Essay & Data Research Assignment

Essay & Data Research Assignment

20% of total grade on a 100 point base

The goal of this assignment is to create an understanding of the economic events that resulted in the financial crash of 2008 and the subsequent recovery (through today). Our focus will be on the microeconomic effects of the recession and recovery.
We will start by creating a baseline, an understanding of what did happen in the fall of 2008 and its causes (Part I).
The second part of the assignment is to look at microeconomic data from the 12-1-07 to 12-1-14 to illustrate how microeconomic variables were affected during this time. Note that the Great Recession as it is called, began in December 2007 and officially ended in June, 2009.

Part I (25 points)
1.    Watch PBS’s, “Inside the Meltdown.”
2.    Part I of the assignment: summarize concisely, what you learned from watching the video.
Your summary will be framed and highlighted based on the following topics: Too big to fail, Systemic Risk and Moral Hazard. What is your reaction to these terms as they are mentioned in the video? (This an example of critical thinking.) This is meant to be no more than 2 pages. (see Overall Assignment Instructions, below for spacing and font size).  Do not discuss the events in the video in their date order. Discussing the video in date order is not an indicator of what you learned. If you are not sure what this means, please ask.

Part II (75 points)
1.     To understand the effects of the Great Recession, you will perform an analysis of two data sets.
2.    Using Google, go to FRED, which is the Federal Reserve Bank of St. Louis’ massive store of economic data.
3.    Click on sources, then series.
4.    Specify dates 12-01-07 through 12-01-14 and download the data you have chosen to analyze. Download each data set into excel. Note you want monthly data that is seasonally adjusted where available. Each spreadsheet will have 2 columns at this point (date by month, and the associated data). You will have two data sets and two separate spread sheets. Choose from the list below.
a.    Retail sales & Food Serve Sales
b.    Total vehicle sales
c.    Housing starts: New privately owned housing units
d.    Personal consumption expenditure
e.    Real disposable personal income
f.    Existing home sales
g.    Personal savings rate
h.    Civilian labor force rate
i.    Capacity utilization: total Industry
j.    Industrial production Index
k.    All employees: Non farm
l.    University of Michigan Consumer Sentiment (quarterly data)

Part II – Excel portion: % Change Calculation & Graph
You may work together on the excel part of this assignment, only. The goal of this part of the assignment is to apply the theory that we have learned in Chapters 3 & 5 by studying actual data and drawing conclusions about how consumers and businesses are responding as we move from the “Great Recession” to the slow, uneven recovery that we have experienced to date.

Using each data set (#4 above) compute the percentage change (%change – see Utube video if you forgot how we did it in class.) from month to month for the time period. Save the each spreadsheet (you now will have 3 columns per spreadsheet: date, data, %change calculation). (Note: you may consolidate all of the date into one spreadsheet.)

Examine the % changes you have calculated. You will most likely see huge swings (+/-) as the economy went through huge changes during this time.

1.    Now that you have the month to month % changes, we want to graph both data sets on the same graph.  Once you have graphed this data, using the X axis as time and using 2 Y axis. You will create a graph with two lines. Each Y axis is the % change calculation for each data set.  The x axis is time, by month.
2.     Here is a brief description of how to create a chart (graph) with values on 2 Y axis. If you need more detail, there is a good Utube viedo
Select data, click on insert, go to the line chart and click.  Your chart (graph) is created.
To edit the chart (graph), click on the chart, click on chart tools tab, format . Select one of the lines on graph, click on format selection, click on series options(a bar graph icon). Click on secondary axis. You will have a chart (graph) with two different y axis, one for each of your data sets.
Also, right click each line, and add the linear trend line for each data set. This will help with your required analysis.
3.     Important! You will have a graph with 2 Y axis, one for each data set and two lines on the graph. Make sure you label each of the Y axis!
Part II continued – Analysis of Data % Changes & Graph
1.    Based on the choices you made of data (to analyze), prepare excel spreadsheets (one for each indicator) plus one graph with 2 lines showing each data set (#1 & #2 above). 25 points.
2.    Second: Analyze the percentage change data for the 6 year period (including discussing the graph). Summarize your analysis in a 2-3 page discussion. First: define each data set that you chose. Be sure to reference your source (footnote). Why did you chose these data sets? Second: What do you observe that has happened over the last approximately 6 years to each data set? Be specific, why do you think this was happening to your data set? Does the trend line for each data set help you understand what happened?   NOTE: Not including a discussion of the definition of the data sets will result in a 10 point reduction in your score. 25 points.
3.    Third: research the specific economic conditions of this period. Choose three data points for each data set where there are particular large % changes. Mark them on your excel workbook and on the graph(use colors). Using the WSJ, Financial Times, Fortune and other economic/business sources, your goal is to explain what was going on at the time of the large % changes that you noted. Essentially, the articles will explain what you observed at the data points. 25 points NOTE: 2 data sets, 3 articles per data set, 6 articles total.
4.     Fourth: what are your overall conclusions about what happened to the particular data sets you chose? (5 point reduction if not included.)
5.    Attach a copy of the articles (a minimum of 3 per data set) to your analysis. Don’t forget to properly reference the articles. Not including the articles with the assignment will result in a 10 point reduction on your score. Note: not referencing properly (MLA) will result in an additional 10 point reduction on your score. (nos. 2 & 3). If you quote a source, you must footnote it.

OVERALL ASSIGNMENT REQUIREMENTS (PARTS I & II)
6.    Please note the assignment will be assessed for correct grammar, sentence structure and college level writing. Your score will also be reduced appropriately if these requirements are not met.  Proofread your work!!
7.    Please use an 11 font and double space your work.

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