Wednesday, March 11, 2015

The Good and the Bad About the Falling Euro

Our last unit this year is on foreign exchange, but considering that we have just been working on monetary policy, the video above and the article below will be helpful for us.  For example the European Central Bank President above starts off by mentioning that the EU will be purchasing securities (bonds) to the tune of 60 billion a month so that money flows into the system and drives down interest rates with the goal of getting the rates down to 2%.

The article from the WashPost mentions that it is good for those going to Europe this summer (you can help me with this by signing up for my in-service on the beautiful coast of Spain where I'll teach you how to create a personalized learning system for your students) since the dollar is going much further than it has gone in the past.  But the reverse is that it means fewer exports and it means that the bond rates in the US are much higher than those in Europe.  The article also discusses tightening and loosening of monetary policy. 

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