Macroeconomics: 80’s Double Dip Recession


General Requirements & Info (see ?Organization of Case Study? later in syllabus for more details):
? You will be using your macroeconomic model (AD/AS/Potential GDP) throughout your entire paper to help illustrate your analysis. All 3 curves (AD, AS, and PGDP) must be included in each of these models to show the changes in equilibrium and how the equilibrium relates to full employment. You will be also using relevant interest rate models in your monetary policy section. Models may be NEATLY drawn by hand (ie, use a ruler and pen) if you cannot figure out how to create them on the computer. Your models should be created by you and specifically tailored to illustrate your analysis (not simply a cut/paste of generic models). Models should be included inside the paper (connected and explained with your writing analysis, not tacked on at the end of the paper).
? You will be using specific macroeconomic measurements and data (such as inflation rates, real GDP growth rates, unemployment rates, federal budget data, federal funds rate data) throughout your entire paper to provide support for your analysis of economic fluctuations and policies ? see attached data in this syllabus.
? Your paper will probably end up being approximately 10 pages of writing (typed, double-spaced, 12-point Times New Roman font) and appropriate models. While 10 pages is not a minimum requirement, I find that most students need at least 10 pages to complete a thorough analysis (though you may need even more than that).
? I have sample papers from previous students in my office if you would like to schedule a time to see them so you can have a better idea of what a final product should end up looking like. Please see the attached grading rubric to get a better idea of how your grade will be determined on this assignment.
? Case study is due by class time on December 6, though I grant everyone the same penalty-free extension until 2pm on December 12. The case study must be received by me BOTH in hard copy and electronic version (uploaded to SafeAssign in Blackboard) by 2pm on December 12 at the latest and will not be accepted late for any reason.

You must also submit a Works Cited that documents every source you have used to help produce your paper, and each source used must be documented in the text or with footnotes each time it is used. You must do this for both direct quotations and paraphrasing. In order to better demonstrate that you understand your sources, try to focus on paraphrasing your research as opposed to direct quotations. As a general rule, keep your direct quotations brief ? nothing longer than a phrase or a sentence or two. If you are unclear how to properly give credit to your sources you need to be proactive in seeking out assistance from the writing center, a librarian, or me. I have also attached guidelines from other academic institutions for properly giving credit to your


research (see ?Assistance & Resources? section in a few pages). Instances of plagiarism will result in a zero on the assignment and will be reported to the Academic Dean.

Whatever time period you choose to analyze, there will be thousands of great sources out there written by economists in books, journals, magazines, newspapers, and the internet. However, there will also be thousands of poor sources, especially on the internet ? please be discriminating when using on-line resources and make sure they are written by qualified economists (for example, Wikipedia is not a good source for an academic paper). Here are a few sources that some of you may find to be helpful ? many of which can be found at or through the Lee College Library. This is by no means an exhaustive list! There are thousands of good sources out there, but these are a few that you may find helpful to get the ball rolling:

For an excellent overview of economic developments, fiscal policy, and monetary policy over the past 4 decades ? a perfect place to get started:

The Age of Turbulence, By Alan Greenspan. New York: The Penguin Press, 2007.
Pg 54-99 (mid-1960s to mid-1980s)
Pg 100-163 (mid-1980s to mid-1990s)
Pg 164-248 (mid-1990s to mid-2000s)

Fiscal and Monetary Policy:

