36
Lectures
30
minutes/lecture
1.
Why Think about Capitalism?
You consider how capitalism works, its political prerequisites, and its political, moral, and cultural ramifications through key elements of capitalism and its origins.
1.
Why Think about Capitalism?
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19.
Individual and Community—Tönnies vs. Simmel
In the last third of the 19th century, a newly unified Germany went through a process of capitalist transformation, leading to debate about capitalism's social, cultural, and political ramifications.
19.
Individual and Community—Tönnies vs. Simmel
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2.
The Greek and Christian Traditions
You learn how modern Western intellectuals have evaluated capitalism by starting with the two great premodern traditions: the civic republican tradition and the Christian tradition.
2.
The Greek and Christian Traditions
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20.
The German Debate over Rationalization
Georg Simmel, Max Weber, and Werner Sombart offered three different perspectives on the cultural and spiritual effects of the spread of capitalism and its ideas of rationality and calculation.
20.
The German Debate over Rationalization
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3.
Hobbes's Challenge to the Traditions
Hobbes criticized these traditions, emphasizing happiness in this world as the goal of government and refuting the notion that government exists to guide us to some shared purpose or highest ideal.
3.
Hobbes's Challenge to the Traditions
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21.
Cultural Sources of Capitalism—Max Weber
You examine the cultural sources of disparate group success under capitalism, with special focus on Weber's The Protestant Ethic and the Spirit of Capitalism (1905) and Sombart's The Jews and Modern Capitalism (1911).
21.
Cultural Sources of Capitalism—Max Weber
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4.
Dutch Commerce and National Power
In the 17th century, the Dutch Republic provided an example of a highly commercial society of increasing power, leading European thinkers to reformulate civic republicanism in a more commercial direction.
4.
Dutch Commerce and National Power
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22.
Schumpeter on Innovation and Resentment
Joseph Schumpeter was among the most wide-ranging analysts of capitalism. But unlike most mainstream economists of his day, Schumpeter focused on the role of entrepreneurs, whose dynamism, he believed, caused resentment of capitalism.
22.
Schumpeter on Innovation and Resentment
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5.
Capitalism and Toleration—Voltaire
In his Letters on England (1734), Voltaire argued that commerce provides a means for people of different orientations to cooperate.
5.
Capitalism and Toleration—Voltaire
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23.
Lenin's Critique—Imperialism and War
You examine Vladimir Lenin's idea that capitalism fosters imperialism and related arguments by the British liberal John Hobson and Marxists Rudolf Hilferding and Rosa Luxembourg, before taking up a refutation offered by Schumpeter.
23.
Lenin's Critique—Imperialism and War
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6.
Abundance or Equality—Voltaire vs. Rousseau
Enlightenment thinkers debated the moral status of material well-being. Voltaire argued that the abundance created by commerce was the basis of civilization. Rousseau countered that material progress had increased inequality and undermined virtue.
6.
Abundance or Equality—Voltaire vs. Rousseau
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24.
Fascists on Capitalism—Freyer and Schmitt
This lecture looks at the critiques of the Weimar Republic's liberal democracy by political analyst Carl Schmitt and sociologist Hans Freyer, who argued that capitalist democracy posed a threat to effective government and national power.
24.
Fascists on Capitalism—Freyer and Schmitt
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7.
Seeing the Invisible Hand—Adam Smith
In The Wealth of Nations, Adam Smith explained how a competitive market could channel self-interest into socially beneficial directions.
7.
Seeing the Invisible Hand—Adam Smith
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25.
Mises and Hayek on Irrational Socialism
This lecture looks at ideas about the importance of markets introduced by Ludwig von Mises and further developed by his student, Friedrich von Hayek, whose "neo-liberal" approach focused on individual liberty and the restriction of government. Hayek's theories about the roots of Fascism and the link between anti-Semitism and anticapitalism are also examined.
25.
Mises and Hayek on Irrational Socialism
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8.
Smith on Merchants, Politicians, Workers
Smith argued that capitalism diverged from his competitive model, with each economic group trying to use its political power to promote its own interest. He urged policymakers to promote competitive markets that served the general interest.
8.
Smith on Merchants, Politicians, Workers
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26.
