Monetary policy Dwon Tagger 1980 - 1990 SNHU 5 AUG 18 Monetary Policy ❖ The federal reserve has four main agendas in the economy of the state those are:  Price stability  High unemployment  Economic growth  Financial market stability ❖ During the 1980-1990 period the US economy was experiencing inflation and the effective policy tool was Anti-Inflation Policy. ❖ The policy makers made use of the tax cut policy to ensure that the low income earners were exempted from paying taxes (Borrallo & Vallls, 2016). ❖ To achieve the anti-inflation policy the government had to decrease the money supply without constraining supply Monetary Policy Action  The government used the tax cut policy as an expansion strategy.  It wanted to expand the economy that was stagnating and to improve in its performance.  Since it was a recession period where the government was experiencing high inflation and at the same time economy stagnation.  It had to apply the low money supply to control the inflation and the tax cutting to grow the economy (Arestis & Karakitsos, 2010).  From 1980-1987 the government initiated the reserve policy, where the banks had a minimum deposit that they were required to maintain in their banks. Monetary Policy Action  Commercial banks and the central bank are the key players in implementing the policies that are initiated by the federal open market committee.  The committee had directed on the application of the borrowed reserve targets, that made banks to borrow money so as to attain the minimum deposit level recommended for them (Tanzi, 2015).  The use of the borrowed reserved target was applied and made the banks stable as well as the economy began to grow rapidly during that period. Monetary Policy Impact ❖ The monetary policies that were developed during the 10 year period had various impact to the economy and the lives of the people. Some of the impacts realized were:  Alternative source of loans for banks  Nominal wage increases and profits  Economic stability returned to normal in late 1980s and early 1990s  Rapid money expansion ❖ Such impacts were as a result of the changes in the financial policies that were made every period and in consideration of the current state of the economy of the country and the rate of money supply (Gerba & Hauzenberger, 2013). References  Arestis, P., & Karakitsos, E. (2010). The Post 'Great Recession' US Economy. doi:10.1057/9780230276109  Borrallo, F., & Vallls, J. (2016). The Effects of US Unconventional Monetary Policies in Latin America. SSRN Electronic Journal. doi:10.2139/ssrn.2752888  Gerba, E., & Hauzenberger, K. (2013). Estimating US Fiscal and Monetary Interactions: From Volcker Chairmanship to the Great Recession. SSRN Electronic Journal. doi:10.2139/ssrn.2347699  Tanzi, V. (2015). Fiscal and Monetary Policies During the Great Recession: A Critical Evaluation. Comparative Economic Studies, 57(2), 243-275. doi:10.1057/ces.2014.36 Fiscal Policies D W O N TA G G E R ECO 202 2 9 J U LY 2 0 1 8 Fiscal Policies  There are various policies which were at play in America from 1980-1990.  The Depository Institutions Deregulation and Monetary Control Act (1980) is among the policies which were put in place (Economics USA: 21st Century Edition, n.d).  The policy was intended to ensure that the methods through which banks operated were reformed.  The Monetary Control was also intended to oversee the processes relating to deregulatio. Fiscal Policy Actions  The policies were intended to change how banks conducted their business.  Initially members could conduct transactions without worrying about the expenses that they would incur.  However, it was intended that the sector offering various services to citizens should foster the necessary levels pertaining to competition. The impact of the Fiscal policies  The policies made it possible for banks to formulate mergers.  Negotiable orders where withdrawals were to be made from accounts were available nation-wide.  The populace could access checking deposits that credit unions were able to offer (State, 2017). References  Economics USA: 21st Century Edition. (n.d.). Retrieved July 05, 2017, from https://www.learner.org/series/econusa/interactivelabs/eco nomic-timeline/  State, U. D. (2017, May 31). What Happened to the American Economy in the 1980s? Retrieved July 04, 2017, from https://www.thoughtco.com/us-economy-inthe-1980s-1148148 ECO 202 Final Project Guidelines and Rubric Overview The final project for this course is the creation of economic history analysis presentation. Macroeconomics is the part of the study of economics that is concerned with the aggregate or the whole. Macroeconomics provides us with tools and methods to understand how our economy works as a whole. It deals with economy-wide issues such as price levels, employment, national income, and growth. As a student of macroeconomics, you will learn how to understand the changes occurring throughout our economy and how our economy is influenced by our decisions, by our government, and by other countries. In this assignment, you will perform an in-depth analysis of a 10-year period in U.S. economic history between 1950 and today. In your analysis, you will examine macroeconomic data, basic macroeconomic principles, government actions, and historical/current events to give a clear and comprehensive picture of your chosen time period and detail how they are related to one another. The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in Modules Two, Four, and Five. The final project will be submitted in