Federal Reserve System website ? section on the intended target for the federal funds rate and open market operations since 1990
Budget and Fiscal Policy, Part IV of United States Congress: Proceedings, By Dennis Hale, via Google Books (Boston, MA: Transaction Publishers, 1983). JK 1041 .T48 1983
Darryl Francis and the Making of Monetary Policy, 1966-1975, By R.W. Hafer and David C.
Wheelock, Review, 85:2 Mar/Apr 2003 use this url: &site=bsi-live&scope=site
Fiscal Policy and Cyclical Fluctuations: An Investigation of U.S. State Budget Stabilization Funds, by Gary A. Wagner and Erik M. Elder, Draft Publication, Oct. 2002 (Last accessed 12/17/2008). (not there?).
Introduction: The Macroeconomics of Fiscal Policy, by Richard W. Kopcke, Geoffrey M. B.
Tootell, and Robert K. Triest, Federal Reserve Bank of Boston Conference Series, no. 49,
June 2004.
Issues in the Coordination of Monetary and Fiscal Policy, by Alan S. Blinder, Part of a 1982 Symposium Sponsored by the Federal Reserve Bank of Kansas City.
Lagging Doubts, Reading section from Overview: Fiscal Policy Today by Robert Schenk
Macroeconomic Models and Fiscal Policy, Part III of Economics: Principles, Problems, and
Policies By Campbell R. McConnell, Stanley L. Brue (McGraw-Hill Professional, 2005). Via Google Books B&T cart
Monetary and Fiscal Policy, Chapter 7 of An Outline of the U.S. Economy, by the U.S. Department of State, or Monetary Policy, by James Tobin, Concise Encyclopedia of Economics, 2nd. Ed.
Monetary Policy Rules and Macroeconomic Stability: evidence and some theory, by Ricahrd Clarida, Jordi Gali, and Mark Gertler, Quarterly Journal of Economics, 115:1, Feb. 2000
NBER?s Recession Dating Procedure, by the Business Cycle Dating Committee of the National
Bureau of Economic Research, Oct. 21, 2003.
Oil Prices, Monetary Policy, and the Macroeconomy, by Charles T. Carlstrom and Timothy S. Fuerst, Federal Reserve Bank of Cleveland Policy Discussion Papers No. 10, April 2005 Phases of U.S. Monetary Policy: 1987 to 2001, by Marvin Goodfriend fm
Postwar Business Cycles in the United States, Chapter 11 of Todd A Knoop?s book Recessions and Depressions via Google Books (Greenwood Publishing Group, 2004). HB 3711 .K63 2004
Reaganomics, from the Concise Encyclopedia of Economics, by William A. Niskanen
Reviving Fiscal Policy ? John Maynard Keynes, by Laurence Seidman Challenge, 44, 3
The Role of Fiscal Policy, FRBSF Economic Letter, by the Research Department of the Federal Reserve Bank of San Francisco, 2002, no. 26, Sept. 6, 2002.

Aurbach, AlanJ. Formation of Fiscal Policy: The Experience of the Past Twenty-five Years. Economic Policy Review 6:1 April 2000 &site=ehost-live

Understanding Fiscal Policy, by the Congressional Budget Office, Background Paper, April
What is the Difference Between Fiscal and Monetary Policy? Ask Dr. Econ., (Mar. 2002) Maestro: Greenspan’s Fed and the American Boom, by Bob Woodward, 2000


The 1974-1975 Recession in the U.S., by Thayer Whatkins, San Jose State University Economics Department, (Last accessed 12/17/2008).
1975 Recession Fiscal Policy, Introduction to of Automatic Fiscal Policies to Combat Recessions, by Laurence S. Seidman,, (M.E. Sharp, 2003). HJ 257.2 .S44 2003
Recession of 1973-75 in the U.S., by Thayer Whatkins, San Jose State University Economic Department. (Last accessed 12/17/2008).
Recessions Since 1970, part of a Economics 50453 Macroeconomic Studies class taught at Texas Christian University by John T. Harvey
A Tale of Two Tax Cuts: What recent history teaches about recessions and economic policy, by Michael A. Meeropol, EPI Issue Brief, May 7, 2001
The Tax Rebate in the 1975 Recession, Chapter 7 of Automatic Fiscal Policies to Combat Recessions, by Laurence S. Seidman, (M.E. Sharp, 2003) via Google Books HJ 257.2 .S44 2003
Hafer R.W. and Wheelock, D.C. Darryl Francis and the Making of Monetary Policy, 1966-1975.
Review 85:2 Mar/Apr 2003. &site=ehost-live
Stanislaw, Joseph and Yergin, Daniel. Nixon, Price Controls, and the Gold Standard. Excerpt from The Commanding Heights. 1997 ed., pp. 60-64 B&T cart
U.S. Department of State. Bureau of Public Affairs: Office of the Historian. ?Second Arab Oil Embargo, 1973-1974.? ?? Is this what you want? ?
Harvey, John T. Recessions Since 1970, part of a Economics 50453 Macroeconomic Studies class at Texas Christian University.
U.S. Department of State. Bureau of Public Affairs: Office of the Historian. “Second Arab Oil
Embargo, 1973-1974.”
Seidman Laurence S. The Tax Rebate in the 1975 Recession, Introduction to of Automatic Fiscal
Policies to Combat Recessions, and Chapter 7 of Automatic Fiscal Policies to Combat Recessions, (M.E. Sharp, 2003) Google Books The White House: Our Presidents: Gerald Ford.
The Gerald R. Ford Presidential Library and Museum, Biography.
Federal Reserve December 1973 Bluebook Federal Reserve December 1974 Bluebook
Federal Reserve December 1975 Bluebook


