 issue of Page One Economics: Focus on Finance addresses basic facts about the tax—its history, purpose, and current structure.
As Adam Smith said, everyone lives by exchanging. They exchange—buy and sell—to make themselves better off. Does the same principle apply to international trade? Do nations benefit from importing and exporting? The November Page One Economics explains the basics of international trade and its importance to the economy.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. Stocks and bonds offer potential gains for investors, but they can also help fuel the economy. The October 2016 issue of Page One Economics: Focus on Finance explains how stocks and bonds can help companies grow, entrepreneurs start businesses, and governments fund public projects.
With prices of new vehicles at all-time highs, many buyers are looking for used vehicles. It can be challenging, though, to figure out what is or isn't a good deal. The September 2016 issue of Page One Economics explains why asymmetric information makes it difficult for used-car buyers to avoid "lemons" and why lemons are a larger problem for the used-car market.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. What skills do you need to develop for future success? Academics for sure, but soft skills are also important. Learn more about soft skills, the labor force, and unemployment in the May 2016 Page One Economics: Focus on Finance essay.
Stock market mutual funds offer investors diversified stock market portfolios, but there are several types. Actively managed funds attempt to "beat" the market by using research, forecasts, and judgment to pick stocks with the best growth prospects. Passively managed funds attempt to replicate the market by buying a representative sample of the stocks on a specific stock market index. Which to choose? This issue of Page One Economics explains the efficient market hypothesis and how it might influence your investment decisions.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. The familiar magnetic stripe credit cards used for decades in the United States are being phased out. Read about the new smart-chip credit cards, designed to reduce fraud and improve security, in the March issue of Page One Economics: Focus on Finance.
Job growth has been healthy over the past five years. However, many people are still concerned about the overall health of the labor market. This issue of Page One Economics explains what the unemployment rate does—and does not—measure and whether it is a reliable indicator of the health of the labor market.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. myRA is a retirement savings account for people who don't have access to employer-sponsored retirement plans. This new U.S. Treasury tool reduces some of the barriers people face when saving for retirement. It's a way for people to build up some savings and then move on to investments in the private sector to continue their savings journey. The January 2016 issue of Page One Economics: Focus on Finance explains how to get started planning for the future using this new financial product.
It's often said that a college degree is the key to future success. Choosing to attend college is a major decision for young people. But why is a degree so important? This issue of Page One Economics examines two economic models used to study how education, productivity, and income are related.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. Where can borrowers get loans when banks and credit unions aren't an option? Maybe a low credit score, lack of collateral, or small loan amount don't fit with large lending sources. The November issue of Page One Economics: Focus on Finance describes a growing trend—peer-to-peer lending—as an alternative for borrowers and potential investment opportunity for lenders.
Does it feel like your dollars go as far as they used to? If not, how does that mesh when reports say inflation rates are lower than average? The October issue of Page One Economics explains the disconnect between what you might experience as a consumer and what the data show.
Oil prices affect the U.S. economy in many ways. For example, fluctuations in the price of oil can influence inflation, unemployment, and disposable income. Some local economies with close ties to the oil industry, however, are affected even more directly in both positive and negative ways. This essay covers one recent example of the local impact of oil prices.
This lesson received the 2017 Excellence in Financial Literacy Education (EIFLE) Award for Education Program of the Year. Prepaid cards were invented to solve a problem: replacing coin usage in pay telephones. Since then, prepaid cards have evolved into a huge competitive market for general-purpose reloadable (GPR) prepaid cards. Read more about GPR prepaid cards in the inaugural edition of Page One Economics: Focus on Finance.
"Strong" is usually preferred over "weak." But for the value of a country's currency, it's not that simple. "Strong" isn't always better, and "weak" isn't always worse. Learn more about foreign exchange rates in the March 2015 newsletter"””"Is a Strong Dollar Better than a Weak Dollar?"
This lesson received the 2016 Curriculum Gold Award from the National Association of Economic Educators. Historically, money was made of either valuable commodities such as gold or silver coins or pieces of paper (bills) representing these commodities. The United States severed its last official monetary link to gold in 1971. The January 2015 Page One Economics Newsletter describes some of the advantages and disadvantages of the gold standard.