Module Seven. In this assignment, you will demonstrate your mastery of the following course outcomes:     Apply macroeconomic models to historical and current events for drawing connections between the events and their economic impact Determine the effects of government intervention and fiscal and monetary policy actions for their impact on the economy Analyze macroeconomic data for their implication to economic outcomes and forecasting Analyze macroeconomics trends and government policies for their influence on industries and households Prompt For this assignment, you will first need to choose a 10-year period in U.S. economic history between 1950 and today. You will then present the data collected from government sources related to a variety of macroeconomic phenomena and analyze them in conjunction with the models and core principles to explain the economy-wide changes during your chosen time period. You will also examine the events of the time in their relation to the macroeconomic issues as well as the corresponding government actions taken (fiscal and monetary policies) to address the issues. The final presentation should be 15–20 slides using PowerPoint, Prezi, Keynote, or PreZentit, including title and reference slides. Be sure to include speaker notes to accompany the data and graphs, information, and explanations presented on the slide. Specifically, the following critical elements must be addressed: I. Examination of Macroeconomic Data (Be sure to include speaker notes to accompany all of your responses.) a) Gross Domestic Product (GDP) and Growth i. Analyze the annual GDP during the time frame to calculate specific growth rates and trends in the U.S. economy. ii. Choose two or three of the most relevant historical and/or current events during this time period that impacted the U.S. economy. Apply specific models developed throughout the course to demonstrate how these events influenced national output during this time. b) Unemployment and Inflation i. Analyze unemployment and inflation data during the time frame in their relation to output and growth, using macroeconomic principles and models to explain their effect. ii. Apply specific models developed throughout the course to demonstrate how the previously selected historical and/or current events influenced both unemployment and inflation during this time. c) Analyze interest rate fluctuations throughout this time period and their effects on other aspects of the economy. How would these fluctuations affect inflation? Would investments and foreign trade rates increase or decrease? How would the GDP of the American economy be affected? d) Foreign Trade i. Analyze data representing levels of U.S. imports and exports during this time. How do they relate to other economic outcomes such as the GDP, foreign exchange rates, and so on? ii. Apply specific models developed throughout the course to demonstrate how domestic and foreign events (e.g., wars, changes in trade barriers, development abroad) have impacted the level of and changes in imports and exports in the United States. II. III. Government Policies (Be sure to include speaker notes to accompany all of your responses.) a) Fiscal Policy i. Examine the fiscal policies in place at the start of your specific time period in relation to their effects on macroeconomic issues. For instance, consider level of government spending, taxation, subsidies, unemployment benefits, and so on. ii. Analyze new fiscal policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, using macroeconomic principles to explain the actions. iii. Explain the impact of the new fiscal policy actions on individuals and businesses within the economy by integrating the macroeconomic data and principles. b) Monetary Policy i. Examine the monetary policies in place at the start of your specific time period in relation to their effects on macroeconomic issues. For instance, consider the discount rate set by the Fed, the rates on reserves, open market operations, and so on. ii. Analyze new monetary policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, using macroeconomic principles to explain the actions. iii. Explain the impact of the new monetary policy actions on individuals and businesses within the economy by integrating the macroeconomic data and principles. Conclusion (Be sure to include speaker notes to accompany all of your responses.) a) Summarize the overall trends and outcomes of this 10-year period by integrating the data, economic models, and historical analysis. b) Defend your agreement or disagreement with the actions taken by the U.S. government during this time based upon your analysis and application of the macroeconomic theories. Milestones Milestone One: Macroeconomic Data Report In Module Two, you will submit the first three sections of your final project as outlined in Section I, parts a), b), and c). 1) Choose a 10-year period in the history of the U.S. between 1950 and today. All responses will be related to that timeframe. b) Gross Domestic Product (GDP) and Growth i. Analyze the annual GDP to calculate specific growth rates and trends in the U.S. economy. ii. Choose two or three of the most relevant events from this time period that impacted the U.S. economy. Apply specific models developed throughout the course to demonstrate how these events influenced national output during this time period. c) Unemployment and Inflation i. Analyze unemployment and inflation data as to their relation to output and growth, using macroeconomic principles and models to explain their effect. ii. Apply specific models developed throughout the course to demonstrate how the previously selected events influenced both unemployment and inflation during this time period. d) Analyze interest rate fluctuations throughout this time period and their effects on other aspects of the economy. How would these fluctuations affect inflation? Would investments and foreign trade rates increase or decrease? How would the GDP of the American economy be affected? 