War and Crypto ECON 4312.
Answer the questions in your own words and essay format. Do not work with your colleagues on this exam as it is meant to gauge your level of understanding and performance individually, not collectively. Collective work, when detected, will be punished in two ways:
I will assign 0 credit to the exam, and
In more egregious cases I will file academic misconduct charges and seek a failing grade for the course.
Your sentences should be your own; not those of the readings (go easy on the quotes; half a line to a line of quotes is fine but four lines for a quote is not acceptable), your fellow students, or anyone else. To detect any collusion or plagiarism, your answers must be collected into one PDF file and submitted to the “War and Crypto Exam” drop box found under “Lessons” in the BlackBoard course site. All use of sources, including the books must be cited in MLA, APA, or Chicago style format, so you should have a bibliography section at the end. The answers should be written in a readable essay format. No stream of conscious. No sentence fragments. I will grade on grammar and spelling. It should be written professionally. In terms of length, the answers should be as long as needed to answer the question. This is probably in the range of 2 to 4 pages. Read through it several times before submitting to ensure it is clear. Feel free to use the Writing Center as well.
Use Excel to produce the graphs and import the graphs into your PDF. Do not submit Excel files unless I ask specifically for them through an e-mail request. Be sure all axes, series, and important data points are labelled, but avoid cluttering your graph. Label the graphs “Figure 1”, “Figure 2” and any tables used as “Table 1” or “Table 2” along with a title describing the main point of the graph. As an example, “Figure 1 – Bitcoin Total Market Capitalization Growth” or “Table 1 – Statistical Analysis Results of Dogecoin”. Tables should be small and to the point; do not paste your entire data set on one table. I will penalize the grade heavily for unnecessarily complex and cluttered tables and graphs. Graphs should be made in Excel; I will not accept graphs generated from FRED unless I otherwise explicitly tell you in the directions. I will further not accept the use of someone else’s graph. If the data is important, find it and recreate the graph with your own skill. If you can’t get the data and recreate it, then treat it skeptically and do not include that graph except in perhaps a cited summary of someone else’s results.
Your graph should be elegant, in black and white (no color), simple, and communicate your ideas clearly. No 3D, no memes, no colorful backgrounds, no “glows”. Only include marker lines for the axis points. Do not include the axis marker lines as is done in FRED graphs. The graph should emphasize the movements in the data. Please revisit the Barnett exam for an example of the graph format desired.
Make your own graphs.
This exam is worth 40 points and will be scored according to the rubric provided Your exam will be graded on an “overall” basis; so if the writing is poor on part 1, but good on part 2, that will be considered together as a whole (it will average out). The questions will involve the use of data, theory, policy, graphs, and professionalism as outlined in the rubric.
Any appeals must be made in writing within two business days of receiving the grade.
Suggested Schedule of Work:
I am scheduling this over a five week period. You have longer, but I believe five weeks should be sufficient to complete most of the work. Manage your time appropriately.
Week 1: Read through all the questions and the rubric; plan ahead. Find all data sources. Contact me if you have any trouble.
Week 2: Gather and graph all data, spend time making the graphs clean and readable.
Week 3: Re-read source material. Make a bibliography.
Week 4: Outline, draft, and revise solutions to the problems with an eye for clarity. Convert your word document to a PDF and save any Excel work into a single file. Remember to hold on to the Excel file and only submit if I request it through e-mail.
Week 5: Last edits. Turn in your PDF to the drop box in BlackBoard.
Data. Import the graphs into your Word file. Don’t paste your Excel spreadsheet, just the graphs.
Create a Data Dashboard for Ethereum. The purpose is to consider whether Ethereum is more of a medium of exchange, store of value, or speculative asset.
Include a line graph of the Coinbase Ethereum (CBETHUSD) in monthly levels from April 2017 to the last observation.
Using scatterplot graphs compare the logged price of Ethereum to the following other series:
Shiller’s Home Price Index,
The US Ten Year Treasury bond rate (tag DGS10).
Create a data dashboard of long run and short run economic indicators for the Russian Federation. Some of these indicators will be monthly, some will be quarterly. Be aware there may be gaps in the data.
Consumer Price Index: All Items for Russian Federation. Tag: RUSCPIALLMINMEI. Change to % Change from Year Ago, Monthly Data, from 2011-12-01 to last observation.
Registered Unemployment Rate for the Russian Federation. Tag: LMUNRRTTRUM156S. Keep at levels “lin”, from 2011-12-01 to last observation.
Gross Domestic Product by Expenditure in Constant Prices: Total GDP for the Russian Federation. Tag NAEXKP01RUQ652S. Quarterly data, change to % Change from Year ago, from 2011-12-01 to last observation.
Collect and graph short run daily data from recent events using the source suggested. Take your data back to December, 2021, when possible.
The USD/RUB exchange rate off Yahoo! Finance: https://finance.yahoo.com/quote/RUB=X/
The Ethereum/RUB exchange rate off Yahoo! Finance: https://finance.yahoo.com/quote/BTC-RUB/
The MOEX Russian stock market index from March 2021 to at latest March of 2022 (you can use April 2022 if the data permits).
Research and describe in detail the money rule that generates growth in the cryptocurrency Ethereum. Approach the Ethereum money rule from the perspective of Boettke, Salter, and Smith (2021) in Chapters 6 and 7, and critique it from the Rules vs. Discretion debate.
Using recent resources describe as you would to a client or outside-class reader what it means for Russia to be taken off of “SWIFT”. What is SWIFT? What does this mean for the Russian monetary system and those who hold Rubles? What do you anticipate the effect on ouput (GDP), employment, and inflation will be in Russia?
Dr. Mattson insists strongly that Ethereum should have an algorithmic Taylor Rule which will target short term interest rate lending using ethereum based solely on the value of transactions within the entire Ethereum Network and the changes in prices (inflation) of all goods and services purchased on Ethereum. That is to say, he is once again being a broken record on the Taylor Rule:
i_(Eth,t)=i_(Eth,t-1)+β_y Δy_(t-1)+β_π π_(t-1)
Where i_Eth is the short term lending rate, Δy is the growth in the value of transactions, and π is the changes in an overall aggregate price level of Ethereum goods and services. The β values are the weight of importance placed on each of the variables and will be determined at the discretion of a committee of Ethereum stake holders representing users of the four services of money: medium of exchange (Ethereum consumers), store of value (regulated Ethereum banks), unit of account (Ethereum academics), and speculation (unregulated Ethereum financial firms). This committee will meet in Basel, Switzerland, each quarter to re-evaluate the weights.
Critique Dr. Mattson’s money rule on grounds similar to the arguments in Salter et al (2021) and Barnett (2012).
Criticize Dr. Mattson’s rule on ethical grounds. Consider the stakeholders of Ethereum (not just those on his vaulted committee): money users, firms, banks, contract makers, lenders, borrowers, speculators, etc. Consider the harm/benefit that could come to these stakeholders from such a rule. In other words, is this a good rule? Or a bad one?
Choose two stake holders from the list: Russian Oligarchs, Russian Households, Ukrainian Refugees, Ukrainian Households still in the country, US dollar holders, Ethereum holders, the Federal Reserve. Consider in conjunction the Executive Order given in Marcho n cryptocurrency and the narrative of increasd crypto regulation abroad. Describe the harm and benefit potential for each of your stake holders. Take a position regarding increased ability of the FBI to audit and access data on holders of Ethereum, as well as increased capital gains tax on any realized gains from Ethereum trades as a way to help fund and dissuade criminal activity using Ethereum. Consider the harm and benefit to both stake holders and craft an ethical argument for or against increased scrutiny and taxation on crypto.