1981 1982 recession fiscal policy, Chapter # in Macroeconomics, By William A. McEachern
(Thomson/South-Western, 2005).
49pxHxMh8C&pg=PA252&lpg=PA252&dq=1981+1982+recession+fiscal+policy&source= web&ots=7PVetDKDPt&sig=VrJhlt9zCMBnrPMAMT3N1D0uGz0 HB 172 .M393 1991
Expected Fiscal Policy and the Recession of 1982, NBER Working Paper No. 1784, Dec. 1985.
The Recession of 1980-1982 in the U.S., by Thayer Watkins, (Last accessed 12/17/2008).
Unemployment Continues to Rise in 1982 as Recession Deepened, by Michael A. Urquhart and Marillyn A. Hewson, Monthly Labor Review, Feb. 1983, 106:2.
Taxes: What People Forget About Reagan, by Jeanne Sahaddi The Disinflation of the 1980s, by David T. Coe, Martine Durand and Ulrich Stiehler


Consumption and the Recession of 1990-1991, by Olivier Blanchard, American Economic Review, 83:2 May 1993 p. 270
Macro Theory and the Recession of 1990-1991, by Robert E. Hall, American Economic Review, 83:2, May, 1993.
What Caused the 1990-1991 Recession? By Carl E. Walsh, Economic Review of the Federal Reserve Bank of San Francisco 1993, no. 2
Curry, Timothy and Lynn Shubit. ?The Cost of the Savings and Loan Crisis: Truth and Consequences.? FDIC Banking Review. 27-28
Taylor, John B. Monetary Policy and the Long Boom. 1998 Federal Reserve Bank of St. Louis. 3-
11 &site=ehost-live
?The October ?87 Crash Ten Years Later.? Federal Reserve Bank of San Francisco 73&site=ehost-live
Walsh, Carl E. ?The Role of Fiscal Policy.? Economic Research and Data. 2002. Federal Reserve Bank of San Francisco. &site=ehost-live


The Economy in 2002: A Challenging Time for Monetary Policy, a Speech by Thomas M.
Hoenig, President of the Federal Reserve Bank of Kansas City, Held at the Nebraska Banker?s Association Annual Meeting, Embassy Suites, Omaha, Neb. April 26, 2002.
Economic Trends During the 2001 Recession (Part 1), by Ta-Win Lin and Jim Schimidt,
Washington Economic Trends Research Brief no. 15, July 2002
H.R. 2, Jobs and Growth Tax Relief Reconciliation Act of 2003, Congressional Budget Office, May 23, 2003.
President Bush?s 2001 Tax Relief Softens the Recession, Tax Relief Update Council of Economic Advisors, Feb. 14, 2002.
Recession of 2001, by Morton J. Marcus, InContext, Indiana Business Research Center, Kelley School of Business, Indiana University 3:6, Nov/Dec. 2002
Recession’s Mildness Due in Large Part to Better Monetary Policy: Speech by St. Louis Federal Reserve Bank President William Poole, April 4, 2002. This is a speech given by him on the given day; different title:
What are the similarities and differences between the 2001 recession and the Great Depression? Ask Dr. Econ, (Dec. 2002)
U.S. Recession of 2001-2002, by Thayer Watkins, San Jose State Department of Economics (Last accessed 12/17/2008).
The 2001 Recession: How Was It Different and What Developments May Have Caused It?, by Kliesen, Kevin

Other Relevant U.S. Economic Agency Homepages:

? Board of Governors of the Federal Reserve System: o Monetary Policy Report to Congress 1996 to 2010. o Open Market Operations.
o Bureau of Labor Statistics: o Bureau of Economic Analysis: o National Bureau of Economic Research:

Keep in mind that you must cite each source that contributes to your paper