2) Present your research with 4–6 slides in PowerPoint, Prezi, Keynotes, or PreZentit, not including title page and references. Be sure to include speaker notes to accompany all of your responses. 3) Apply APA formatting to citations and references. This milestone will be graded with the Milestone One Rubric. Milestone Two: Fiscal Policies In Module Four, you will submit a section of your final project pertaining to fiscal policies as outlined in Section II, part a). 1) Continue your observation of the 10-year period selected for Milestone One, and research the government policies implemented during those years. a) Fiscal Policy i. Examine the fiscal policies in place at the start of your specific time period in relation to their effects on macroeconomic issues. For instance, consider level of government spending, taxation, subsidies, unemployment benefits, and so on. Analyze new fiscal policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, using macroeconomic principles to explain the actions. ii. Explain the impact of the new fiscal policy actions on individuals and businesses within the economy by integrating the macroeconomic data and principles. 2) Present your research with 3–5 slides in PowerPoint, Prezi, Keynotes or PreZentit, not including title page and references. Be sure to include speaker notes to accompany all of your responses. 3) Apply APA formatting to citations and references. This milestone will be graded with the Milestone Two Rubric. Milestone Three: Monetary Policies In Module Five, you will submit a section of your final project pertaining to monetary policies as outlined in Section II, part b). 1) Continue your observation of the 10-year period selected for Milestone One and research the Government Policies implemented during those years. a) Monetary Policy i. Examine the monetary policies in place at the start of your specific time period in relation to their effects on macroeconomic issues. For instance, consider the discount rate set by the Fed, the rates on reserves, open market operations, and so on. ii. Analyze new monetary policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, using macroeconomic principles to explain the actions. iii. Explain the impact of the new monetary policy actions on individuals and businesses within the economy by integrating the macroeconomic data and principles. 2) Present your research with 3–5 slides in PowerPoint, Prezi, Keynotes or PreZentit, not including title page and references. Be sure to include speaker notes to accompany all of your responses. 3) Apply APA formatting to citations and references. This milestone will be graded with the Milestone Three Rubric. Final Project: Economic History Analysis Presentation In Module Seven, you will submit your final project. It will include new research on foreign trade practices (Section I, part d), will draw conclusions (Section III), and integrate all milestones and feedback. It should be a complete, polished artifact containing all of the critical elements of the final product. 1) Research and present, in 3–4 slides, foreign trade practices and policies of the 10-year period you researched for Milestones One, Two, and Three. a) Analyze data representing levels of U.S. imports and exports during this time. How do they relate to other economic outcomes such as the GDP, foreign exchange rates, and so on? b) Apply specific models developed throughout the course to demonstrate how domestic and foreign events (e.g., wars, changes in trade barriers, development abroad) have impacted the level of and changes in imports and exports in the United States. 2) Draw conclusions to the research carried out throughout the course. a) Summarize the overall trends and outcomes of this 10-year period by integrating the data, economic models, and historical analysis. b) Defend your agreement or disagreement with the actions taken by the U.S. government during this time based upon your analysis and application of the macroeconomic theories. 3) Incorporate and integrate this information with the slides developed during Milestones One, Two, and Three into a 15–20-slide presentation that covers all the critical elements of the assignment. Be sure to include speaker notes to accompany all of your responses. 