Choose a current events topic from this semester.  While any topic is open for discussion, some popular topics include: The impact o

Choose a “current events” topic from this semester.  While any topic is open for discussion, some popular topics include:

  • The impact of Covid-19 on the economy
  • Healthcare spending
  • Government budget deficits
  • Trade Balances
  • (Energy Prices) – this topic
  • Global Climate Change

After selecting your topic, research the current events surrounding the topic.  Then, using economic theory covered in this book, discuss the implications on the macroeconomy.  Examples for the 6 topics above are below.  You do not need to stick with one of these topics, only fulfill the requirement of using existing theory to discuss your topic.

  • The impact of Covid-19 on the economy
    • An example discussion may include the AD/AS model and looking at the abrupt shift left of the demand curve, then the shifts of the supply curve with worker shortages, supply chain issues, and rising fuel costs.
  • Healthcare spending
    • An example discussion may include using DSGE and modeling rising health care spending as a permanent increase in taxes in the economy.
  • Government budget deficits
    • Based on the discuss in Chapter 18, you may opt to analyze the cause of budget deficits, then discuss whether or not the stock of government debt needs to be repaid (in an economic sense) in the future.  You may decide the debt needs to be repaid, however you may also argue that because we don’t know when the economy will end it is ok for the government to carry debt forward.
  • Trade Balances
    • You may opt to consider trade balances as impacting both investment and consumption in the AD/AS model to investigate the impact of a trade surplus or deficit on the economy.
  • Energy Prices
    • You may opt to revisit the discussion of oil prices in AD/AS, but broaden your perspective to include natural gas, heating oil, etc.  Current home heating costs are expected to rise by 29% for this coming winter.
  • Global Climate Change
    • You may opt to include the costs of global climate change on the economy.  One possible way to do this is to incorporate the cost as higher taxes.  Alternatively, you may need to look at this as higher consumption on “green energy” at the expense of other types of consumption in the consumer’s budget constraint.

Anticipate about 5 pages for your paper, about 7-10 minutes for a presentation, or at least an 8.5×11″ sheet for graphic design.  You should explain the following:

1. Frame your current event using news articles or current statics (for example, home heating costs are expected to rise by 29% this winter).  You can find these using headlines from most news sources (be sure to stick with reputable sources).

2. Introduce your economic analysis.  Discuss the model you will be using and define the key variables you will need.

3. Discuss your current event in the framework of the model.  Explicitly state how you will incorporate your event, then show and discuss the analysis.

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