Principles of Macroeconomics

Purpose:	To apply the macroeconomic models discussed in this course to analyzing the state of the U.S. economy today and based on your analysis to consider the merits of recent Federal Reserve policies.
Assignment:	Examine data on the macroeconomic performance of the U.S. economy over the 1990s. Most of the data on the main macroeconomic variables can be found in the end pages of your textbook. One source for more recent data is the Economic Report of the President . Present graphs showing the behavior of the key macroeconomic variables. Peruse the Federal Reserve's website and read the minutes of the most recent FOMC meeting (under "Monetary Policy" and then "FOMC") in which the FOMC explains the reasoning behind its recent decisions to undertake expansionary monetary policy. You may also want to read recent testimony to Congress by Alan Greenspan or look over the Fed's most recent report to Congress. Explain using appropriate graphical model(s) why the Fed adopted the policy it did. Do you agree with the Fed’s recent actions? Explain why or why not. You may want to find newspaper/magazine sources that are critical or supportive of the Fed’s actions.
Format:	The paper should be 3-5 typed and double-spaced pages. Graphs analyzing the economy and time-series graphs must be clearly displayed, properly labeled, and generated using Excel. All graphs should be attached on separate pages and referred to by number (Figure 1, Figure 2, etc) in the body of the paper. They do not count against the page limit.
Criteria for grade:	Coherent application of macroeconomic models. Cause and effect relationships should be clear. Cogent explanation of why you agree or disagree with the Fed’s policy. Command of Excel graphing. Command of the generic conventions of the English language. Command of the terminology of economics. Clear organization.
Honor Code:	Feel free to discuss the assignment with classmates. The final written product, however, should be your own.