4) Apply APA formatting to citations and references. The final project will be graded using the Final Project Rubric. Deliverables Milestone Deliverables Module Due Grading 1 Macroeconomic Data Report Two Graded separately; Milestone One Rubric 2 Fiscal Policies Report Four Graded separately; Milestone Two Rubric 3 Monetary Policies Report Five Graded separately; Milestone Three Rubric Seven Graded separately; Final Project Rubric Final Submission: Economic History Analysis Presentation Final Project Rubric Guidelines for Submission: Your economic history analysis presentation should be 15–20 slides, including title and reference slides, and include speaker notes to accompany the slides. Your reference list slide needs to be in APA format. Critical Elements Examination: GDP: Growth Rates and Trends Exemplary (100%) Meets “Proficient” criteria and explains relevance of the growth rates observed Proficient (85%) Accurately analyzes the annual GDP during the time frame to calculate specific growth rates and trends in the U.S. economy and provides information in speaker notes Applies specific models developed throughout the course to demonstrate how relevant historical and/or current events have influenced national output during the time period, and provides information in speaker notes Needs Improvement (55%) Analyzes the annual GDP during the time frame to calculate specific growth rates and trends in the U.S. economy, but analysis is inaccurate, or does not provide information in speaker notes Examination: GDP: Meets “Proficient” criteria and Applies specific models Influenced National offers a nuanced insight into the developed throughout the course Output relationship between events and to demonstrate how relevant national output historical and current events have influenced national output during the time period, but events chosen are not relevant, or does not provide information in speaker notes Examination: Meets “Proficient” criteria and Analyzes unemployment and Analyzes unemployment and Unemployment and explains how data is collected and inflation data during the time inflation data during the time Inflation: Output and calculated frame in their relation to output frame, but does not relate Growth and growth, using analysis to output and growth, macroeconomic principles and does not use macroeconomic models to explain their effect, principles and models to explain and provides information in their effect, or does not provide speaker notes information in speaker notes Examination: Meets “Proficient” criteria and Applies specific models Applies specific models Unemployment: offers a nuanced insight into the developed throughout the course developed throughout the course Events relationship between events, to demonstrate how relevant to demonstrate how relevant unemployment, and inflation historical/or and current events historical and current events have have influenced both influenced both unemployment unemployment and inflation and inflation during this time during the time period, and period, but events chosen are not provides information in speaker relevant, or does not provide notes information in speaker notes Not Evident (0%) Does not analyze the annual GDP during the time frame Value 6.4 Does not apply specific models developed throughout the course to demonstrate influence on national output 6.4 Does not analyze unemployment and inflation data during the time frame 6.4 Does not apply specific models developed throughout the course to demonstrate relevant events’ influence on unemployment and inflation 6.4 Examination: Interest Meets “Proficient” criteria and Rate Fluctuations relates fluctuations to all other factors of the economy Analyzes interest rate fluctuations throughout the time period and their effect on other aspects of the economy, such as inflation, investment, foreign trade, and the GDP, and provides information in speaker notes Examination: Foreign Meets “Proficient” criteria and Trade: Imports and provides specific detail in Exports presenting the data Accurately analyzes data representing levels of U.S. imports and exports during the time period as they relate to other economic outcomes, and provides information in speaker notes Applies specific models developed throughout the course to demonstrate how domestic and foreign events have impacted the level of and changes in imports and exports in the United States, and provides information in speaker notes Examination: Foreign Meets “Proficient” criteria and Trade: Models offers a nuanced insight into the relationship between events and changes in imports and exports Government Policies: Meets “Proficient” criteria and Fiscal: Policies cites scholarly research to support the relation between the policies and the issues Examines the fiscal policies in place at the start of the specific time period in relation to their effects on macroeconomic issues, and provides information in speaker notes Government Policies: Meets “Proficient” criteria and is Fiscal: Policy Actions well qualified and cites scholarly research with specific examples and references Analyzes new fiscal policy actions undertaken by the U.S. government throughout the time period by describing their intended effects, uses macroeconomic principles to explain the actions, and provides information in speaker notes Analyzes interest rate fluctuations throughout the time period, but does not relate this to their effect on other aspects of the economy such as inflation, investment, foreign trade, and the GDP, or does not provide information in speaker notes Analyzes data representing levels of U.S. imports and exports during the time period, but does not relate data to other economic outcomes, does not provide information in speaker notes, or analysis is inaccurate Applies specific models developed throughout the course to demonstrate how domestic and foreign events have impacted the level of and changes in imports and exports in the United States, but events chosen are not relevant, or does not provide information in speaker notes Examines the fiscal policies in place at the start of the specific time period, but does not relate this to their effects on macroeconomic issues, or does not provide information in speaker notes Analyzes new fiscal policy actions undertaken by the U.S. government