I. Theoretical Analysis
1. Find an article from the New York Times, The Economist, The Wall Street Journal, or The Financial Times (or a pre-approved alternate reputable news source) that addresses a concept we have covered in class and interests you. You will need to do a theoretical analysis for a news article, so choose one that is sufficiently in-depth and has some material to discuss.
2. Turn in a typed analysis of their article (double-spaced, four pages maximum). You must also turn in a copy (not just a link) of the article you have chosen.
3. Each analysis should include at a minimum:
i) One paragraph summarizing the article; Be brief!
ii) One paragraph relating the article to theories we have discussed in class; Please draw relevant graphs or write down equations here.
iii) One paragraph for the interpretation; Provide your explanation if the macroeconomic theory does not fit into your article. Is it due to the particular assumption(s) of the model? Can you think of any way to extend or improve the model so that it may explain the events in your article better?
II. Empirical Analysis
1. Alternatively, you may write a short empirical paper using actual macroeconomic data. For example, you may test a negative theoretical relationship between variables X and Y (e.g., unemployment and inflation rates as suggested by the Phillips Curve) by showing their empirical relationship based on the data. The time-series information for X and Y may be available from public sources, such as the World Banks World Development Indicator, IMFs International Financial Statistics, BIS, OECD, or St. Louis Feds FRED. You should try to draw the graph illustrating the relationship using Excel, or (if you can) perform a regression analysis using Excel Data Analysis Tools (see below for relevant document) or any other software of your choice. And then try to link your empirical observation with the theory we learned from class, and evaluate your finding. Again, if you find any gap between theoretical prediction and empirical evidence, try to explain what may lead to such a result.
2. Each analysis should include at a minimum:
i) One paragraph summarizing your hypothesis and theoretical prediction from the model
ii) One paragraph about empirical finding (e.g., what you find from a graph that you draw). You must also include the information about the data source (i.e., where you obtained the data).
iii) One paragraph for the interpretation
For iii) above, try to answer the following questions: Does the macroeconomic theory from a class well represent the actual world? If there is any discrepancy, can you provide any explanations?
III. Grading
Paper will be graded based on:
1. Writing structure as outlined above
2. Appropriateness of analytical methodology
3. Clarity of model implication and your interpretation
PICK THEORETICAL ANALYSIS OR EMPIRICAL ANALYSIS, EITHER ONE IS FINE. IF USING AN ARTICLE PLEASE DISCLOSE/LINK IT TO ME. 3 PAGES MAX.
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