The life cycle model shows that saving for the future requires people to limit consumption during their working years and save so they will have a "nest egg" to draw on during retirement. Recent changes in how people save for retirement have shifted some responsibility from firms to individuals.
How are economics and the environment related? The quick answer is that environmental quality is a worthy goal, but there is an economic trade-off"”a clean environment does not come without costs. The September 2014 Page One Economics article, "Economics and the Environment", provides some economic strategies for protecting the environment.
America is a nation of immigrants, who currently make up about 13 percent of the overall population. The May 2014 issue of the Page One Economics Newsletter shows how immigration affects the average American. The essay weighs the costs and benefits of immigration and discusses the concept of immigrant workers as substitutes for and complements to native-born workers.
The nonpartisan Congressional Budget Office tackles that question in a new report and highlights the trade-off presented by increasing the minimum wage. This issue of the newsletter explains the debate and discusses whether other approaches may be more effective in helping alleviate poverty.
The cost of a college education seems to be skyrocketing"but is it really? Learn about the concept of price discrimination and how it affects college costs.
To understand why people trade, suppose you were limited to consuming only items you could find within walking distance of your house. Or, perhaps even worse, only items you could produce yourself. For most of us, this restriction would severely diminish the variety of goods and services we enjoy on a daily basis. Therefore, the simplest answer to the question is that people (or entire countries) trade because they will enjoy a wider variety of goods.
The unemployment rate always seems to be in the news, but did you know there are different kinds of unemployment? There is the natural rate of unemployment; cyclical, frictional, and structural unemployment; plus underemployment. Read the October 2013 Page One Economics Newsletter, "Why Scarce Resources Are Sometimes Unemployed," to learn the differences.
Is there a recipe for economic growth? Perhaps some Miracle-Gro for the economy? If only it were that easy. While the exact recipe is a mystery, economists have identified some of the key ingredients. This month's newsletter discusses the role that economic institutions play in fostering long-term economic growth.
"Back in my day, a gallon of gas cost a quarter!" Has your grandfather ever said something like this to make a point about how expensive things are now? The price of gasoline indeed used to be much lower. In fact, the price of gasoline has risen from a little over $1 per gallon in 1992 to a little over $3.50 per gallon 20 years later.
How is the total value of all the goods and services produced in a country's economy measured? Gross domestic product (GDP) is one common and fairly comprehensive measure. This month's newsletter explains GDP components and how it is calculated. It also describes what GDP does"””and does not"””measure.
Remember when airlines started charging for checked bags? What happened to the number of checked bags after this added charge? And what happened to the availability of in-cabin storage space on planes? This month's newsletter answers these questions and discusses the pivotal role price plays in a market economy.
They say that "money makes the world go round." Just imagine a world without money as our method of payment for everyday transactions. Without money, we would all need to barter for necessary goods and services. For example, suppose an accountant needs to have her car fixed. Under a barter system, she would have to find someone who needed some tax advice in exchange for car repairs. The search to find a barter partner is time consuming and wasteful. Money solves this problem and many others. Read more about the three main functions of money and the damaging effects of too much inflation on these functions.
"Human capital" may not be the first thing that comes to mind when we think about investments, but investing in education and training is an important economic decision. Learn about human capital and the return on such an investment in the February 2013 Page One Economics Newsletter"”"Investing in Yourself: An Economic Approach to Education Decisions."
As the Rolling Stones song says, "You can't always get what you want." So we make choices. Every day, governments and individuals choose how much money to spend and what to purchase. The January 2013 Page One Economics Newsletter, "Choices Are Everywhere: Why Can't We Just Have It All?" discusses opportunity costs and scarcity and how they effect our spending decisions.
The output gap is one (of many) economic indicators used by economists to measure the strength of the economy. What exactly is the output gap, and how accurately does it predict the state of the economy? Read this month's Page One Economics Newsletter, "The Output Gap: A 'Potentially' Unreliable Measure of Economic Health," for an explanation of the output gap and answers to these questions.
