Home Economics

This helpful cheat sheet on international finance terminology is for all my classmates studying hard (or hardly studying) for qualifiers.

• Money Supply. According to Furth's Theorem, this always converges to zero.
• Extending Domestic Credit. This is when your wife lets you play poker with the bachelors on Thursday night.
• Balance of Payments Crisis. Results from too many such poker nights.
• Foreign Reserves. The qualms you feel about visiting Eastern Europe at this time of year.
• A Single Riskless Bond. Your marriage at age 60.
• Second Generation Currency Crisis. Your six children all ask for money at the same time.
• Covered Interest Parity. You have crushes on two different girls, but neither one knows about the other.
• Uncovered Interest Parity. They found out.

With apologies to Alan.