Economic Rogoff ethic paper

Economic Rogoff ethic paper

Directions
Choose one of two ethics questions to answer. Only answer one; any papers with both questions answered will receive an immediate failing grade. Make a decision for or against the policy in the ethical question and detail the costs and benefits associated with your reasoning. Answer the questions in your own words. Do not work with you colleagues on this project as it is meant to gauge your level of understanding and performance individually, not collectively. Collective work, when detected, will be punished in two ways:

1) I will give only up to 70% of full credit for the questionand
2) In more egregious cases I will file academic misconduct paperwork and seek a failing grade for the fullassignment.

You sentence should be your own; not those of the readings, your fellow students, or anyone else. To detect any collusion or plagiarism, your answers must be collected into one PDF file and submitted to the “Ethics Project” Drop Box found under “Lessons” in the Blackboard course site. All use of sources,
including the books must be cited in MLA format, so you should have a bibliography section at the end.

Use Excel to produce the graphs, and import the graphs into your PDF. Do not submit Excel files unless I ask specifically for them through an e-mail request. Be sure all axes, series, and important data points are labeled. Label the graphs as well; “Figure 1,” “Figure 2”, or “Table 1”, “Table 2” for example. This will make any reference to them in the text more readable. Graphs should be done in Excel; I will not accept graphs generated by FRED. Sonone of your graphs should like the following:

This project is worth 25 points and will be scored according to the rubric provided. Both topics involve the use of data, theory, policy, graphs, and professionalism as outlined in the rubric. Each question part has a word limit which will not count citations, quotes, or footnotes. Answers exceeding the word limit will only be graded as high as “satisfactory”.

You must use and cite Mishkin, Rogoff, and any other resources used. The world limit is strictly enforced but does not count tables, graphs, footnotes, citations, or the bibliography. Your essay must be less than 1300 words, 12 point font size, and double spaced.

Any appeals must be made in writing within two business days of receiving the grade. Graph Requirements:
1) All axes must belabeled
2) The graph must have a cleartitle
3) The units must be distinct and not was space (2.0% is fine, 2.0000000% isridiculous).
4) Do not input unnecessary vertical and horizontal lines to mark the intervals. The only horizontal line you need is at 0, and the only vertical line you need is at0.
5) Do not use color. Only black and white graphs. No colorbackgrounds.
6) Do not litter your graph with unnecessary graphics, “glows”, ormemes.
a. Yes, students have put memes their graphs before and it was a disaster, like thisone:
1
7) Your graphs should emphasize a point you want to make in your writing. If you’re not using yoru graph in your writing your grade will suffer. If you’re graph does not serve your writing, your grade will suffer. These are valuable tools, not decoration; make itcount!
8) What does a “good graph” look like? Turn thepage:

1 Actually this was made by your professor for use in his lectures… and it was a disaster.
Figure 1 Shiller CAPE Ratio and the Yield Spread. Source: Shiller, FRED St. Louis Federal Reserve.

Note the label. I have put the title in the Figure Label, which will also work. Note I have put a citation in the source and will further cite both sources in my bibliography. The trend line is clearly drawn and demonstrating a negative relationship, while the equation and goodness of fit are set apart for a clear view. Axes are labeled, and the important 0 axis lines are marked with no other unnecessary marks. The observation markers are small and do not hide the trendline or other important material. The graph is sized to still be readable on the page and there are no blurred lines or letters in the transition from Excel to Word.

Rubric

Question 1: The Underbanked and Large Denomination Phase Out.
On page 94, Rogoff (2017) details his checklist for the phase out of large denomination currency:

1. Phase out paper currency: specifically the $100 and$50.
2. Universal financialinclusion.
3. Discourage other means of privacy for largetransactions.
4. Enhance infrastructure that provides an electronic option with the speed and ease ofcash.

Consider the consequences and ethical implications of this decision on “underbanked” households and criminals, and determine if the benefits of such of a policy in reducing criminal access to liquidity is worth the costs to underbanked access to liquidity. Take a stand on it: for or against.