All inflation isn't bad"a moderate amount can signal a healthy economy. But high inflation, such as that during the Great Inflation, can lead to a viscious cycle where expectations of higher inflation lead to further increases in the price level. Read the October 2012 Page One Economics Newsletter to find out what caused the Great Inflation, how tough (and painful) policy brought it to an end, and two key lessons learned.
Drivers may wonder whether the most recent spike in gasoline prices is temporary or will be longer lasting. Will prices eventually decline"maybe even to below $3 per gallon? Or is it time for drivers to alter their driving habits, maybe by buying a hybrid car? Be sure to read the September 2012 issue of Page One Economics Newsletter ""Higher Gasoline Prices: Temporary or Time to Buy a Hybrid?""for a discussion of factors that might influence that decision.
Competition, sportsmanship, and national pride are the foundations of the Olympics, but how much do the Olympics cost the host city and country? What are some of the economic benefits and costs? Is the investment in the Olympics worth it in the end? Read about previous host experiences with the economic side of the Olympics in this month's Page One Economics Newsletter "The Legacy of the Olympics: Economic Burden or Boon?" (see related graph: "Olympics-Related Temporary Increase in Employment"
The average saving rate for the typical American household before the recession started in 2007 was 2.9 percent; since then it has risen to 5 percent. Uncertainty about the future was the primary driver for the increase. More saving is a good thing, right? Well, some economists argue it might be detrimental to the overall economy. Given the benefits to individuals, how could this be? This month's Page One explores this "paradox of thrift."
The famous"Dewey Defeats Truman" headline illustrates the importance of timely and accurate data. Agencies that compute economic indicators for the $14 trillion U.S. economy face a tough challenge: providing up-to-the minute results and ensuring the reliability of the data. This month's Page One newsletter, "Dewey Defeats Truman": Be Aware of Data Revisions, explains why there is often a trade-off between these two factors and discusses the importance of data revision.
Income inequality has been rising in the United States and other developed countries. The March 2012 Page One Economics Newsletter discusses income inequality, its causes, and some possible policy solutions.
Modern economies rely heavily on financial intermediaries to channel funds between borrowers and lenders. In the first edition of the Page One Economics Newsletter, the role of traditional banking is outlined and a parallel system"shadow banking"is explored.
To those unfamiliar with financial and economic lingo, the terms bandied about in the news can sometimes make no sense. The January 2012 Liber8 Newsletter, "What Do Financial Market Indicators Tell Us?" offers some help with explanations of common terms. The essay is accompanied by a table of terms, definitions, and the significance of each to the broader economy.
Although the recent Great Recession was severe, its financial impact never paralleled that of the Great Depression. The November Newsletter compares these two economic downturns and shows how lessons learned in the Great Depression helped current Federal Reserve policymakers stabilize the economy during the recent economic crisis.
Natural disasters often cause extensive loss and damage, yet post-disaster reconstruction may create opportunities that bring long-term economic benefits. Read the October 2011 Newsletter "Natural Disasters: From Destruction to Recovery" for details.
Have you ever bought something you really couldn't afford? You simply swipe your credit card and leave the store with something shiny and new. That instant gratification overpowers any thought of the regret you'll have when you must start paying off your accumulated debt. Economists call this phenomenon time inconsistency. Read the September 2011 newsletter for some ideas on how to prevent time inconsistency for yourself and your government.
The cost of a college education continues to rise.The Project on Student Debt estimates that a typical 2009 college graduate accumulated $24,000 in student loan debt. Is a college degree worth the cost? Read the August 2011 Newsletter for the latest data on college versus high school graduates' earnings and employment prospects.
Last July, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 brought the most sweeping financial regulatory reform since the Great Depression. The May 2011 Liber8 newsletter outlines key provisions of the Act intended to prevent or lessen future financial crises and enhance consumer protection.
"Quantitative easing" has been in the headlines a lot from 2009 to 2011. First there was QE and then QE2. What exactly is quantitative easing, who does it, and how does it affect the economy? This month's newsletter has the answers.
To find out more about fiscal and monetary policy" who conducts them, how they work, and their roles during economic downturns" read this month's newsletter.
