Seminar in Macroeconomic Theory
economics homework two
to answer the questions, questions 1,2,3,and 5 i have already provided the graphs. please just write one paragraph to answer each question, follow the example question and use one source for each question apa style. for question 4 please follow the instructions to answer it and include the date.
questions 123,5 should take up two pages and questions 4 one page writing part and the date. total should be 3 pages.
please use economic terms and formals to answer the questions.
Seminar in Macroeconomic Theory
Directions: Use the St. Louis Federal Reserves FRED tool unless otherwise noted to graph data.
Answer all questions in complete and well written sentences. Answers must be free of grammar and spelling errors. Be concise in your answers; half a page to one page in length (not counting graphs), double spaced; anything more or less will be penalized.
This is individual work. Identical answers will be punished with a failing grade for the entire assignment and academic misconduct charges.
Assignments should be turned in in PDF format. The most efficient way is to create a Word document, import your graphs from FRED, and save it as a PDF. It is the responsibility of the student to ensure the file can be opened. If I can’t open it it’s a zero. The end result should look like the “A Level” answer on the Example Answer page, and not the F-level
Each data assignment is worth 50 points; each question is worth 12.5 points.
Above 45 points : A “perfect work”
Above 40 points: B “above average work”
Above 35 points: C “average work”
Above 30 points: D “below average work”
Below 30 points: F “Failure.
Data Assignment 2 due February 10th: The Money Illusion
1) Graph the Ten Year Treasury Bond Rate (tag GS10) from Quarter 1 1990 to Quarter 3 2014. On the same graph, insert the Effective Federal Funds Rate (tag FEDFUNDS). How does the long term bond rate behave just before, during, and just after the NBER defined recessions? Identify and describe any long term trends.
2) Graph the 3-Month Treasury Bill Secondary Market Rate (tag TB3MS) from Quarter 1 1990 to Quarter 3 2014. On the same graph, insert the Effective Federal Funds Rate (tag FEDFUNDS). How does short term bond (bill) rate behave just before, during, and just after the NBER defined recessions? Identify and describe any long term trends.
3) Graph the Trade Weighted US Dollar Index: Major Currencies exchange rate (tag TWEXMMTH) from Quarter 1 1990 to Quarter 3 2014. How does the trade weighted exchange rate behave just before, during, and just after the NBER defined recessions? Identify and describe any long term trends.
4) Go to the Center for Financial Stability’s “Advances in Monetary and Financial Measurement” web site (http://www.centerforfinancialstability.org/amfm_data.php). Download the monthly data for the Divisia M4 aggregate from the site by clicking “Download in Excel” and “All of the Divisia M3, M4- and M4 Aggregate data in an Excel sheet here”. Use the following tutorial to convert the monthly data to quarterly data in Excel from this St. Louis Fed tutorial: http://research.stlouisfed.org/tips/200303/. To calculate the percentage change from year ago use the growth rate equation: . Graph the quarterly growth data for the Divisia M4 aggregate from Quarter 1 1990 to Quarter 3 2014. To insert recession bars, download the NBER recession indicator series from FRED to Excel and line up the proper quarters. Insert the NBER recession data into your Divisia M4 graph. Right click the NBER recession series and change it to a bar graph on a secondary axis. Adjust the left axis and the size of the bars to create a “gray shading” for your graph. Now: How does the Divisia M4 aggregate behave just before, during, and just after the NBER defined recessions? Identify and describe any long term trends.
5) BONUS QUESTION: Question can replace the lowest scored question from either assignment, however total scores will not exceed 100. Graph the M2 Money Stock (tag M2SL) from Quarter 1 1990 to Quarter 3 2014. Convert the graph to Percentage Change From Year Ago. Describe the differences between the M2 money stock growth and Divisia M4 money growth just before, during, and after recessions.