Supplemental web page
Estimating
key macroeconomic relationships at the undergraduate level:
Taylor rule and Okun's Law examples
Department
of Economics
College of the Holy Cross
Worcester, MA
tel: 508/793-2682
fax: 507/793-3708
e-mail: mcahill@holycross.edu
Presented
at the 2006 Meeting
of the
American Economic Association
and Allied Social Science Associations
Boston, MA
Computer
Assisted Instruction: New Work on Instructional Applications (A2)
(Organized by the AEA)
Jan. 8, 2006 8:00 am
Abstract
This paper presents some Excel-based exercises that allow students to estimate some key macroeconomic relationships: Okun's Law and the Taylor rule. The Okun's law exercise has the additional benefit of providing estimates for long-run GDP growth. The Taylor rule exercises give students the opportunity to replicate, and then improve upon a seminal paper in macroeconomics. Overall, these exercises give students an introduction to some key aspects of conducting empirical research in macroeconomics, including manipulating models into a form that can be estimated and gathering and manipulating data. In addition, the exercises provide students with useful spreadsheet skills that can be used in other assignments and other arenas, long after graduation.
Download complete paper (PDF)
Download presentation (PDF)
Examples in Paper and Presentation
Okun's Law Example (growth rate version)
Okun's Law Example 2 (not in original paper)
Taylor Rule Lab 1: Replicating Taylor (1993)
Taylor Rule Lab 2: Estimating Taylor rule parameters