Hot econ summer: The soundtrack to Planet Money Summer School
But as cool as it is to bump podcasts at your pool party, we decided that maybe, in some circumstances, songs might be better. So we made a playlist to sneak just a bit more economics into your summer.
"Interest rates going up, seems like there's no value in the buck, meat prices up to stay, utilities are on their way"
When Billy Paul released Let the Dollar Circulate in 1975, the U.S was in a crisis at the intersection of rising inflation and slowing economic growth. Stagflation, as it was later dubbed, created a sense of malaise about the economy, and, for a long time, the government seemed incapable of addressing the crisis.
"I see it, I like it, I want it, I got it"
Our first summer school episode centered on the heated debate between John Maynard Keynes and Friedrich Hayek about the nature of the economy and the role the government should play in it.
In that episode, we asked economist Kristen Broady what her econ song of the summer was. She chose this song from Ariana Grande. "In it, she sings about money and all of the things that it can be used to purchase," Broady says. She says it makes her think of core macroeconomic concepts, like GDP and consumption.
"Sunny days, everybody loves them, but tell me baby can you stand the rain?"
In episode 3 of summer school, we learned about the business cycle: the ups and downs of the economy.
New Edition's 1989 song about finding a love that lasts through adversity is a nice metaphor for the business cycle. The economy's "sunny days" are the periods of expansion that bring job creation, GDP growth, and general economic prosperity. "On a perfect day" we know we can count on a strong economy.
The "bad times" are periods of recession, slowed growth, and lower consumer confidence, when economic conditions force businesses and individuals to confront the same kinds of questions Johnny Gill and Ralph Tresvant had in the song. When the economy is in turmoil, who can we count on? Will our jobs stand by us? Our industries? Our government? Can we stand the rain?
"I don't know what they want from me it's like the more money we come across the more problems we see"
Biggie's posthumous anthem on the perils that come with success has a ready-made macroeconomics application: inflation, a concept that we discussed at length in episode 4.
A prominent theory in macroeconomics is that if the government prints too much money, it will excessively juice demand for goods and services, outstripping the supply of them. That excess demand can cause prices to rise and create — *wait for it* — more problems.
Bonus Homework: Summer of macro still isn't over! The hits will keep coming along with a new episode of Summer School every week! Have a song suggestion? It's still not too late to get on our playlist. Recommend your favorite on social media. Make sure to use #PMSummerschool.
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