For this assignment, select a supply shock from the list below and research articles that describe the event and the perspective of what caused the event. The assignment should contain the following key elements:
1. A through description of the supply shock and economic perspective
a. Describe the shock
b. What were the causes
c. What were the effects
- Prices, wages, commodity prices (specific goods)
2. What should have been the appropriate policy response (according the theory)
a. What were the policy responses (fiscal/discretionary)?
b. Where these correct or not?
- Explain why the response was correct or not
3. Use FRED data to support the causes and effects of a supply shock
a. (No more than 3-4 graphs)
4. Support your position with appropriate references
Supply Shock List
• OPEC oil embargo 1973-1974
• Bad crop harvests (1970s)
• Oil supply shock of 1979
• Drought that caused beef prices to increase (2012)
• U.S. oil and fracking 2014