Schumpeter on Capitalism's Self-Destruction
You focus on Schumpeter's version of the notion that capitalism ignites processes that destroy its institutional foundations—set forth in his Capitalism, Socialism, and Democracy.
26.
Schumpeter on Capitalism's Self-Destruction
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9.
Smith on the Problems of Commercial Society
Smith's influence was probably greatest in arguing against government's direct economic involvement, but Smith, in fact, believed that a well-functioning government was the only source of many essential functions for a commercial society.
9.
Smith on the Problems of Commercial Society
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27.
The Rise of Welfare-State Capitalism
Perhaps the most important transformation of capitalism in the mid-20th century was the development of welfare-state capitalism. This lecture explores its origins and the varieties of welfare-state capitalism that developed after World War II.
27.
The Rise of Welfare-State Capitalism
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10.
Smith on Moral and Immoral Capitalism
You explore Smith's views on how a capitalist society could make people better and better off—but that lack of the rule of law, or inequality before it, could cause commerce to lead to immoral outcomes.
10.
Smith on Moral and Immoral Capitalism
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28.
Pluralism as Limit to Social Justice—Hayek
This lecture examines Hayek's conception of the links between capitalism and Liberalism, which called into question many of the premises of those who wanted to use the welfare state to shape society.
28.
Pluralism as Limit to Social Justice—Hayek
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11.
Conservatism and Advanced Capitalism—Burke
Edmund Burke offered a conservative analysis of the hazards posed by some forms of capitalism. His Reflections on the Revolution in France (1790) remains the most influential work of conservative thought ever published.
11.
Conservatism and Advanced Capitalism—Burke
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29.
Herbert Marcuse and the New Left Critique
During the 1960s, Herbert Marcuse's most influential work analyzed contemporary capitalism's ability to keep the masses quiescent by manipulating their needs.
29.
Herbert Marcuse and the New Left Critique
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12.
Conservatism and Periphery Capitalism—Möser
Justus Möser is an example of a conservative in a largely precommercial society, for whom the spread of international capitalism was a threat to existing ways of life.
12.
Conservatism and Periphery Capitalism—Möser
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30.
Contradictions of Postindustrial Society
In the 1970s, Daniel Bell argued that America had entered a postindustrial age and that capitalism undermined the work ethic, frugality, and deferred gratification that it depended on.
30.
Contradictions of Postindustrial Society
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13.
Hegel on Capitalism and Individuality
This lecture introduces you to Hegel's ideas about capitalism, individuality, and how institutions foster individuality.
13.
Hegel on Capitalism and Individuality
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31.
The Family under Capitalism
This lecture examines some useful conceptual frameworks for thinking about the links between capitalism and the family.
31.
The Family under Capitalism
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14.
Hamilton, List, and the Case for Protection
You encounter two voices in the early debate over free international trade: Alexander Hamilton, who made the case for protecting "infant industries," and Friedrich List, who developed Hamilton's ideas into a national industrial policy.
14.
Hamilton, List, and the Case for Protection
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32.
Tensions with Democracy—Buchanan and Olson
You explore James M. Buchanan's critique of Keynesianism based on public choice theory and Mancur Olson's explanation of how the logic of collective action could lead to economic stagnation.
32.
Tensions with Democracy—Buchanan and Olson
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15.
De Tocqueville on Capitalism in America
Alexis de Tocqueville's Democracy in America explores the propensity toward individualism and materialism in America and the countervailing influence of republican institutions and religion.
15.
De Tocqueville on Capitalism in America
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33.
End of Communism, New Era of Globalization
This lecture explores the origins and nature of the newest era of globalization and puts it into historical perspective.
33.
End of Communism, New Era of Globalization
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16.
Marx and Engels—The Communist Manifesto
Karl Marx and Friedrich Engels concluded that industrial capitalism profited only the wealthy while leading to the material and moral degradation of the masses. Nevertheless, in The Communist Manifesto (1848), they also recognized capitalism's achievements and possibilities.
16.
Marx and Engels—The Communist Manifesto
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34.
Capitalism and Nationalism—Ernest Gellner
An interpretation of modern history argues that the processes that made capitalism possible also led to changes in personal identity that made nationalism attractive.
34.
Capitalism and Nationalism—Ernest Gellner
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17.
