Macro and Micro Economics

TWO ESSAYS one on Micro and one on Macro:

Essay #1 (Microeconomics):

Introduction: We are living through an unprecedented time, what some are calling a once in a hundred years pandemic. This is affecting daily life, both at home and for many, also in the workplace. All people living in the U.S. have made adjustments. We have spent time sheltering in place to stop the spread of the covid-19 virus. We have adjusted our shopping and dining habits and foregone many simple pleasures like attending concerts, visiting with family, etc. Even more concerning, since the start of the pandemic, millions of Americans have lost their jobs, and almost 300,000 have lost their lives to COVID.

The Focus: Some economic sectors in our economy have been more negatively affected than others. One example is the commercial real estate sector, which consists of office buildings, retail stores, industrial real estate (warehouses), etc. Another is the restaurant business; the average restaurant in the U.S. has suffered a sizable fall in revenues this year, especially in cities like New York. Both of these sectors are undergoing enormous change. Choose ONE of these sectors to write about. DO NOT WRITE ABOUT BOTH.

Discuss how businesses in your chosen sector are adapting to the pandemic. Make this essay about their micro decisions.

Commercial Real Estate:
If you have chosen to write about commercial real estate, think about the products sold in this space, mostly physical space one can rent:
    In the commercial real estate market, the important price is rents. Discuss the change in commercial rental prices using the supply and demand model. (What demand curves have shifted, and what supply curves have shifted?)
    Are the changes the same for retail space as for industrial warehouses? Why or why not?
    Discuss also at least one new trend in the commercial real estate sector.

Restaurant Sector:
If you have chosen to write about the restaurant sector, think about the service restaurants sell.
    Discuss the business challenges in the restaurant world. Are there price changes, layoffs, a downturn in the demand for indoor and/or outdoor dining?
    What other types of services have restaurants turned to? How have businesses adapted to the new market conditions and regulations from state and local government entities?
    Which new types of new services in the restaurant sector are experiencing an increase in demand?
    Discuss employment conditions in the restaurant sector.
While writing your essay try to use as many terms from microeconomics as possible, as this will show how much you have learned about microeconomics. Some possible terms include the following: demand, supply, substitutes, markets, market structure, monopoly, lack of competition, elasticity, price, entrepreneurs, etc. You can use a couple of examples from our own life, but use the sources provided below and discuss what people in the U.S. or the New York area have faced in general. The essay will judged on your ideas, the organization and clarity of your ideas, and your language and grammar. Aim for 5 to 6 paragraphs. You must submit your essay through Turn-It-in, at the link for the Micro essay.

To inform yourselves, you have a few sources to focus on:

Commercial Real Estate:
1.    Podcast from National Public Radio (NPR): What will happen to Commercial Real Estate as more People work from Home. October 9th, 2020, 3 minutes long:
https://www.npr.org/2020/10/09/922375801/what-will-happen-to-commercial-real-estate-as-more-people-work-from-home

2.    Article from CNN: Commercial real estate flounders as residential housing market booms. September 22, 2020:
https://www.cnn.com/2020/09/22/investing/commercial-real-estate-recession/index.html

3.    Article from Development Magazine, Commercial Real Estate Development Association (NAIOP), written by Ron Derven, Summer 2020: Experts Speak, Covid-19s Impact on the Commercial Real Estate Market
https://www.naiop.org/en/Research-and-Publications/Magazine/2020/Summer-2020/Business-Trends/Experts-Speak-on-COVID19s-Impact-on-Commercial-Real-Estate

Restaurant Sector:
1.    Article from the New York Times: Pandemic Closures Devastate Restaurant Industrys Middle Class, written by Noam Scheiber, Dec. 9, 2020:
https://www.nytimes.com/2020/12/09/business/pandemic-restaurant-middle-class.html

2.    Podcast from Harvard Business School: Is Survival on the post-Covid menu for restaurants? November 11, 2020 (You do not have to listen to the whole thing, and the transcript is the most efficient way to get information from it):
https://www.hbs.edu/managing-the-future-of-work/podcast/Pages/podcast-details.aspx?episode=16761683
Note here that on this podcast from Harvard the guest being interviewed knows a lot about the restaurant industry but is also on the podcast to sell the Toast product. Pay attention to how the restaurant industry is being described and not to the sales pitch.

