Elasticity in Economics: The Four Measures and How to Use Them
Elasticity in economics measures how strongly markets respond to changes in price, income, or related prices. Explains all five elasticities,...
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Our blog covers every aspect of the global economy, and we update our content regularly, so you can be informed about the most important topics.
Repo Market Standing Repo Facility: September 2019 Spike
The September 2019 SOFR spike revealed how brittle US money market plumbing had become. The Standing Repo Facility, launched in...
Dot Plot FOMC: Decoding the Summary of Economic Projections
The FOMC dot plot is the most-cited chart in monetary policy. Reading it well requires looking past the median to...
Forward Guidance Frameworks: From Open-Mouth Operations to Date-Based Pledges
Forward guidance is how central banks move long-term interest rates by managing expectations. From qualitative language to date-based pledges, the...
Average Inflation Targeting: How the Fed Replaced Strict 2 Percent in 2020
Average inflation targeting is the framework the Fed adopted in 2020 to address persistent inflation undershoots and the lower-bound constraint....
Neutral Rate of Interest: r-star and What It Means for Policy
The neutral rate of interest r-star is the unobservable benchmark that defines monetary policy stance. Estimates span 170 basis points,...
Missing Markets Economics: When Prices Fail to Exist
Missing markets economics studies the trades that never happen. When information, property rights, or excludability fail, no price emerges and...
Positive Externality Diagram: Subsidies and Underproduction
The positive externality diagram shows how markets underproduce vaccinations, education, and research, and how a per-unit subsidy at marginal external...
Negative Externality Diagram: Taxes and Welfare Loss
The negative externality diagram shows how a Pigouvian tax set at marginal external cost shifts supply to MSC, eliminating the...
Private Cost and Social Cost: Externality Curves Explained
Private cost is what firms pay; social cost adds the spillovers they ignore. The MPC, MSC, and MSB curves explain...