Week 5, Sept. 28, Oct. 2, Money, banking, and interest rates

Readings for Sept. 28

From "The Economics Book".

p. 24 You don't have to barter when you have coins. The function of money. Location 366

p. 26 Make money from money. Financial services, Location 410

p. 30 Money causes inflation. Location 504

New: A recent podcast on the invention of paper money 1,000 years ago, and its meaning for today (transcript here).

* Recommended: A blockchain explainer, the technology behind cryptocurrencies 

Planet Money Summer School podcast: Advertising and Race. The podcast is here; the transcript is here. 

Blackrock Letter to CEOs: do more than just make a profit


In class exercise for Sept. 28, to be finished by Oct. 2

Work with the members of your work group: here is the list of groups and members.

Find the following interest rates for a bank in your home country or here in Spain and post them to this survey form in SurveyMonkey:

1. The interest rate paid to depositors by the bank. (Sometimes banks offer CDs, certificates of deposit, which pay a slightly higher rate for a 6-month commitment by the depositor.)
   
2. The interest rate that the bank charges customers for auto loans (4 or 5 years)
3. The interest rate that the bank charges on home mortgages (hipotecas), on a 30-year mortgage
4. The interest rate that the bank charges its credit card customers. (Don't just use the "teaser" rate or introductory rate.)
   

Use effective interest rate or TIE (tasa de interés efectiva), not nominal interest rate, or TIN (tasa de interés nominal). For example, if the nominal interest rate on a loan is 5%, but the interest is calculated monthly and added on to the monthly payment, the effective rate is 5.12%.