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

T HE O PTIMAL B UNDLE
F ALL 2013:
WEEK OF

O CTOBER 31 ST

E DITOR : C OLE LENNON P RINT EDUCATION COORDINATOR C ONTRIBUTORS : B EN R OWLES , C ADY B OUCHER , C OLE L ENNON , L EAH G ALAMBA , R YAN S OSNADER

Upcoming Events: General Body Meeting: 10/31

FOMC Report: 10/30

Psuea.org EA Homepage psueaeducation.blogspot.com Education Blog

TARIFF TALKS: WINNING OVER THE EU

A new Common External Tariff for the Economic Community of West African States will take effect in 2015. Its purpose is to charge customs on imported goods at a single rate. Makers of the agreement aim to entice the European Union to form an Economic Partnership Agreement, as the European Union is West Africa's most prominent trading partner. The West African States include countries such as Ghana, Nigeria, and other neighboring nations looking to improve economic prospects. Talks of whether these West African countries will implement further measures, among them a single currency, are underway. CL CHECK
OUT THE ARTICLE: REUT . RS /1 G 10642

They seem to be winning them over.

BACK FROM THE BOTTOM

The top three bond-fund managers this year are all based in Athens, not New York or London. The reason? All three executives invested heavily in Greek government debt at the height of the Euro-zone debt crisis, when these bonds hit rock bottom. In recent months, investors have begun to view Greece more favorably. Some government bond prices have more than quadrupled, and this has resulted in large returns for those who purchased Greek bonds at the right time. The top three funds announced returns of 108%, 107%, and 105% over the past 12 months, demonstrating savvy investment strategy. RS

Bond prices are back from the bottom of the Mediterranean, that is.

Check out the Article: on.wsj.com/He4WvM

T HE WAGE LAG IN THIS SERVER IS TERRIBLE

Recent Nobel Laureate Robert Shiller wrote in 1996 that [p]eople dislike inflation because they assume that wages will not keep pace. Indeed, the federal minimum wage does not adjust for inflation, so low -income families often endure the most pain from short term price increases. People living on fixed income also suffer from diminished purchasing power. These individuals need the most help in their economic situations as is, and they would be the ones most affected by price hikes. Given the questionable success of fiscal tightening combined with easy monetary policy over the past five years, this problem discredits arguments for stimulus via inflation. BR
Check out the article: nyti.ms/16Io1Sz

This turtle represents wages.

A S AVINGS C RISIS OF A D IFFERENT K IND

There is a switch from defined benefit savings plants to defined contribution savings plans in the private sector, but there is little evidence that workers have compensated for themselves. A suspected cause is having no extra money to save. Another reason is the notion that they are unaware of the need to save. The current target for savings is around 8% of income, but recent studies show this only gives a 50/50 chance of earning adequate retirement income. To give oneself a 75% chance at adequate retirement, up to 17% of income would have to be saved per year. How are your savings lately? CB
This is simply not enough.

CHECK

OUT THE ARTICLE: ECON . ST /H8 WA E P

U NHAPPY M EALS AT THE G OLDEN A RCHES

Sad news has arrived for fans of cheap burgers and fries everywhere. McDonald's announced that, beginning November 4th, it will change its trademark Dollar Menu to the Dollar Menu and More. The new menu will feature a wider variety of items priced between 1 and 5 dollars. The move seems to be long overdue. The original Dollar Menu existed for over a decade, and inflation has caused a dollar burger in 2000 to cost around $1.30 today. McDonald's appeal has always been price rather than taste; Ronald McDonald might soon find himself out of a job. LG
One would guess that they are not, in fact, loving it right now.

Check out the Article: bit.ly/18Mb3BL