Take a look at the news and you will see a constant barrage of macroeconomic data. It may be an unemployment report, a new GDP growth estimate, or a report on the Fed decision on interest rates. You don’t have to look very hard to see it because new news comes out almost daily.
Any one piece of information might not be that important, but several key indicators telling you the same story might be a harbinger of the future economy. For you, it might not matter at all. But for many, correct predictions about the future path of the economy allow assets to be reallocated more efficiently.
For example, suppose you have $1 million in your retirement account. It is in the stock market right now. If you think a recession is coming, you may want to start shifting your assets towards a safer vehicle. Of course, you don’t want to just randomly move assets around because that is likely to produce sub par results. You need to look at data about the economy to make wise decisions.
Because data about the economy can be used by many entities, the government (or better, agencies within the government like BLS and BEA and the FED) makes available a slew of information about the economy. They measure various aspects of the economy like unemployment, wages, growth rates, goods orders, and many more. In addition, various private organizations make available some data that may be used to help people understand what’s happening in the economy.
In this class, you will be following some of this data. You will learn about the reports and how to interpret the movements in the trends. After a few months of following the reports and reading analysis, you too, will be able to understand the basics of how the macroeconomy works.
The paper has two parts:
- Seven short bi-weekly summaries of the most recent economic data to be released.
- A final paper that summarizes the data over the course of the semester and a prediction about the economy one year from now.
Every two weeks you will submit a short summary of the most recent economic data to be released. You will answer these standing questions each week and submit it via Canvas:
- What economic indicator was released? What was the headline number?
- Explain what the indicator is measuring and how it’s measured.
- How is this indicator supposed to be helpful in understanding the economy’s behavior?
- What are people saying about it? You need to consult the news for this one.
- What are your thoughts? What strikes you to keep an eye on for later? Do you disagree or agree with other people?
Most weeks there are several indicators that reported. You report on at least TWO (2) for each bi-weekly assignment. They can be repeated, especially for important ones like GDP, unemployment and inflation. But you must have a good sampling of different indicators over the semester that, as a group, are broadly representative of the macroeconomy.
At the end of the semester, you will submit a paper summarizing the macroeconomy during the semester that address the following prompt:
“Describe the current state of the US economy and make a prediction about the state of the economy in one year from now. Back up your claim with data and analysis.”
I encourage you to go as deep as you like with this project. You can write a white paper, or make it more like a newsletter. You can make charts, investigate further, and even try to interview some experts if you want. Here are the minimum requirements:
- The final paper is at least 5 pages in length.
- It is 12 pt font and uses 1.5 line spacing.
- It includes references when necessary (any formal formatting style is ok)
This paper is worth 10% of your course grade.
70 % of this paper is the weekly summaries and 30% is the paper itself.
You paper will be graded using the following criteria:
For the bi-weekly summaries:
7 summaries @ 10 points each
10 points = all 5 questions (above) answered for at least 2 indicators
7 points = all 5 questions answered for 1 indicator
0 points = all other submissions or submissions that have completely answered the 5 questions but are lacking with regard to college level content, clarity and/or development of personal reflections.
For the final paper:
30 points = all of the 3 minimum criteria (above) met; a description of the current US economy using GDP, inflation, interest rates, unemployment; a description of other economic indicators; a prediction of the economy 1 year from now based on the data provided in a clear and consistent college-level paper.
20 points = all of the 3 minimum criteria (above) met; a description of the current US economy that is only partially complete and/or does not use GDP, inflation, interest rates, unemployment and other indicators in a fully developed way; includes a prediction of the economy 1 year from now based on the data provided.
0 points= all other submissions or submissions that are severely hindered by language usage issues, logical inconsistencies, or incorrectness.
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