Annotations

Heavy Constraints on a "Weightless World"? Resources and the New Economy(Jonathan Perrington, The American Journal of Economics and Sociology, Jan 2006)
This article was published in the American Journal of Economics and Sociology. It addresses production trends that have been seen in industrialized countries since the late 1990's. Developed countries, namely the United States, have seen a shift from material production to service oriented production in recent years. The traditional thought is that a decrease in material production will result in decreased economic activity, and until the late 1990's this was true. In recent years the United States has seen decreased material production, but increased economic growth. This phenomenon was first seen with the emergence of the computer age. Goods such as computer software and programming are greatly contributing to the economy without physically producing anything. The need for information and technology is driving developed countries toward service oriented jobs. This article focuses on this unique situation and some of the factors and causes. The author also goes on to discuss the negative effect that this is having on developing countries who traditionally supply raw materials. Developed countries are now using human resources more than physical resources. The Unites States' reduced necessity for these resources has slowed economic activity in the countries that provide those resources. This article gives great insight into current conditions in the global economy.

Consumer Price Gauges Rise More Than Expected(Jeremy W. Peters, New York Times, Feb 22 2007)
The article "Consumer Price Gauges Rise More Than Expected" was written by Jeremy W. Peters and published in the New York Times. The Federal Reserve expected inflation to be low this year, but price increases in January have caused many analysts to become skeptical. During the month of January 2007 prices for several goods including fruit and hotel rooms increased dramatically. The rate of core inflation, as represented by the consumer price index, jumped from .1 percent in December to .3 percent in January. The effect of this inflation has already been seen in the market. Many investors have begun to push stock prices lower in preparation for interest rate changes. The Federal Open Market Committee met and decided that a change in interest rates was not necessary. The article goes on to explain relevant benchmarks in inflation rates. Anything above 2 percent raises concerns for the Federal Reserve. As long as rates are below this mark they will not consider raising or lowering interest rates. Inflation is currently at 2.1 percent, but the Federal Reserve has decided that this is not large enough to worry about. This article may be helpful to anybody involved in stock trading, banking, and real estate. Interest rates and inflation can effect all of these areas.