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Wine marketing. A 2001 Danish study published in the Archives of Internal Medicine casts significant doubt on suggestions that adults who drink wine have higher levels of "good" cholesterol and fewer heart attacks. These re- searchers followed a group of individuals born at a Copenhagen hospital between 1959 and 1961 for 40 years. Their study found that in this group the adults who drank wine were richer and better educated than those who did not.
a) What kind of study was this?
b) It is generally true that people with high levels of edu- cation and high socioeconomic status are healthier than others. How does this call into question the supposed health benefits of wine?
c) Can studies such as these prove causation (that wine helps prevent heart attacks, that drinking wine makes one richer, that being rich helps prevent heart attacks, etc.)? Explain.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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