Marx's Capital and the Degradation of Work
Marx spent most of the decades after The Communist Manifesto working on his comprehensive analysis of the capitalist economy. Although he provided a searing portrait of the industrial factory's degradation of labor, he overlooked the trends that argued against his theory.
17.
Marx's Capital and the Degradation of Work
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35.
The Varieties of Capitalism
You examine capitalist societies from five perspectives—political structures, types of welfare states, developmental strategies, forms of business, and extent of equality.
35.
The Varieties of Capitalism
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18.
Matthew Arnold on Capitalism and Culture
The British poet and cultural critic Matthew Arnold was concerned about "Philistinism"—spiritual and cultural narrowing in a capitalist society and the spill-over effect of applying a narrowly utilitarian, market mentality to other areas.
18.
Matthew Arnold on Capitalism and Culture
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36.
Intrinsic Tensions in Capitalism
Why has capitalism been so productive and innovative, and why has it outlasted its competitors, such as Socialism? You look at some recent thinking on this and at some intrinsic tensions in capitalism.
36.
Intrinsic Tensions in Capitalism
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36
Lectures
30
minutes/lecture
1.
The Importance of Money
What is money? Consider the fundamental nature of money as a social contract and a social institution that coordinates economic activity. Explore the connections between financial institutions and economic well-being, including the importance of "stable value money" to trade and the critical roles of healthy banks, efficient asset markets, and monetary policy.
1.
The Importance of Money
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19.
Why Interest Rates Move Together
The many interest rates in different areas of the economy tend to change together over time. Here, learn about the key factors that govern this, beginning with the ways that interest rates adjust to expected changes in inflation. Observe also how risk in borrowing and lending affects the rate of interest.
19.
Why Interest Rates Move Together
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2.
Money as a Social Contract
Money developed as a medium of exchange to facilitate trade. Here, learn about five stages in the evolution of money. Beginning with barter, trace the rise of commodities as money, the invention of coins, paper money backed by precious metals, and finally our era's "fiat" money, which has value by agreement alone.
2.
Money as a Social Contract
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20.
The Term Structure of Interest Rates
The formula known as the "Expectations Hypothesis" allows analysts to forecast future interest rates and conditions in the credit market. Understand the intuition behind the hypothesis, study the formula itself as it tracks yields on Treasury securities, and see how it benefits borrowers considering mortgages and loans.
20.
The Term Structure of Interest Rates
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3.
How Is Money Created?
Study the invention of paper money in the history of goldsmiths issuing paper receipts backed by gold deposits. Then trace the important history of the gold standard, upon which nations pegged the value of currencies, and the reasons the gold standard was abandoned in 1971.
3.
How Is Money Created?
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21.
Introduction to the Stock Market
Stock markets provide individuals the chance to share in the ownership and profits of corporations. Investigate the history of stock markets, their basic functions on behalf of investors, and how trades are made. Finally, learn about the various stock indexes that track the markets, and how mutual funds operate.
21.
Introduction to the Stock Market
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4.
Monetary History of the United States
The U.S. government's role in financial affairs has been historically controversial. Learn about the two failed attempts in early U.S. history to establish a central bank, followed by the system of "national" banks chartered in the 1860s. Follow key issues surrounding national currency and coinage, leading to the Federal Reserve Act of 1913.
4.
Monetary History of the United States
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22.
Stock Price Fundamentals
What determines prices in the stock market? Approach this question first through the "market fundamentals" model of stock prices, a formula linking a firm's capital, profits, and dividends to its share price. Contrast this with the "capital asset pricing model," which evaluates the rate of return an investor requires.
22.
Stock Price Fundamentals
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5.
Local Currencies and Nonstandard Banks
Finance is not just the business of the wealthy. Here, study nontraditional models for solving economic problems, from examples of local currencies galvanizing local economies to "microfinance" arrangements such as Bangladesh's Grameen Bank, which create highly successful savings and loan programs for the poor.
5.
Local Currencies and Nonstandard Banks
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23.
Stock Market Bubbles and Irrational Exuberance
This lecture introduces the fascinating group psychology of stock investing. Study the phenomenon of stock market "bubbles," in which prices are driven up without reference to profitability data. Then, grasp the "bubble" mind-set, which triggers speculative buying and selling based only on what others are paying.
