IPE 2012: May You Live in Uninteresting Times

Chalk this one up as a punchline to the old joke about the world's most boring news item:
European Central Bank Leaves Rates Unchanged at 0.75%.

Any sentence that includes the words "central bank" and "unchanged" generally has a doubly soporific effect on people.  That said, we will discuss over the course of this term why some of these items are among those in current events that have the greatest effects on your lives.

Now some of you will not yet know what this headline means, and others of you will not understand the mechanics or perhaps its deeper implications.  But by the end of the term, I hope you will be able to look at this sort of seemingly drab headline about something like a central bank decision (or a consumer confidence report, or news on growth of manufacturing output in China, or a policy proposal about a payroll tax cut) and have some understanding of it, and some intuition that it matters.  When something like a central bank decision hits the news, I hope you will understand what it is, how it works, why it works the way it does, and what it all means.   

In the case of this specific news item, the European Central Bank is trying to figure out what role it should play in getting the European economy jump-started, and it is concerned about the prospects that some European countries (especially Greece and Spain, but others as well) might go bust, and blow apart the common currency, the euro.  That may sound like a problem for Greeks and Spaniards to sort out - along with Germans, Italians, and others - but let me put it another way.  Whether the euro survives in the short-run and in the medium-run will likely have a huge impact on a few little issues, among others:

• whether you have decent prospects for a job if you are graduating in 2013  
• when your parents might be able to retire 
• whether China can continue to bring millions of people out of poverty every year or not
• whether Barack Obama or Mitt Romney is elected in November

An old saying is, "May you live in interesting times".  I think that probably has it backwards for many of the big issues in IPE. Interesting times often means crises, which many of us could do without.  Certainly, people nearing retirement can do with a bit less financial market excitement than we've had in recent years.  And those now at the Democratic National Committee trying to reelect the president could certainly do without interesting times right now.. And the European Central Bank is hoping - really hoping - that they will be able to get by making very boring announcements for the foreseeable future.

You don't need to be able to trace yet all the logic, but the implications of decisions by these sorts of actors (central banks, private businesses, individuals, international institutions, and governments) is one way of understanding what IPE is all about.