3.    Article from New York Magazine, All This Is Kind of Killing me Right Now. New Yorks restaurant workers grapple with the crushing mental and physical toll of COVID, written by Chris Crowley, Dec. 10, 2020:
https://www.grubstreet.com/2020/12/nyc-restaurants-workers-covid-fatigue-burnout-mental-health.html
[Note: Some restaurant workers are quoted here using swear words, words that I would never use publicly or condone in class, from either you or from myself. In my opinion they are expressing great stress, frustration and exhaustion. Please forgive them].

4.    Report from the New York State Comptroller on the restaurant sector, Oct. 1, 2020 (very short):
https://www.osc.state.ny.us/press/releases/2020/10/dinapoli-restaurant-industry-critical-new-york-citys-economy

Essay #2 (Macroeconomics):
Introduction: The forced shut down of parts of the U.S. economy this year has led to the highest ever U.S. unemployment claims and the biggest drop in GDP. Since then the economy has recovered dramatically, especially outside of New York.

Focus: I want you to tell a story of what happened to our economy this year. You have three main issues:

1.    Briefly, during the year 2020, and up to the point when we have data, what happened to some of the main economic indicators, like GDP and unemployment? Write about both the absolute debacle that started in March and lasted through the second quarter (April through June) and the recovery that started in the third quarter.

2.    Briefly (one paragraph only), what fiscal policy did the U.S. Senate and the U.S. Congress pass this year to help firms and  unemployed individuals undergoing financial crisis? What monetary policies did the Federal Reserve, our central bank, establish in March and April? Describe the policies and what policymakers hoped for in terms of the AD/AS model. What did policymakers hope for in terms of the AD/AS model?

3.    From an economic standpoint, the pandemic has hit people in the U.S. differently. Discuss the degree of inequity in terms of the impact of unemployment. Who has lost more in terms of jobs and working hours? You can refer to education background, business sector a person worked in, types of jobs, ethnic and racial background, age (new college graduates), gender, wealth, etc. 

While writing your essay try to use as many terms from macroeconomics that refer to unemployment as possible, as this will show how much you have learned about macroeconomics. Some possible terms include the following: AD/AS model, expansionary, monetary policy, fiscal policy, unemployment, layoffs, furloughs, temporary, discouraged worker, labor force, unemployment benefits. Also, you can use a couple of examples from our own life, but use the sources provided and discuss what people in the U.S. or the New York area have faced in general. The essay will judged on your ideas, the organization and clarity of your ideas, and your language and grammar. Aim for 5 to 6 paragraphs. You must submit your essay through Turn-It-in.
To inform yourselves, you have a few sources to focus on:
1.    Podcast from The New York Times, The Daily, November 19, 2020, The Pandemic Economy in 7 Numbers.
https://www.nytimes.com/2020/11/19/podcasts/the-daily/coronavirus-pandemic-us-economy-unemployment.html

2.    Economic Statistics:
a.    The November Unemployment Report from the Bureau of Labor Statistics, published Dec. 4th, 2020: https://www.bls.gov/news.release/pdf/empsit.pdf (Focus on page 7).
b.    Details on New York State unemployment: https://www.bls.gov/regions/new-york-new-jersey/new_york.htm
c.    Prof. Raj Chettys website at Harvard University: https://tracktherecovery.org/ This is optional.
d.    The report on 3rd quarter 2020 GDP from the U.S. Bureau of Economic Analysis: https://www.bea.gov/data/gdp/gross-domestic-product
e.    Slides: see pdf attachment with four slides on data, fiscal policy and monetary policy.

3.    Podcast from Wall Street Journal, December 1st: Black Workers Face Economic Disparities in Pandemic Recovery. Link: https://www.wsj.com/podcasts/whats-news/black-workers-face-economic-disparities-in-pandemic-recovery/ED4B868D-69A6-44B7-8CD5-7227978DD0F4

4.    Podcast from Wall Street Journal: https://www.wsj.com/podcasts/your-money-matters  Go down the page to the December 4th episode, Class of 2020: Getting Their Job Search Back on Track.

Some tips on writing for both essays:
1.    Use paragraphs to organize your ideas.
2.    Use transition sentences between paragraphs and to guide your reader from idea to idea.
3.    Start sentences with word that is capitalized. End sentences with a period.
4.    Avoid the passive voice and try to use the active voice.
5.    Avoid run-on sentences. One way to do this is to write shorter sentences.
6.    Make sure you eliminate spelling mistakes from your paper.
7.    Capitalize all proper nouns.
8.    As you write your sentences please do not repeat the same words from sentence to sentence, as the reader gets bored reading your sentences. (Note how boring this sentence was to read!!)

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