Inflation, deflation, disinflation. They affect the prices of everything we buy. To find out how and what's happening in today's economy, see the February 2011 newsletter, "Deflation: Who Let the Air Out?"
Financial crises and recessions have often led to significant financial reform. Perhaps the most noteworthy financial reform of the past century was the formation of the Federal Reserve System in 1913. This month's newsletter provides historical details of events leading up to the founding of the Federal Reserve.
Although the economy is rebounding, the unemployment rate remains high and private sector job gains remain weak. economists debate whether extending unemployment benefits keep unemployment artificially high by discouraging work.
The cleanup cost of the April 2010 BP oil spill in the Gulf of Mexico is estimated at $6 billion, not including the economic damage to the fishing and tourism industries, which will likely add several billion more. Proponents of stricter environmental regulation believe such catastrophes could be prevented at a reasonable cost. Opponents argue that many preventive procedures are too costly to justify, given the rarity of such incidents. Determining the right balance between preserving the environment and controlling costs is a difficult job for government regulators. Read the October 2010 Newsletter for a look at the economics behind the regulations.
State and local government employees have long enjoyed the perk of a guaranteed pension in retirement, but that may no longer be the case " because of the recent recession, state budgets are in trouble. Many states have under-funded their pension plans to pay current expenses, and many pension plans have also incurred huge investment losses due to the financial crisis. How can states remedy this problem? The September 2010 Newsletter, "State Pension Plans in Peril: The Need for Reform," offers possible solutions.
Greek's current sovereign debt has reached crisis levels. Should the United States expect something similar? Probably not. Read the August 2010 Newsletter to learn why (or why not).
Patent rights are becoming increasingly controversial in areas such as pharmaceuticals and genetics. Should the public good come before the private gain of new product inventors or developers? The May 2010 Newsletter tackles this issue.
The emphasis on global economics is here to stay, but how does it affect the average citizen? The April 2010 Newsletter examines the links between foreign exchange rates and global trade and explains the effect on U.S. prices and import/export trading.
For years, economists have debated the wisdom of increasing government spending during recessions. On the one hand, increased spending adds to budget deficits, but on the other, increased spending can stimulate the economy during a downturn, thus speeding recovery. Deficits topped $1.4 trillion in the latest recession"which raises two questions: "How big is 'too big' in terms of spending?" and "What are the long-term consequences?" The March 2010 Newsletter offers some insights into this timely topic.
Some U.S. taxpayers were angry and felt betrayed when financial company executives received large bonuses in the midst of the 2008-09 financial crisis. These executives headed some of the same firms whose risky practices contributed to the crisis"and then later received billions of dollars in government bailouts. Who makes the changes in executive compensation policies and regulations to avoid such risks in the future? Read the February 2010 Newsletter for answers and interesting insights.
Holiday sales are expected to be weak again this year even though the economy and financial markets are improving. Shoppers are especially reluctant to use credit cards for holiday purchases. According to the National Retail Federation's 2009 Consumer Intentions and Action Survey, only 28.3 percent of holiday shoppers will use credit cards; this is 10.6 percent lower than one year ago. Why are shoppers so hesitant to use their credit cards this year? Many factors are involved. Read the January 2010 Newsletter for the answers.
What would some of the most famous economists, such as John Maynard Keynes, Milton Friedman, and Adam Smith, and their followers say about the current financial and economic crisis? The November 2009 newsletter essay by Michelle Armesto outlines their probable responses.
Which public investment offers greater returns"a subsidy for a sports stadium or early childhood education? It might surprise some, but the answer is an investment in early childhood education. A research study from the Federal Reserve found a 16 percent return on such an investment, with 80 percent of the return going to the general public. The October 2009 Newsletter explains the lifelong benefits of early childhood education.
When the current U.S. recession ends and recovery begins, many pre-recession jobs, such as some in financial services and the automobile industry, will not return. So what are the options if jobs in your chosen industry no longer exist? The September 2009 Newsletter focuses on job retraining programs and lists some areas of projected job growth for the near future.
