Fin paper revised

Details for Economic Analysis due October 13th

The economic and market analysis part of the paper focuses on a strange US economic recovery and recent questions of how the political environment may or may not lead the US toward better economic growth. Much of what we have experienced over the last several years of “recovery” is not typical in the US. You should not analyze the cause and effect of the 2008-09 recession or any prior periods, but can include those issues that are still impacting the economy today. You should NOT write this paper as a quarter by quarter breakdown of what occurred but rather an overall trend analysis for the year. For example, the first and second quarters of the year were weak and then the economy picked up during the rest of the year. What caused the slowdown? Where has the renewed strength come from?

The requirements are as follows:

i. Include a detailed discussion of the components that affected overall GDP growth inter-relating cause and effect analysis. This assessment should focus on consumption, investment, government spending and net trade (with the largest sections on C+I)

a) C+I section should include a detailed analysis of the overall trend during the 2015 calendar year (leading in from year end 2014), including significant global events that may have impacted each in terms of its effect on GDP. For example, how have Europe and China impacted US growth? How does employment impact consumption and investment? Has wage growth kept pace with inflation and the economy? Has inflation impacted spending in this time? Political environment? Analyze specific macroeconomic variables that reflect C and I.

b) Net X section should focus on overall trends in terms of what is helping the US have a positive versus negative contribution to GDP or visa-versa

c) Government section includes discussion on regulatory and fiscal changes that have impacted both government spending as well as consumer/ business investment

ii. Monetary policy: Discuss reasons why the Fed acted or didn’t act, including the Fed’s dual mandates, inflation (show trend of core versus nominal) & unemployment (payrolls, wages and the rate). State specific policy changes enacted during this time.

iii. Include a discussion on the performance of the financial markets.

a) Analyze a large cap equity benchmark such as the S&P 500 and either the NASDAQ or Russell 2000 to assess why the stock market has performed so well

b) Analyze a UST benchmark such as the BofA ML Treasury and/ or the YTM of the 10-year UST – keeping in mind total return vs YTM to reflect the market’s perspective on the economy during this time.

c) State the annual % total return of each index. Look at the trend throughout the year giving strong versus weak performing industries for equity section.

iv. Analysis should include numerical data (tables or graphs work well) over this time paper as well as a written analysis discussing trend, important events, cause and effect

b. Year 2016: Same analysis

c. Year 2017: Same analysis – Although we do not have the actual Q3 GDP report yet, we do have data regarding consumer spending, inflation, unemployment, monetary policy, etc. for the quarter. By the time you hand in your final paper, you will add in the actual GDP number for the quarter. Must include stock and bond market performance for the quarter as well.

All written work must be double spaced, with footnotes not endnotes and a complete bibliography . Reading other economists perspective is great, but DO NOT copy word for word someone else’s description of the economy/ market. Specific forecasting is not part of this first section.

Sourcing Requirements

a. You cannot use sources such as Wikopedia, Investopedia, blogs etc.