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Robert Winslow

Econ 330 HW3

Posted: Sep 29th, 2025 - Modified: Sep 29th, 2025

This assignment is under construction.

Instructions

Each problem in this assignment asks you to work with data and/or answer one or more reflection questions about the data. Each chart you produce must be clearly labeled, self-contained, and easy to read. Your answers to the reflection questions should be succint and insightful. When writing your answers, imagine that you are preparing a report for your very busy, non-economist, manager.

You must submit one report (preferable in PDF format) to D2L, which contains all of your charts and your answers to the questions. Once again, your analysis and charts must be self-contained and clearly labeled.

You are allowed to work with others on this assignment, but:

  • Be sure to include attribution at the top of your submission. If someone helped you create a document, their name should be somewhere on the document.
  • Submitted work should be your own. (Charts will naturally look similar. That’s fine.)

Problem 1: Velocity of Money

  1. Plot the velocity of money. (Nominal GDP divided by the M2 money supply.) 1960-2025
  2. Now plot the quarterly change in the velocity. (Change the units to underneath the Formula in FRED)
  3. What happens to the velocity of money in 2020? [Max: 10 words.]
  4. What does this imply for a simple quantity theory of money? [Max: 20 words.]

Problem 2: Monetary Policy Cycles

Download data on the Fed Funds rate and unemployment rate from 2000 onwards. Looking at the Fed Funds rate, you will need to manually determine when each “easing cycle” and “tightening” cycle begins.

  1. Create a plot comparing the tightening cycles that have taken place since 2000.
    • On one axis, you should have the time since the start of tightening.
    • On the other axis, you should have the increase in fedfunds rate since the tightening began.
  2. Create a similar plot for the easing cycles since 2000.
  3. Compare the most recent tightening cycle to the ones that came before it. [Max: 15 words.]
  4. Compare the most easing cycle to the ones that came before it. [Max: 15 words.]

Problem 3: Interest Rates

  1. Plot the Federal Funds rate, the interest rate on 2-year treasury securities (DGS2), and 10-year treasury securities (DGS10). 2000-2025
  2. Plot the “real interest rate” by combining date on inflation expectations (EXPINF2YR) and nominal interest rates (DGS2). 2000-2025