2020 Macroeconomics Notes For February 28th, March 2nd, March 4th For Kaplan
2020 Macroeconomics Notes For February 28th, March 2nd, March 4th For Kaplan Econ 2020
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This 4 page Class Notes was uploaded by Robin Silk on Friday March 4, 2016. The Class Notes belongs to Econ 2020 at University of Colorado at Boulder taught by Jay Kaplan in Spring 2016. Since its upload, it has received 38 views. For similar materials see Principles of Macroeconomics in Economcs at University of Colorado at Boulder.
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Date Created: 03/04/16
Wednesday March 2nd 1. Current Events a. ISM Index: Reflection of the manufacturing sector i. When it has a value equal to 50, it is neutral 1. February 2016: 49.5 2. January 2016: 48.2 ii. Improvement due to increased domestic spending iii. Weakness due to 1. Dollar appreciation: Increased price of US exports 2. Oil prices are going down: Demand for oil gathering related equipment is going down iv. China’s ISM is at the lowest it has been in four years v. Europe’s ISM has not grown much in recent times 1. These things mean that the US needs to rely on US consumers to drive demand; foreign demand is not going to play a big role b. Illegal Immigration in America Arizona i. Pew Research Center Data 1. 6.7mil population in Arizona 2. 1990 2005: illegal immigrant population has grown by 450,000 (5x) 3. 2004: Arizona introduces new laws to try and stop illegal immigration a. Everify system: federal way to check if documents are legit 4. 2007 2012: Outmigration of undocumented workers from Arizona results in ~40% leaving, roughly 200,000 ii. Economics of Illegal Immigrants 1. Positives a. Increased labor force; this expands the PPF b. cheaper labor for business owners 2. Negatives a. Job displacement; more competition for low skill work b. Don’t contribute to taxes, pay medical bills; taxpayers have to carry the burdens 3. Benefits to Arizona of a Decrease in the Population of Illegal Immigrants a. Net cost to Arizona taxpayers roughly equal $1b per year to subsidize illegal immigrant living expenses i. Education ii. Healthcare iii. Incarceration b. Benefits to nativeborn construction & agricultural workers when illegal immigrants leave i. Increased job opportunities ii. Wages increase (6%) 4. Costs to Arizona due to Outmigration a. UA Udall Center i. When considering all immigrants, there is a net gain of roughly $1b annual tax revenues b. Moody’s Analytics i. Between 20082015, the annual state GDP decreased by 2% ii. Reduction in total state employment by 2.5% March 4th 1. Current Events a. February Job Report: +242,000 jobs b. Stocks i. Microsoft stock share price is $52 ii. iii. Dividend = $1.44 / 4 Yield = 2.83% 2. Portfolio Theory a. Maximize Return b. Minimize Risk c. Beta = 1.01 i. Beta explains historic changes in share price in relation to the S&P 500 1. B=1, over time, share prices move w/ market 2. B>1, over time, share prices move more than the market 3. B<1, over time, share prices move less than the market ii. ex: when B = 1 and S&P increases by 10%, the stock will go up 10% iii. when B = 2 and S&P increases by 10%, the stock will go up by 20% d. Risk types i. Systematic Risk ~ Market Risk ii. Unsystematic Risk ~Related to Specific Companies. A certain firms shares 3. Mutual Fund a. Index Fund: S&P 500 Index i. Load Fund: Upfront fee; something like 3% of deposit is taken ii. No Load Fund: 0% fee. iii. Management Fees 1. Fees can range widely. Try to invest somewhere with a low management fee b. c. Minimize unsystematic risk associated with a specific company by having a portfolio of 20+ firms, roughly equally weighted i. Once you get to this point you are only left with systematic risk d.
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