“Long” Treasuries yield a scant 2.6% over 30 years. Basic theory suggests this should should equal expected growth rate plus inflation. If a rise in the CPI of 2% per annum is the Fed’s target, then do investors really expect that to never be attained? or attained but with real growth bouncing around at 1% pa? Now we can – will! – poke around with data using FRED, and refine this query. Then we can link it to a simple growth model. That will lead to a set of topics revolving around productivity, aging, and saving for the future. Out of those can come a wide array of research topics for a capstone project.
This course will have several components. One is to do a research paper on a topic tied to the course theme. (I can consider other topics, if you can present a compelling case.) That will require you to explore the literature on a topic, and present what is known and what we economists would like to know.
A second component is to explore data. How is the US economy doing? Criteria, metrics, evaluation … learning how to locate data and set forth a concise, coherent argument is another part of what we will do. For that I will assign topics for blogs and class presentations.
Third, we will have policy proposals for you to critique. If you but scour the news you should find plenty.
The latter part of the term will evolve to incorporate your paper topics. Early on we will read a couple papers, particularly Robert Gordon and then several on technology; review the basic growth model, and explore the concept of “demographic dividend(s)” in the context of the US economy and countries such as India and China.
draft of Oct 28, 2016
Note: I have left material from previous capstones “up” but this term will be very different in content and approach.