throughout the time period, but does not describe their intended effects, does not use macroeconomic principles to explain the actions, or does not provide information in speaker notes Does not analyze interest rate fluctuations throughout the time period 6.4 Does not analyze data representing levels of U.S. imports and exports during the time period 6.4 Does not apply specific models developed throughout the course to demonstrate impact of domestic and foreign events on foreign trade 6.4 Does not explain the fiscal policies in place at the start of the specific time period 6.4 Does not analyze new fiscal policy actions undertaken by the U.S. government throughout the time period 6.4 Government Policies: Meets “Proficient” criteria and Fiscal: Impact uses concrete examples to substantiate claims and to comprehensively describe the policy results Comprehensively explains the impact of the new fiscal policy actions on individuals and businesses within the economy by integrating the macroeconomic data and principles, and provides information in speaker notes Explains the impact of the new fiscal policy actions on individuals and businesses within the economy, but is not comprehensive, does not integrate the macroeconomic data and principles, or does not provide information in speaker notes Government Policies: Meets “Proficient” criteria and Examines the monetary policies Examines the monetary policies Monetary: Policies cites scholarly research to in place at the start of the in place at the start of the support the relation between the selected time period in relation to selected time period, but does policies and the issues their effects on macroeconomic not relate them to their effects on issues, and provides information macroeconomic issues, or does in speaker notes not provide information in speaker notes Government Policies: Meets “Proficient” criteria and is Analyzes new monetary policy Analyzes new monetary policy Monetary: Policy well qualified and cites scholarly actions undertaken by the U.S. actions undertaken by the U.S. Actions research with specific examples government throughout the time government throughout the time and references period by describing their period, but does not describe intended effects, uses their intended effects, does not macroeconomic principles to use macroeconomic principles to explain the actions, and provides explain the actions, or does not information in speaker notes provide information in speaker notes Government Policies: Meets “Proficient” criteria and Comprehensively explains the Explains the impact of the new Monetary: Impact uses concrete examples to impact of the new monetary monetary policy actions on substantiate claims and to policy actions on individuals and individuals and businesses within comprehensively describe the businesses within the economy the economy, but is not policy results by integrating the comprehensive, does not macroeconomic data and integrate the macroeconomic principles, and provides data and principles, or does not information in speaker notes provide information in speaker notes Does not explain the impact of the new fiscal policy actions on individuals and businesses within the economy 6.4 Does not examine the monetary policies in place at the start of the selected time period 6.4 Does not analyze new monetary policy actions undertaken by the U.S. government throughout the time period 6.4 Does not explain the impact of the new monetary policy actions on individuals and businesses within the economy 6.4 Conclusion: Trends and Outcomes Conclusion: Agreement or Disagreement Articulation of Response Meets “Proficient” criteria and highlights specific examples to demonstrate trends and outcomes Summarizes the overall trends and outcomes of the 10-year period by effectively integrating the data, economic models, and historical analysis, and provides information in speaker notes Summarizes the overall trends and outcomes of the 10-year period, but does not integrate the data, economic models, and historical analysis effectively, does not apply all three elements, or does not provide information in speaker notes Meets “Proficient” criteria, and Defends whether the student Defends whether the student point of view is well supported agrees or disagrees with the agrees or disagrees with the and plausible actions taken by the U.S. actions taken by the U.S. government during the selected government during the selected time period based upon student’s time period based upon student’s analysis and application of the analysis and application of the macroeconomic theories, and macroeconomic theories, but provides information in speaker defense is weak, does not notes accurately analyze and apply theories, or does not provide information in speaker notes Submission is free of errors Submission has no major errors Submission has major errors related to citations, grammar, related to citations, grammar, related to citations, grammar, spelling, syntax, and organization spelling, syntax, or organization spelling, syntax, or organization and is presented in a professional that negatively impact readability and easy-to-read format and articulation of main ideas Does not summarize the overall trends and outcomes of the 10year period 6.4 Does not defend whether the student agrees or disagrees with the actions taken by the U.S. government during the selected time period 6.4 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Earned Total 4 100%
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