Retrieve the GDP-deflator and the annual unemployment series for the period 1959 to 2000. These data are available in the Statistical Appendix of the Economic Report of the President. Use the GDP-deflator series to compute the annual rate of inflation, us

CTW Writing Assignment 3

Macroeconomics (CTW)

Summer 2012

This writing assignment is due on the last day of class (Monday, July 25th).

Retrieve the GDP-deflator and the annual unemployment series for the period 1959 to 2000. These data are available in the Statistical Appendix of the Economic Report of the President. Use the GDP-deflator series to compute the annual rate of inflation, using the following formula {πt = [(GDP-deflatort – GDP-deflatort-1)/GDP-deflatort-1]×100}, where πt is the rate of inflation in year t (= 1960, ..., 2000). Graph these two series for the periods 1960 to 1970, 1970-1980, 1980-1990, and 1990-2000 in four separate scatter plots, with the rate of inflation on the vertical axis and the rate of unemployment on the horizontal axis. Read chapter 13 of your textbook, and in the light of that discussion address the following question: Is there evidence in your graphs of a short-run trade-off between inflation and unemployment in each of these periods? Is this suprising?

Guidelines for the policy brief

The policy brief should be typed, using 1.5 spacing, Times New Roman 12 point font. All sources must be clearly documented with both an in-text citation and a bibliographic reference. The report should not exceed 3 pages, excluding tables and figures at the end of the brief. All tables and figures should appear at the end of the brief, and the source of all data used to construct the figures should be provided directly beneath the figure. Please provide pages numbers no each page.

A. Title

A1. Provide an appropriate title that is relevant to the assignment and ensure clarity so as to convey the main purpose of the policy brief.

A2. Use capitalization rules in the title.

A3. Please include the author’s name, title of the policy brief, and date of the report on a cover page to the policy brief.

B. Analysis (Descriptive paragraph)

B1. Use formal writing style and not colloquial language.

B2. Provide an introductory paragraph and a concluding paragraph to your brief. The introductory paragraph should motivate the report and summarize the major findings of the report.

B3. In addition to explaining the advantages and disadvantages of another round of fiscal stimulus to avert a double dip recession, the report should make a clear and well defended recommendation regarding another stimulus bill. You may want to weigh whether any stimulus should be in the form of increased expenditures and/or a tax cut.

B4. The policy report should make specific references to the figures provided in the report.

B5. Figures should be numbered (Figure 1, Figure 2, …) and should appear on separate pages at the end of the policy brief.