Friedman Chapter 7

The notes for Chapter 7 of The World is Flat can be found here. I will post those for Chapter 8 after class on Friday.

Friedman - Chapter 6

My notes - in crude form - can be found at http://facultyweb.anderson.edu/~eadulaney/Flat_6.doc. I'll post my notes on subsequent chapters as well should they be of any use.

TIME and Milton Friedman

Time Magazine has a great article on the passing of Milton Friedman that can be found at http://www.time.com/time/magazine/article/0,9171,1561157,00.html. Just as Keynes can be thought of as the father of post depression economics, Friedman can arguably be thought of as the influential economist since that time.

Moskow's Speech...

...in Muncie is similar in topic to the one delivered a few days ago in Chicago. The transcript of the speech can be found at http://www.chicagofed.org/news_and_conferences/speeches/2006_11_06_outlook.cfm. Of particular interest is the discussion of the labor force and outlook on inflation.

Chapter 25 slides

The slides used in the discussion of Chapter 25 are posted and can be found at http://facultyweb.anderson.edu/~eadulaney/2010chap25.ppt.

Federal Reserve Forecasting Luncheon

FYI:

BSU is hosting a Business Forecasting Roundtable luncheon on Wednesday (http://www.bsu.edu/cob/bfrlrsvp/). Speaking will be Michael Moskow, president of the Federal Reserve Bank of Chicago.

Moskow, who also is a member of the Federal Reserve's open market committee, will discuss the prospects for continued economic growth in 2007.
"With the housing market contracting, the malaise of the Big 3 automakers and the hemorrhaging trade deficit, there are plenty of balls up in the air for those who are busy trying to steer monetary policy into the future," said Patrick Barkey, director of Ball State's Business Forecasting Roundtable. "Don't miss this chance to hear from, and to perhaps challenge, those who are making the decisions we all must live with."

Financial Calculations to Know

Click on the links below for each definition/formula:

Present Value

Future Value

To Find Interest Rate:
Set the two values equal and solve, given the number of years
For example:
If $10 today is equal to $15 in 4 years, then:

1. 10=15/(1+i)^4
2. 10(1+i)^4 = 15
3. (1+i)^4=1.5
4. 1+i=(1.5)^.25
5. 1+i=1.1067
6. i=.1067
7. i=10.67%

DON’T FORGET RULE OF 72 and RULE OF 128

Example 1:
Your grandmother deposited $100 in a savings account for you on your first birthday. She stipulated that the money was to remain in the account until your 21st birthday. That day has now arrived. The savings account has paid 5.25 percent interest compounded annually since the money was deposited. How much money is now in the account?
PV=$100
i=.0525
n=20
100(1.0525)^20 = $278.25

Example 2:
You hear of a surefire money-making scheme which promises that if you invest $1,000 today, you'll receive $2,000 in 10 years. Alternatively you can deposit the $1,000 in a 9.25 percent insured savings account. You wonder what the present value of the promised $2,000 is worth assuming the 9.25 percent interest rate. In other words, is the scheme better than just depositing the money in the savings account?
FV(10) =$2,000
i=.0925
n=10
2000=1/(1.0925)^10 = $825.69
(You are better off putting the money in at the 9.25% interest.)

What rate does the scheme pay? 7.18%