23.
Stock Market Bubbles and Irrational Exuberance
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6.
How Inflation Erodes the Value of Money
This lecture investigates the factors governing inflation, beginning with an inflation history of the United States over the last century. Learn about the correlation between inflation and the consumer price index, and how inflation is triggered by excess money growth. Also, review inflation's detrimental effects and costs.
6.
How Inflation Erodes the Value of Money
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24.
Derivative Securities
Derivative securities play an important role in finance by allowing business decision makers and private investors to lower risk. See how derivative securities are created using underlying products, and study the major types of derivatives and how they function, including stock options, commodities futures, mutual funds, and "collateralized" debt obligations.
24.
Derivative Securities
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7.
Hyperinflation Is the Repudiation of Money
The history of hyperinflation offers both a compelling story and a cautionary tale of inflation's damaging effects. Trace the root causes of extreme inflation in governments that finance deficits by printing new money. Then, study key cases of hyperinflation, its "vicious circle" quality, and the inevitable fiscal reform that ends it.
7.
Hyperinflation Is the Repudiation of Money
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25.
Asymmetric Information
Asymmetric information occurs when one party in a financial transaction has more relevant information than another. Learn how this affects financial markets; in particular, the challenges it presents for borrowers and lenders. Also, discover why so few firms issue stocks and bonds, and why banks are so restrictive in regard to loan practices.
25.
Asymmetric Information
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8.
Saving—The Source of Funds for Investment
Explore the meaning of "investment" in economics as increases to a nation's "capital stock"—the equipment, technology, and human resources used in the production process. Then see how investment is made possible by domestic saving and foreign borrowing, and how investment is critically related to economic growth.
8.
Saving—The Source of Funds for Investment
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26.
Regulation of Financial Firms
Consider the case for government bailouts of financial firms, and why such actions are in the public interest. Then examine the types of government regulation of financial institutions, and see how the 20th-century history of bank regulation was a "tug of war" between looser and stricter rules.
26.
Regulation of Financial Firms
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9.
The Real Rate of Interest
Understanding how interest rates work sheds important light on our economy. Study the difference between the "nominal" or agreed-upon interest rate in a loan transaction and the "real" rate of interest. Learn how the "real" rate factors in the rate of inflation to determine the actual cost/benefit of borrowing and lending.
9.
The Real Rate of Interest
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27.
Subprime Mortgage Crisis and Reregulation
The subprime mortgage crisis of 2008 offers a clear example of breakdown followed by regulatory reform. Trace the dramatic events that led to the crisis, and learn about the mortgage-backed derivative securities that contributed to it. Finally, examine the provisions of the Dodd-Frank Act, designed to address the crisis's causes.
27.
Subprime Mortgage Crisis and Reregulation
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10.
Financial Intermediaries
Financial intermediaries or "middlemen" play an important role in modern economies. Investigate how intermediaries such as commercial banks facilitate borrowing and lending, which provide valuable services to each party. Afterward, study the fundamental types of intermediary institutions, including savings banks, mutual funds, money market funds, and insurance companies.
10.
Financial Intermediaries
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28.
Interest Rate Policy at the Fed and ECB
Interest rate policy is fundamental to the role and function of central banks. Investigate how the Federal Reserve raises and lowers short-term interest rates in pursuing its objectives of stabilizing prices and promoting a healthy economy. Compare the Fed's policies with the European Central Bank's, noting key similarities and differences.
28.
Interest Rate Policy at the Fed and ECB
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11.
Commercial Banks
In learning how commercial banks operate, examine the sources from which banks acquire their funds and how they use the funds they acquire, as well as how assets and liabilities function within banks. Finally, study three formal definitions of money, and how banks literally create money in the process of making loans.
11.
Commercial Banks
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29.
The Objectives of Monetary Policy
This lecture asks the question: What should the objectives of a government's monetary policy be? Explore the ways in which monetary policy on the part of central banks affects economies. Study the monetary policy mandates of several different nations, and consider whether the Fed's own dual mandate may be too broad.
29.
The Objectives of Monetary Policy
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12.
Central Banks
Investigate the role and importance of central banks as they provide banking services to commercial banks, focusing on the U.S. Federal Reserve. See how central banks control an economy's interest rates and create money, and how their ability to increase or decrease the money supply makes them the world's most powerful financial institutions.
