2. 8/30/05 Welcome to Money and Banking – Econ 351!

3. Instructor: Russell P. Chuderewicz A little about myself Your First Assignment

4. OUR HOME PAGE http://grizzly.la.psu.edu/~rxc122/ You will need the username and password User Name: ecochud Password: wildflower Let’s Go to the Home Page!

5. Who is arguably the most powerful person in the world?

9. Be sure to say a few words about Chairman Greenspan’s upcoming retirement.

10. How do we give a grade to the economy – that is, how is the US economy doing?

11. The three big Macroeconomic yardsticks! Unemployment – we want it low but not too low!! Inflation – we want it low and steady – but not too low – two extremes – deflation (Japan) and Hyperinflation (Argentina, Brazil, Russia?) Economic Growth – we want growth but not too much growth – referred to as overheating. Discuss

12. A look at the unemployment rate – think about some optimal level of the unemployment rate! (explain why we will always have some unemployment)

14. And what about inflation? Be sure to discuss different measures of inflation and what the Fed pays most attention to and why? The following graph is the ‘headline’ inflation rate as derived from the consumer price index.

16. And GDP growth Recall that there is some “optimal” rate of economic growth – what is it referred to as?

18. Many economists spend a lot of time trying to forecast the direction of the economy. How do they do?

19. A look at our forecasting successes (or lack there of)

21. Tell story about hurricane in Miami in 2000

22. Source of the under prediction of GDP growth

24. A More Historical Look

25. Unemployment Rate, 1970 I- 1997 II

27. So policymakers have clear objectives – what are they again?

28. Begin Cruise Ship Example