ECO 502 Assignment 3 - The Great Recession (GR)
Question # 00540879
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Updated on: 06/06/2017 12:52 AM Due on: 06/06/2017
ECO 502 – Selected Topics in Macro
Essay Assignment 3
The Great Recession (GR) lasted from December 2007 until June 2009. You
know from this course that the GR was the longest, deepest, and most severe
recession since the Great Depression. However, it was unclear in mid-2008 that
the economy was actually going to experience a severe recession, based on the
information available at the time. The FMOC reacts to both current data and
forecasts for what is to come in formulating its policy. To get a taste of what the
Fed faces when the economy takes surprising turns, please read the Statements
of the FOMC from 2008 for June, August, September, October (two statements)
and December. The link:
http://federalreserve.gov/monetarypolicy/fomchistorical2008.htm
Then, set out in a narrative (in a story to, say, a colleague, and not in the form of
diary or calendar entries, so be creative) what the Fed discovered the economy
was doing over this period and the policy actions it pursued to deal with the
changes in the economy.
Lastly, let’s compare what the Fed forecasted for the economy with what actually
happened. On page 11 of the pdf for the Fed minutes of the June 25 meeting
(http://federalreserve.gov/monetarypolicy/files/fomcminutes20080625.pdf) the
Fed set out its forecast for 2008 and 2009. Compare the forecasts of the Fed
with actually happened in the US in 2008 and 2009 for GDP on an annual basis.
Then compare the actual unemployment rates of, say, December 2008 and
December 2009 with the annual forecasts the Fed made in this June forecast.
Comment on what you find and speculate on why the forecasts could be so, well,
wrong. Use FRED as your data source:
https://research.stlouisfed.org/fred2/series/A191RL1A225NBEA and
https://research.stlouisfed.org/fred2/series/UNRATE?
catbc=1&utm_expid=19978471-2.Y0NpAPxIQfK_8K7O4DTQg.1&utm_referrer=https%3A%2F%2Fresearch.stlouisfed.org
%2Ffred2%2Fcategories%2F32447
Instruction - A length of not less than 3 pages and not more than 5, doublespaced, would be fine.
Essay Assignment 3
The Great Recession (GR) lasted from December 2007 until June 2009. You
know from this course that the GR was the longest, deepest, and most severe
recession since the Great Depression. However, it was unclear in mid-2008 that
the economy was actually going to experience a severe recession, based on the
information available at the time. The FMOC reacts to both current data and
forecasts for what is to come in formulating its policy. To get a taste of what the
Fed faces when the economy takes surprising turns, please read the Statements
of the FOMC from 2008 for June, August, September, October (two statements)
and December. The link:
http://federalreserve.gov/monetarypolicy/fomchistorical2008.htm
Then, set out in a narrative (in a story to, say, a colleague, and not in the form of
diary or calendar entries, so be creative) what the Fed discovered the economy
was doing over this period and the policy actions it pursued to deal with the
changes in the economy.
Lastly, let’s compare what the Fed forecasted for the economy with what actually
happened. On page 11 of the pdf for the Fed minutes of the June 25 meeting
(http://federalreserve.gov/monetarypolicy/files/fomcminutes20080625.pdf) the
Fed set out its forecast for 2008 and 2009. Compare the forecasts of the Fed
with actually happened in the US in 2008 and 2009 for GDP on an annual basis.
Then compare the actual unemployment rates of, say, December 2008 and
December 2009 with the annual forecasts the Fed made in this June forecast.
Comment on what you find and speculate on why the forecasts could be so, well,
wrong. Use FRED as your data source:
https://research.stlouisfed.org/fred2/series/A191RL1A225NBEA and
https://research.stlouisfed.org/fred2/series/UNRATE?
catbc=1&utm_expid=19978471-2.Y0NpAPxIQfK_8K7O4DTQg.1&utm_referrer=https%3A%2F%2Fresearch.stlouisfed.org
%2Ffred2%2Fcategories%2F32447
Instruction - A length of not less than 3 pages and not more than 5, doublespaced, would be fine.
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Rating:
/5
Solution: ECO 502 Assignment 3 - The Great Recession (GR)