Triple-A Ratings are so Yesterday   Leave a comment

Link:https://www.npr.org/2020/02/05/803201941/triple-a-ratings-are-so-yesterday

In the United States bond market, only two companies currently hold a triple-A rating: Microsoft and Johnson & Johnson. Most companies are falling into triple-B and double-B bond ratings. Once companies fall below a triple-B rating, their bonds are considered to be “junk bonds”. Due to the current low interest rates, even if a company has a low rating, they still can receive a loan at a low price which means there is little incentive to achieve a high bond rating. With the record high level of corporate debt in the U.S., there will be little financial flexibility for these companies if a recession hits.

Original Air Date: February 5, 2020

Length: 9 minutes

Discussion prompt 1: Should the government incentivize companies to cut back on their debt and improve their bond ratings? If so, how should the government do this?

Discussion prompt 2: What are the long term economic implications of the extensive amount of corporate debt in the United States?

 

Posted March 24, 2020 by meaghanprice3 in Finance, Planet Money

The Long Life of Keynesian Economics   Leave a comment

Link: https://www.imf.org/en/News/Podcasts/All-Podcasts/2017/11/11/the-long-life-of-keynesian-economics

Keynesian economics was particularly popular after the Great Depression. Keynes revolutionized how government involvement in the economy was seen. Keynesian theories are still applied in financial crises today.

Original Air Date: October 16, 2014

Length: 7 minutes

Two Yield Curve Indicators   Leave a comment

Link:https://www.npr.org/2019/08/21/753185863/episode-934-two-yield-curve-indicators

In March, the yield curve for United States treasury bonds inverted. For the past six decades, the yield curve has been an extremely accurate indicator of a coming recession. Will this indicator hold true in the coming months?

Original Air Date: August 21, 2019

Length: 18 minutes 54 seconds

Discussion Prompt: What could cause long term treasury bond rates to drop below short term rates?

Discussion Prompt: What steps should the Federal Reserve take in the coming months to prevent a crash similar to the 2008 recession?

What can governments and central banks do to protect the world economy in the face of covid-19?   Leave a comment

Link: https://www.economist.com/podcasts/2020/03/03/what-can-governments-and-central-banks-do-to-protect-the-world-economy-in-the-face-of-covid-19

Central banks have cut interest rates in the wake of the Covid-19 outbreak. Typically when something like this happens, interest rates rise and inflation occurs, but right now the exact opposite is happening. Sectors of the economy that are taking the hardest hit include tourism, cross boarder commerce, and oil.

Original Air Date: March 3, 2020

Length: 18 minutes 39 seconds

Discussion Prompt: How does this outbreak alter consumer expectations, and inevitably, their spending habits?

Discussion Prompt: What role, if any, does the government play in stabilizing the markets in instances such as this?

The Fed Fights the Virus   Leave a comment

Link: https://www.npr.org/2020/03/16/816684372/episode-980-the-fed-fights-the-virus

In the wake of the Covid-19 pandemic, the Federal Reserve has lowered its interest rates to 0%. The Fed has been practicing quantitative easing in order to ensure individuals can sell Treasury bonds whenever they need to. Planet Money discusses whether this will be enough to prevent a recession from occurring.

Original Air Date: March 16, 2020

Length: 18 minutes 17 seconds

Written Assignment Prompt: Pretend you are the chair of the Federal Reserve. How would you deal with the Covid-19 pandemic to help prevent a coming recession? How would you adjust interest rates or the money supply during this time?

Covid-19 Drives Unemployment Claims Up   Leave a comment

Link: https://www.marketplace.org/shows/marketplace-morning-report/unemployment-claims-covid-19-automaker-factories-evictions/

Unemployment benefit registrations have increased dramatically in the past days. The U.S. government is trying to ensure that the current health crisis does not cause a long-term economic crisis. The government is also putting a hold on evictions and foreclosures in certain instances as well in order to prevent an increase in homelessness.

Original Air Date: March 19, 2020

Length: 7 minutes 21 seconds

Discussion Prompt: What are the economic ideas behind the strategies being implemented so far? What other ways could the government support those who lose their jobs during this health crisis? How can the government fund activities such as putting holds on evictions? What are the costs and benefits to be considered here?

Medicine for the Economy   Leave a comment

Link: https://www.npr.org/2020/03/13/815677688/episode-979-medicine-for-the-economy

Some economists believe the government should inject a monetary stimulus into the economy of hundred of millions, if not billions of dollars. Others believe our focus should be solely on the issue at hand: containing the Coronavirus. Economists discuss the importance of pushing funding into corona virus testing, paid sick days, and rebuilding after the public health issue is contained.

Original Air Date: March 13, 2020

Length: 25 minutes 17 seconds

Discussion Prompt: What is the role of the government in the economy in times of global health crises? Is a recession inevitable at this point, or are there ways the government can combat a sharp economic downturn?