12.
Central Banks
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30.
Should Central Banks Follow a Policy Rule?
The question of policy rules versus policy "discretion" highlights how central banks operate. Examine the case favoring predictable policy by the Fed in addressing economic events, compared with treating each event as unique. Evaluate the claim that the Fed followed a specific policy rule during the term of Alan Greenspan.
30.
Should Central Banks Follow a Policy Rule?
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13.
Present Value
Present value is an important formula for computing the current value of payments that will be received or made in the future. Learn how present value is used, in the examples of determining the current value of a savings bond and how much to save per year for future college tuition.
13.
Present Value
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31.
Extraordinary Tools for Extraordinary Times
Responding to the Great Recession of 2008, the Federal Reserve took unprecedented actions to address the crisis. Here, observe how the Fed intervened in credit markets, provided remedies for banks, and stimulated the economy, and consider the question of whether its actions went too far, paving the way for future inflation.
31.
Extraordinary Tools for Extraordinary Times
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14.
Probability, Expected Value, and Uncertainty
This lecture explores how financial decisions are made in the face of future uncertainty. Using the examples of both a dice game and a real-world business strategy, study the statistical tool of "expected value" as a method of predicting possible outcomes. See how the probability of expected profits influences business decisions.
14.
Probability, Expected Value, and Uncertainty
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32.
Central Bank Independence
Traditional thinking says that central banks must be independent of political pressures in order to best perform their function. Learn how economists define and measure "independence" and "transparency" of the central banks of the world. Investigate whether greater independence of central banks is associated with desirable economic outcomes.
32.
Central Bank Independence
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15.
Risk and Risk Aversion
Economists have developed ways of assessing people's willingness to take on risk in financial decision making. With reference to the "St. Petersburg Paradox," a classic problem relating to odds in gambling, observe how individuals tend to value the dollars they might lose more highly than the dollars they might win.
15.
Risk and Risk Aversion
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33.
The Foreign Exchange Value of the Dollar
Turning to international finance, grasp how currency exchange rates operate based on demand and supply, and how this system accounts for the devaluing of the U.S. dollar over the last two decades. Also study China's exchange system, which pegs its currency to the U.S. dollar, and its implications for the global economy.
33.
The Foreign Exchange Value of the Dollar
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16.
An Introduction to Bond Markets
Bond markets play a key economic role by channeling funds from savers to government and private entities that need funding beyond their current revenues. In this lecture, study the various types of bond instruments, including Treasury bills, notes, and bonds. Learn also about important factors underlying the federal deficit and the national debt.
16.
An Introduction to Bond Markets
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34.
Exchange Rates and International Banking
Understanding the movement of exchange rates gives key insight into international banking relationships. Investigate the factors that determine exchange rates in both the short and long run, and learn how economists evaluate currencies as over- or undervalued. Observe how international banks play an ever-increasing role in finance, and why this is so.
34.
Exchange Rates and International Banking
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17.
Bond Prices and Yields
In a deeper look at bonds, investigate how secondary markets for bonds operate and what they offer investors. Study fundamental concepts including the "yield to maturity" of bonds and the "holding period yield" in understanding the link between bond prices and interest rates and how economic events change them.
17.
Bond Prices and Yields
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35.
Monetary Policy Coordination
The coordination of monetary policy between nations has important effects on the world economy. Using specific examples, evaluate the benefits of coordinated interest rate policy versus the outcomes of given nations acting alone. Learn about the International Monetary Fund, its functions, and the role it plays in maintaining worldwide financial stability.
35.
Monetary Policy Coordination
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18.
How Economic Forces Affect Interest Rates
Changes in interest rates have widespread economic effects. Consider interest rates as market prices, set by the current market for credit. Then see how interest rates are determined in the long run by patterns of saving and investment, and in the short run by factors such as government deficits and recessions.
18.
How Economic Forces Affect Interest Rates
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36.
Challenges for the Future
In concluding, consider three key questions facing the world's financial systems: Will the United States solve its chronic deficit problem? Will the euro survive? And will financial regulators find a solution for the "too big to fail" problem? Examine the complex challenges posed by these issues and their critical implications for our economic future.
36.
Challenges for the Future
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