Digest

This episode of Planet Money's Indicator tackles listener questions about the economy. First, they address a listener's observation of discounted chicken prices despite bird flu news. While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases. Next, the episode explores the idea of regional interest rates. While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions. Finally, the episode examines whether election spending is an indicator of economic health. Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns. The episode concludes by noting that the increased competition in close races, like the current one, often leads to even higher spending.

Outlines

00:00:00

Chicken Prices: A Local Phenomenon or a Larger Trend?

This Chapter explores a listener's observation of discounted chicken prices despite bird flu news. While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases.

00:00:13

Regional Interest Rates: A Sharper Tool for the Fed?

This Chapter examines the idea of regional interest rates. While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions.

00:00:35

Election Spending: An Indicator of Economic Health?

This Chapter investigates whether election spending is an indicator of economic health. Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns. The episode concludes by noting that the increased competition in close races, like the current one, often leads to even higher spending.

Keywords

Q&A

• Why are chicken prices seemingly cheaper despite bird flu?

  While chicken prices are still up from a year ago, the high beef prices due to smaller cattle herds and drought make chicken appear cheaper in comparison. Additionally, lower feed prices for chicken are contributing to some price decreases.

• Should the Federal Reserve use regional interest rates?

  While the Federal Reserve uses a single interest rate to guide the economy, Monica Deval, a senior fellow at the Peterson Institute for International Economics, argues that a centralized rate is crucial for providing a clear signal to the market. However, she acknowledges that interest rates are localized in practice, with banks adjusting borrowing costs based on local market conditions.

• Is election spending an indicator of economic health?

  Michael Kang, a law professor at Northwestern Pritzker School of Law, suggests that while economic strength might influence individual donations, the primary driver of increased spending is deregulation of campaign finance, particularly the rise of super PACs and their ability to spend unlimited funds on political campaigns.

Show Notes