Use the data and sources provided along with Mishkin and Rogoff. The resources for this question to be considered are found in the blue hyperlinks. To support your answer to this question consider the relationship between holdings of cash in the US and Sweden as they relate to property crime. Then watch the video summary and read the 2015 Executive Summary for the FDIC National Survey ofUnbanked and UnderbankedHouseholds in the US to get an idea about how rural and low income households use currency (when not committing crime that is). Find one outside data source and construct on more graph to support your answer.

Data and Graphs Instructions.

Using the Department of Justice’s “Uniform Crime Reporting Statistics” get the annual rates of property crime in the US from 1996 to 20142. Gather the ratio of the value of $100 bills relative to GDP from
Rogoff’s data website. Calculate the growth rates of crime from year to year for 1998 to 2014. Create a scatter plot with the value of $100 bills relative to GDP on the X-axis and the growth rate of crime on the Y-axis. Add a linear trend to the graph and show the equation and “goodness of fit” 2value. This value is to be interpreted as how well $100 bill availability contributes to growth rates in crime in each year.
Label the axes, and title the graph “Crime and the $100 Bill”.

Using the BRA Swedish Crime Survey, get the annual rate of “Theft, robbery, other offences of stealing” per 100,000 from 1981 to 20173. Using the Riksbank’s Financial Market Statistics data, get the M0 (Notes and Coin outside the RIksbanks) numbers for 1981 to 20174. Calculate the growth rates of crime and notes and coin outside the Riksbank from 1982 to 2017. Create a scatter plot with the M0 values on the x-axis, and the crime growth rate on the y-axis. Add a 2nd degree polynomial trend to the graph and show the equation and the “Goodness of fit” 2value. This value is to be interpreted as how well the availability of any note or coin Krona contribute to the growth rates in crime each year. Label the axes and title the graph “Crime and the Krona”.

2 Go to “National or one state, multiple variables” under “State and National Estimates on the left hand side of the screen. Choose “United States-Total for (a) and “Property Crime Rates” for (b). Choose 1996 to 2014 for (c). Then hit “Get Table”. Use the “Property Crime Rate per 100,000 population”, second column data.
3 Click on “Reported offences, 1950 to 2017”, and use Column Q in the Excel file.
4 Under “More about the results” click on “Download as Excel”. M0 is column B.

Question 2: Cash and Negative Interest Rates.
On page 195 Rogoff concludes that negative interest rate policy could allow for more effective monetary stimulus in the face of financial crisis and recession. Phasing out cash would allow for a breaking of the zero lower bound as it dissolves the 0% interest rate monetary asset.

Consider the consequences and ethical implications of a negative interest rate on small banks5 as lenders and small firms and households as borrowers, and determine if the benefits of such of a policy in expanding liquidity in the economy and the costs to smaller banks. Take a stand on it: for or against.

Use the data and sources provided along with Mishkin and Rogoff. The resources for this question to be considered are found in the blue hyperlinks. To support your answer to this question consider the relationship between the lowering of interest rates (easy monetary policy) and the percentage share of small banks in the US relative to large banks (in this case banks with assets under $100 million). Then read the speech made by Chicago Federal Reserve President and CEOCharles Evans regarding community banks (small banks) in a lower interest rate environment from September of 2016. Find one outside data source and construct on more graph to support your answer.

Data and Graphs Instructions.

Using FRED, calculate a “share” of small banks in the US by dividing Commercial Banks in the US with Assets under $100M (tag US100NUM) by total Commercial Banks in the US (tag USNUM). Convert this decimal to a percentage, and use quarterly data from quarter 1 1984 to quarter 4 2017. Now convert the data from Quarter 1 1985 to Quarter 4 2017 into year over year growth rates6. Find the data for the Effective Federal Funds Rate on FRED (tag FEDFUNDS), and create a scatterplot with the Fed Funds rate on the horizontal axis and the growth in share of small banks in the US on the y-axis.

5 Do not consider the negative interest rate for depositors; the negative interest rate policy would directly affect banks holding excess and required reserves in their fed accounts and most likely individual depositors would only see a 0% return on savings (the lower bound would still hold for them).
6 To do this note that year over year means the change from Quarter 1 1984 to Quarter 1 1985. So if you have the shares in the B column, starting in the 2ndrow, the equation in Excel should be subtracting the current observation from the one four periods in the past: “=(b6-b2)/b2”. You will not have growth observations for 1984 since you do not have 1983 data.

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