Crisis Chronicles: The “Not So Great” Re-Coinage of 1696

James Narron and David Skeie

In the late 1600s, England operated a bi-metallic monetary system of high-value gold coins and lower-value silver coins. In the early 1690s, however, the market price of silver began to rise at a time when the mint price of gold was higher than the market price. Thus, gold bullion was flowing to the mint while silver coins were flowing to the commodity markets. By 1695, nearly half of the silver specie was missing from coin in circulation in England as coins were “clipped” (shaved) with the result that their face value no longer reflected the metal content. Ironically, low-weight coin was still accepted for tax payments. In this post, we recount England’s efforts to remedy the “ill state of the coin of the kingdom” during the re-coinage of 1696.

Historical Echoes: The Changing Face of Education in the United States

Rajashri Chakrabarti, Amy Farber, and Max Livingston

In two recent posts on New York and New Jersey and a series of interactive graphics, we explored the effect of the Great Recession on school district finances. But if we expand our scope a little wider, we see that school finances have been changing significantly over the past century. This makes sense, as schools have also changed a lot. Although we may take our current system for granted, schools at the turn of the century looked rather different from their present-day counterparts. As ideas of how to educate students changed, and as education became more common in the population, momentous changes took place not only in how education is imparted, but also in how much education costs and how it’s funded.

Catching Up or Falling Behind? New Jersey Schools in the Aftermath of the Great Recession

Rajashri Chakrabarti and Max Livingston

Today’s post, which complements Monday’s on New York State and a set of interactive graphics released by the New York Fed earlier, assesses the effect of the Great Recession on educational finances in New Jersey. The Great Recession severely restricted state and local funds, which are the main sources of funding for schools. To help avoid steep budget cuts to schools, the federal government allocated $100 billion for education as part of the American Recovery and Reinvestment Act of 2009 (ARRA), also known as the stimulus. The stimulus money was meant to provide temporary relief to strained state and local budgets. However, after the stimulus funds were exhausted, the economy was still weak and school districts were faced with large budget shortfalls.

Waiting for Recovery: New York Schools and the Aftermath of the Great Recession

Rajashri Chakrabarti and Max Livingston

A key institution that was significantly affected by the Great Recession is the school system, which plays a crucial role in building human capital and shaping the country’s economic future. To prevent major cuts to education, the federal government allocated $100 billion to schools as part of the American Recovery and Reinvestment Act of 2009 (ARRA), commonly known as the stimulus package. However, the stimulus has wound down while many sectors of the economy are still struggling, leaving state and local governments with budget squeezes. In this post, we present some key findings on how school finances in New York State fared during this period, drawing on our recent study and a series of interactive graphics. As the stimulus ended, school district funding fell dramatically and districts across the state enacted significant cuts across the board, affecting not only noninstructional spending but also instructional spending—the category most closely related to student learning.

Preparing for Takeoff? Professional Forecasters and the June 2013 FOMC Meeting

Richard Crump, Stefano Eusepi, and Emanuel Moench

Following the June 18-19 Federal Open Market Committee (FOMC) meeting different measures of short-term interest rates increased notably. In the chart below, we plot two such measures: the two-year Treasury yield and the one-year overnight indexed swap (OIS) forward rate, one year in the future. The vertical line indicates the final day of the June FOMC meeting. To what extent did this rise in rates following the June FOMC meeting reflect a shift in the expected future path of the federal funds rate (FFR)? Market participants and policy makers often directly read the expected path from financial market data such as the OIS contracts. In this post, we take an alternative approach by looking at surveys of professional forecasters to assess how expectations changed.

Crisis Chronicles: Tulip Mania, 1633-37

James Narron and David Skeie

As Mike Dash notes in his well-researched and gripping Tulipomania, tulips are native to central Asia and arrived in the 1570s in what’s now Holland, primarily through the efforts of botanist Charles de L’Escluse, who classified and spread tulip bulbs among horticulturalists in the late 1500s and early 1600s. By the early 1630s, the tulip was a fixture in Dutch gardens. But Tulip Mania didn’t begin until the summer of 1633, when a house in Hoorn was exchanged for three rare tulips and a Frisian farmhouse was traded for a number of tulip bulbs. The lure of profit enticed novice florists to enter the tulip trade with minimal investment and small parcels of land, harkening back to the days of farmers taking up coin clipping during the Kipper und Wipperzeit. In this edition of Crisis Chronicles, we exchange the trading floors of today for the alcohol-fueled exchanges of the past as we dig up Tulip Mania.

 

Consumer Confidence: A Useful Indicator of . . . the Labor Market?

Jason Bram, Robert Rich, and Joshua Abel

Consumer confidence is closely monitored by policymakers and commentators because of the presumed insight it can offer into the outlook for consumer spending and thus the economy in general. Yet there’s another useful dimension to consumer confidence that’s often overlooked: its ability to signal incipient developments in the job market. In this post, we look at trends in a particular measure of consumer confidence—the Present Situation Index component of the Conference Board’s Consumer Confidence Index—over the past thirty-five years and show that they’re closely associated with movements in the unemployment rate and in payroll employment.