Optional Paper

An optional extra credit paper, worth up to 5 percent of your final grade, must deal with the topic of monetary policy in the current recession, and look at both newspaper editorials and blogs and at economic journal articles. (and more than one of each).

It must be at least 5 pages in length and no more than 10 pages in length (double spaced, standard sized) and do the following:

SUMMARIZE at least two articles, and COMPARE AND CONTRAST the positions of the authors effectively. Check my home page "Guide to Writing a Summary" for details on how to do this.
PRESENT the articles in a professional manner, avoiding poor grammar, slangmisspellings and so on.
AVOID plagiarism or excessively close summary, which may well lead to up to 5 percent deduction from your final grade, and in serious cases failure in the class or proceedings before the academic integrity review board.
If two papers follow each other so closely that they are often close paraphrases of each other, then neither will receive any credit. If even short passages are directly copied from the other, then 10 percent of the course grade will be deducted from each student involved. If long passages are substantially copied, all students involved will fail the course.

Choose your articles by reading one or both of the following as a starting point:

Paul Krugman, Oligarchs and Money for a very strong policy recommendation for an inflation target of four percent. The Fed, very predictably, will not listen, but should they?
Mike Konczal, Explanations and Policy Solutions to our Weak Economy which covers all the possible explanations, with links to articles further explaning them.

Both articles have links which reference other works that you may want to follow up on. DO NOT give me summaries of these articles, but keep the problems they raise in mind in choosing the articles you will summarize.

It is HIGHLY recommended that you choose one or more of the articles in the Fall 2013 Journal of Economic Perspectives with a lead article by Ben Bernanke, and other articles on economic policy. The ariticles of Bernanke, Gorton, Rotemberg, and Eichengreen are especially recommended as choices for your paper.

I would add to these two speeches by Ben Bernanke,

Monetary Policy Objectives and Tools in a Low-Inflation Environment for a closer focus on Quantitative Easing (Oct. 15, 2010)
Monetary Policy Since the Onset of the Crisis for a closer focus on Quantitative Easing. (Aug. 31, 2012)
and Ben Bernanke's 1999 article, Japanese Monetary Policy: A Case of Self-Induced Paralysis shows Ben Bernanke recommending QE to Japan. He repeated the advice in 2003, in a speech titled Some Thoughts on Monetary Policy in Japan , which is a bit simpler in its presentation.
Choices for a second article to use in your comparison/contrast are up to you. Some suggestions may be provided by
- It Takes A Regime Shift: Recent Developments in Japanese Monetary Policy by Christina Romer, examines what happened when Japan finally followed Bernanke's advice in 2013, with parallels to the Great Depression.
- The Irrelevance of Quantitative Easing by David Glasner, with links to an article and comments by J.K.Hamilton, Nick Rowe,and Scott Sumner.
- The World Needs further Monetary Ease, Not an Early Exit by Joe Gagnon is quite clear in its explanation of Quantitative Easing.
- IMF World Economic Outlook Useful for an overview of the actual state of the world, in their press briefing. Chapter 3, "Perspectives on Global Interest Rates", would fit with the general topic of monetary policy.