T HE P ENNSYLVANIA S TATE U NIVERSITY E CONOMICS A SSOCIATION P RESENTS :

T HE O PTIMAL B UNDLE
F ALL 2013, I SSUE 2 Upcoming Events: General Body Meeting: 9/12
E DITOR : C OLE LENNON P RINT EDUCATION COORDINATOR C ONTRIBUTORS : COLE LENNON

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CASHING IN: IS HOLDING CASH COSTLY?

Even cash has its costs. New research indicates that lowerincome people find accessing cash difficult. This group spends far more time trying to acquire it, and obtaining cash can also be costly in other ways. Lower-income earners are more likely to use check-cashing services with high add-on charges, while wealthier individuals simply use bank accounts with little to no fees. These costs are not frequently talked about, but it's time we looked at financial security not just by how much money we have, but how easily we can access it.CL (September 9th, 2013)
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THE DOW JONES NEW LINEUP

The Dow Jones Industrial Average is changing the list of firms that it tracks. Bank of America, Alcoa, and HewlettPackard will be removed from the index. Nike, Visa, and Goldman Sachs will be joining it. Adding the financial powerhouses shows the indexs increasing tilt toward financial service companies. This change makes sense given the increased amount of financial activity in the overall economy. The Industrial Average remains an imperfect barometer for general economic health, but changing the list of companies is an attempt to adjust for the growing presence of finance. CL (September 10th, 2013)
More Info: reut.rs/15OnOxg ; 1.usa.gov/13P6fJS

O IL S LICK : S YRIA AND O IL M ARKETS

As an intervention in Syria is becoming less likely, oil markets are reacting. Oil prices are now scuttling back down. This trend is intriguing, as Syria doesn't export much oil by itself. Concerns about a wider conflict likely play a role in determining oil prices, while an alternate explanation concerns diminishing spare capacities of oil. Distributors usually use idle resources in times of crisis, but spare capacity is decreasing. Oil markets are less able to deal with disruptions as a result, making the potential decision to go to war increasingly risky.CL (September 9th, 2013)
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A GE AND M ONETARY P OLICY

Both conventional and unconventional monetary policies are keeping a struggling U.S. economy afloat. An issue with these policies actually concerns how aging populations cripple the effectiveness of them. The problem is that the elderly will likely be creditors that dont react to interest rate changes. The resulting effect on unemployment and inflation is statistically significant in the long run, with monetary policy becoming less effective in aging economies. To accommodate this shortfall a more dovish approach to monetary policy and a renewed focus on fiscal policy could be useful. Policymakers should consider taking these suggestions to aid the economic recovery.CL (September 7th, 2013)
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A R ECOVERY T HAT W ASN T : A L ACK O F G OVERNMENT J OBS

Economic recovery in the U.S. is marked by private sector growth but public sector cutbacks. Government payrolls have shrunk by 752,000 jobs since early 2009. The previous four presidencies saw an increase in public sector employment. Most public sector jobs lost today are at the state and local level, but the federal government has also cut back on public sector jobs. Holding public sector jobs constant since early 2009, the recovery would be progressing with 25% more jobs. With more public sector job growth, a better job recovery could have occurred after this Great Recession.CL (September 9th, 2013)
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