NOVA
SOUTHEASTERN UNIVERSITY
H. Wayne Huizenga School
of Business and Entrepreneurship
ECN 3025 – Intermediate Macroeconomics
Data
Exercise 2 Robert Hall On Economic Indicators
This
exercise is designed to assess your ability to manipulate and analyze data in
accordance with Course Competency: Locate, analyze, and interpret macroeconomic
data.
Instructions:
·
Download
and Read Professor Robert Hall, “Why Does the Economy Fall to Pieces after
a Financial Crisis?” http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.4.3
·
Put all of your work in one file;
·
Write your name in the header;
·
We need to see your work in Excel (i.e.,
formulas). Do not copy and paste numbers
from your original worksheet to a new worksheet. When submitting, make sure that the cells in
your worksheet show formulas.
·
After you finish the assignment, name your file LastnameDE2.xls (or .xlsx, depending
on the version of Excel). Note that you
do not have to write the .xls suffix
by yourself – Excel will do it automatically, and
·
Upload it to the Assignment Section of the
Blackboard.
Background:
Over the business cycle, many macroeconomic data series move
together. The investment component of
GDP is most volatile, and government expenditures typically increase during
recessions to offset declines in private-sector expenditures. However, each business cycle is caused by
different reasons, and therefore, each business cycle is different.
Assignment:
You work as an analyst at an investment bank. The CEO of the firm just came back from the
Annual Policy Symposium at Jackson Hole.
He tells you that he listened to the presentation by Professor Robert
Hall, who chairs the National Bureau of Economic Research’s Recession Dating
Committee. The CEO hands you the paper
by Professor Hall, “Why Does the Economy Fall to Pieces after a Financial
Crisis?” (http://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.4.3)
and wants you to update the Figures 1 and 4 in the paper. Specifically, Figure 1 plots the change of
components of GDP from the second quarter (April-June) of 2008 on, and Figure 4
plots the yield spread between 20-year Treasury bond and Baa corporate bond
from January 2008 on.
a.
You have to update the Figures 1 and 4 using the most
recent data available. Use Excel and
create graphs similar to the Figures 1 and 4 using data up to the most recent
period. All data series are available at
St. Louis Federal Reserve Bank’s FRED® (http://research.stlouisfed.org/fred2/). Download appropriate series in Excel.
·
To download data from FRED®, you have to
register.
·
You have to use “real” series for all
GDP-related data. They are available
quarterly.
·
You need the following quarterly series for
figure 1:
Consumption:
Real Personal Consumption Expenditures: Nondurable Goods
Real Personal Consumption Expenditures: Services
Investment:
Real Personal Consumption Expenditures: Durable Goods
Real Gross Private Domestic Investment, 3 Decimal
Government:
Real Government Consumption Expenditures & Gross Investment,
3 Decimal
Net
Exports:
Real Net Exports of Goods & Services, 3 Decimal
·
Use the monthly series for the interest rates
(figure 4):
20-Year Treasury Constant Maturity Rate
Moody's Seasoned Baa Corporate Bond Yield
·
Since the oldest data you need for this exercise
is from January 2008. You may want to
delete data prior to January 2008 to simplify your worksheet
·
You need to combine worksheets for figure 1 and
figure 4 into one file. To combine two
files into one, use “Home-Format (Cells)-Move or Copy Sheet” and move one sheet
to the other “book.”
Download and Read
