Using relevant academic literature and empirical studies, you will compare and contrast the economic conditions of the late 1920s-early 1930s Great Depression
and the 2007-2009 United States recession by analyzing governmental, financial, and public institutional reactions then and now. This comparison will take the
form of an 8-1O-page (not including cover page and references), research-based analysis paper of interest to fellow colleagues unfamiliar with the discipline of
economics. This project will cover the following course outcomes:
- Determine how economics concepts, variables, and tools influence business decision making in various contexts
- Analyze how institutions and political policies have affected economic theory and how changes to economic theories and tools have been integrated
into other disciplines and public policy
- Evaluate limits to economic theories and models, as well as recent efforts to improve economic models, analysis, and forecasting for economic
decision making
- Illustrate the influence of economic thinking on organizational structure by determining how aligning financial, monetary, and performance
incentives with decision rights may support corporate goals and efficiency
- Analyze how quantitative analysis and the use of graphs, equations, and models is a key foundation for the study of economics
The following critical elements should be addressed in your submission:
A. Analyze relevant scholarly economic research into the two events (Great Depression and the 2007-2009 United States recession) and the impact on institutions, public policies, and regulations during these timeframes.
1. Comparison of Events: What was the extent of economic decline in each of the two events? Discuss in terms of GDP, unemployment, and other
major economic variables.
2. Government Reactions: Compare changes in the government reactions to the initial shocks to the economy and the initial adjustments to the
regulation of business and financial institutions.
3. Effects on Business Decision Making: Compare the effects of the shocks on the economy to business decision making in the public sphere during
the relevant time periods.
B. Analyze the influences of changing economic conditions on economic thinking historically and today.
1. Economic Models: How did the nature of economic models and their use in policy making change during these time periods?
2. Forecasting: What were some of the forecasting limitations or successes during these time periods?
3. Quantitative Analysis: Support your analysis using appropriate tables, graphs, equations, and/or models. Discuss how quantitative analysis and
quantitative models are important to the analysis of your chosen economic theories.
C. Discuss the role of economic thinking in the nature of business organization. In particular, discuss the "Agency Problem," principle agent problem, and moral hazard. Describe ways they may have contributed to corporate behaviors that influenced economic problems during the recession. Include an analysis of executive managerial incentive structures.
D. Provide a summary of how your analysis can inform business practices, public policy, and/or other disciplines of study in 2014.