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Levinson Paper #2

Winter 2018 Levinson Paper #2 Principles of Macro
Due Monday 26 March

This paper should be neatly printed in double space, edited and proofread. I encourage you to work with someone to make sure you have a clear theme, good examples, and compact prose. Please feel free to schedule time with the Wms School Communication Center in the basement of Huntley. They will want you to bring a draft with you.

You will need a paragraph to state your topic, though your first sentence should provide a succinct statement. You likely need 3-5 paragraphs to develop your topic. Conclude with a paragraph (or two). Don't summarize or otherwise repeat things you've just said. Rather, wrap your paper up by noting questions that Levinson leaves unanswered, or an argument you find incomplete or insufficiently detailed to be compelling.

The target length is to be as brief as you argument permits, or about 3-5 pages double-spaced. If you are concise you can make a good argument in 3 pages, but 5 pages is acceptable. If you're writing 8 pages, check that it's not because you're prolix and repetitive! Finally, you should use explicit examples – an old journalist rule of thumb is to have two examples or pieces of data for every claim.

It is entirely appropriate to use quotes from the book. If lengthy, double-indent and single-space. Use inline citations (the page number in parentheses), not footnotes or endnotes. I don't expect you to use outside sources, though a graph from FRED may help you make a point or question one of his claims. Since FRED graphs are clearly labeled as such, you don't need to cite the source.

The Levinson book is rich in macroeconomic themes. The second half, for example, begins in Chapter 9 with Simon Kuznets and income distribution, which leads in a circuitous manner to a discussion of social insurance and anti-tax political movements. Earlier he looked at Karl Schiller and the planning mindset of policymakers in that era – he could equally well have looked at Minister of Finance (and later Prime Minister) Ikeda (池田勇人) in Japan. Then there's his discussion of Raul Prebisch and import substitution policies in developing countries, and Arthur Burns with rule-of-thumb monetary policy, and the growth of the Basel-based Bank for International Settlements out of a series of bank crises rooted in the globalization of finance. Oh, yes, crises: another palette upon which you can draw. The book does not lack in themes!

Levinson, however, does not preach Principles, and only occasionally makes reference to the theories and concepts we develop in Econ 102. In contrast, your paper should make explicit use of jargon and refer to our theories. You are free to "pitch" a topic of your own. Otherwise I suggest you use one of the following themes: ... (I may add to the list)

  • Focus on one demand-side policy response (direct or indirect) to the return to today's "Ordinary" time.
    1. What was the policy, and how did it in principle [our theory] affect the macroeconomy?
    2. What did the policy in fact accomplish?
    3. What side effects did it have?
    4. Other details? Did an array of countries do this, and did it work the same everywhere? (This is a better as a conclusion than as a paper topic.)
  • Focus on one supply-side policy response, as above. Note that this is probably a harder topic.

    1. What was the policy, and in principle how did it affect the macroeconomy?
    2. Did it accomplish its goals?
    3. Exceptions / extensions for your conclusion!
  • Other topics – run them past me so that I can make sure you don't wander too far from our Principles. Examples might include:
    1. the international debt crisis
    2. shifts in regulation of the financial system, and
    3. and fiscal sustainability. Will the political economy of taxation allow countries to impose fiscal rationality?