According to the Bureau of Labor Statistics (BLS), achieving a higher level of education is one way to guard against unemployment and increase earnings: A 2008 report found that workers with a bachelor's degree earned 65 percent more than workers with only a high school diploma and nearly 130 percent more than workers without a high school diploma.
Before the current recession, soaring stock prices and housing values made many Americans feel well off, and thus many were lax in saving for retirement. The current financial market downturn has erased much of the previous gains, leaving many workers unprepared for retirement.
The FDIC estimates that an additional 4 to 5 million mortgages could enter foreclosure over the next two years. How did this happen, and what can be done to improve the situation? The April 2009 Newsletter offers some insights and further resources on the foreclosure situation.
The new economic terms and programs"from TARP to TALF to COP"are important, but trying to keep track of it all can make your head spin. Read the March 2009 Newsletter for a clear, concise explanation of the Treasury's Troubled Asset Relief Program designed to help alleviate the nation's financial crisis.
The past year has seen much debate about whether the United States is officially in (or not in) a recession (it is). But just what is a recession? Who decides that fact and how? Or, in other words, what actually makes a recession a recession? Read the February 2009 Newsletter for all the details.
Have you every wondered what the term "seasonally adjusted" means in relation to economic data? What does the change of seasons have to do with economics? The January 2009 Newsletter explains the term and shows its effect on economic data.
With continuing increases in both health care spending and the number of Americans who are uninsured, everyone seems to have an opinion on how to rein in costs and provide better coverage. This month's Newsletter offers an overview of why costs are so high and what can be done to improve the situation.
China has emerged as a global player both socially and economically. What's behind China's great strides in economic performance? This month's Newsletter details some of the reasons for China's growth.
Why should the average American care about the 2008 Farm Bill and farm subsidies? Farm subsidies can affect the price of food and can influence the amount of taxes we pay. This month's Liber8 newsletter explains why farm subsidies were originally used, spotlights the debate about their continued use, and points out some changes to the 2008 Farm Bill.
August is back-to-school time, but for many families that means a return to poor-performing schools. The perennial question is how to improve performance. The use of school vouchers is one proposed but highly debated solution. This article examines the history of school vouchers and the major arguments for and against them.
It is difficult to measure the cost of the Iraq war and related expenses; it is at least as difficult to decide exactly what costs to measure. The May 2008 issue compares the two most widely cited estimates: one from the Congressional Budget Office and the other from researchers Joseph Stiglitz and Linda Bilmes. The newsletter also compares these estimates to U.S. GDP over the same time frame to get a better sense of the war's cost in relation to the entire U.S. economy.
With oil prices well over $100 per barrel, policymakers are considering everything from new fuel efficiency standards to biomass in an effort to reduce U.S. gasoline consumption. High oil prices, global warming, and the vitality of the American farm have introduced words such as "ethanol," "E85", and "flexible-fuel vehicle" to American households. However, the potential costs and benefits of ethanol production should be considered objectively. This month's newsletter explores the costs and benefits of America's golden fuel"ethanol.
Over the course of the next two decades, an average of 10,000 baby boomers per day will reach retirement age. Their retirement will cause a surge in federal spending. This month's Newsletter shows how the retirement of the baby boomers will affect government programs such as Social Security and Medicare and the federal budget.
They have been known to be deadly, disorderly, and expensive. Influenza pandemics occur 3 to 4 times every century, and many health experts believe another U.S. pandemic is unavoidable. How would a modern-day influenza pandemic affect the U.S. economy? Predictions include $700 billion in economic losses and a 5.5 % drop in GDP the year a severe pandemic occurs.
What is the local impact of big-box retail? Some states have begun to reconsider whether the benefits of such development are worth the costs to local communities.
Globalization has been covered heavily in the news recently, with special focus on the rise of China in the global economy and the sense of more job insecurity in the United States.
This month's newsletter focuses on the low and declining U.S. personal saving rate. As measured by the Bureau of Economic Analysis (BEA), the U.S. personal saving rate fell into negative territory during the third quarter of 2005 and has remained close to zero since then.
This month's newsletter covers the topic of subprime mortgage lending, with data and explanations you may find useful. The subprime market has been a closely covered news topic of late.