Writing Economics: A Guide for Students, Study notes of Economics

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Writing Economics

Robert Neugeboren with Mireille Jacobson

@2001 The President and Fellows of Harvard University (minor revisions in Jan. 2005)

Acknowledgments

This guide was proposed and supported by The Harvard Writing Proje ct. Nancy Sommers, Sosland Director of Expository Writing, and Kerry Walk, Assistant Director of the Writing Project, read drafts, gave advice, and saw the project through from inception to completion. Kerry Walk wrote the section on Formatting and Documentation (chapter 5). Christopher Foote, Assistant Professor of Economics and Director of Undergraduate Studies, wrote part of chapter 3 and commented on drafts of the whole work. Oliver Hart, Michael Murray, Lorenzo Isla, Tuan Min Li, Allison Morantz, and Stephen Weinberg also gave very helpful comments. Special thanks to Mireille Jacobson, who compiled the appendices, added examples, and revised and proofread the text. Thanks also to Anita Mortimer and the Economics Tutorial Office.

Contents

1 Introduction | The Economic Approach 1 Economics and the Problem of Scarcity 2 The Assumption of Rationality 3 The Theory of Incentives 3 Writing Assignments in Economics 970 4 Plan of This Guide

5 One | Writing Economically 5 Getting Started 6 The Keys to Good Economics Writing 7 An Example from the Literature 8 Achieving Clarity 10 Managing Your Time

11 Two | The Language of Economic Analysis 11 Economic Models 12 Hypothesis Testing 13 Regression: An Example 14 Improving the Fit 14 Applying the Tools

16 Three | Finding and Researching Your Topic 16 Finding a Topic for a Term Paper 18 Finding and Using Sources 19 Doing a Periodical Search 19 Taking and Organizing Notes

21 Four | The Term Paper 21 Outlining Your Paper 22 Writing Your Literature Review 23 Presenting Your Hypothesis 24 Presenting Your Results / by Chris Foote 29 Discussing Your Results

30 Five | Formatting and Documentation / by Kerry Walk 30 Placing Citations in Your Paper 32 Listing Your References 34 Sample References Entries

44 Appendix A | Fields in Economics

47 Appendix B | Standard Statistical Sources

49 Appendix C | Electronic Indices to Periodical Literature

Introduction | The Economic Approach

Economists study everything from money and prices to child rearing and the environment. They analyze small-scale decision-making and large- scale international policy-making. They compile data about the past and make predictions about the future. Many economic ideas have currency in everyday life, cropping up in newspapers, magazines, and policy debates. The amount you pay every month to finance a car or new home purchase will depend on interest rates. Business people make investment plans based on expectations of future demand, and policy makers devise budgets to achieve a desired macroeconomic equilibrium. Across the broad range of topics that interest economists is a unique approach to knowledge, something common to the way all economists see the world. Economists share certain assumptions about how the economy works, and they use standard methods for analyzing data and communicating their ideas. The purpose of this guide is to help you to think and write like an economist.

ECONOMICS AND THE PROBLEM OF SCARCITY

Since its beginnings as “the dismal science,” economics has been preoccupied with the problem of scarcity. The hours in a day, the money in one’s pocket, the food the ground can supply are all limited; spending resources on one activity necessarily comes at the expense of some other, foregone opportunity. Scarcity provides economics with its central problem: how to make choices in the context of constraint. Accordingly, economists ask questions such as: How does a consumer choose a bundle of commodities, given her income and prices? How does a country choose to meet its objectives, given its national budget? How do decision-makers allocate scarce resources among alternative activities with different uses? While this central economic problem may be rather narrow, the range of topics that interest economists is vast. Indeed, insofar as it can be characterized as choice under constraint, any kind of behavior falls within

the scope of economic analysis. As Lord Lionel Robbins (1984), one of the great economists of the twentieth century, put it:

We do not say that the production of potatoes is economic activity and the production of philosophy is not. We say rather that, in so far as either kind of activity involves the relinquishment of other desired alternatives, it has its economic aspect. There are no limitations on the subject matter of Economic Science save this.

It should come as no surprise that economists are sometimes called “imperialists” by other social scientists for their encroachment on fields that traditionally belong to other disciplines. For instance, historians studying the migration patterns of eighteenth-century European peasants have explained the movement out of the countryside and into the cities in terms of broad social and cultural factors: the peasants were subjects of changing times, swept along by the force of history. By contrast, economists, such as Samuel L. Popkin (1979), have attributed urban migration patterns to the trade-offs faced and choices made by individual actors; from this perspective, the behavior of these peasants was rational.

THE ASSUMPTION OF RATIONALITY

Economists approach a wide range of topics with the assumption that the behavior under investigation is best understood as if it were rational (though we know that not all behavior is, in fact, rational) and that the best explanations, models and theories we construct take rationality as the norm. Rationality, in the words of Frank Hahn, is the “weak causal proposition” that sets all economic analyses in motion. “Economics can be distinguished from other social sciences by the belief that most (all?) behavior can be explained by assuming that agents have stable, well- defined preferences and make rational choices consistent with those preferences” (Colin Camerer and Richard Thaler, 1995). Rationality, in the standard sense of the economist, means that agents prefer more of what they want to less. This may seem like a rather strong proposition, insofar as it seems to imply that human behavior is necessarily calculated and self-interested. But the assumption of rationality does not imply anything about the content of agents’ wants, or preferences; hence to be rational is not necessarily to be selfish. One can want others to be better off and rationally pursue this objective as well. Economists assume that whatever their preferences, agents will attempt to maximize their satisfaction subject to the constraints they face. And good economics writing will take the assumption of rational behavior as its starting point.

THE THEORY OF INCENTIVES

The theory of incentives posits that individual agents, firms, or people, make decisions by comparing costs and benefits. When costs or benefits – the constraints on choices – change, behavior may also change. In other words, agents respond to incentives. Many recent developments in economics and public policy are based on the theory of incentives. For example, recent welfare reforms recognize that traditional welfare, which guarantees a basic level of income but is taken away once that level is surpassed, provides incentives for those below the earnings threshold to stay out of the formal workforce. This and other criticisms have led to the adoption and expansion of programs such as the Earned Income Tax Credit (EITC). The EITC seeks to rectify this particular incentive problem by making transfers only to working individuals. Such policy changes suggest that incentives matter for behavior. Thus, a thorough analysis of any behavior, and a well-written account of it, must account for incentive effects.

WRITING ASSIGNMENTS IN ECONOMICS 970

In Sophomore Tutorial (Economics 970), you will receive several writing assignments including a term paper, an empirical exercise, short essays, response papers, and possibly a rewrite. Below is a description of these types:

• Term Paper (10–15pp.). In all tutorials , you will be required to write a term paper that addresses a topic in depth and combines skills developed throughout the semester. It usually builds on earlier short assignments, including a prospectus, in which you will propose a thesis or question and detail how the issue will be addressed. This term paper may require research beyond what has been assigned to the group. It typically includes a literature review, an empirical component, a discussion of results, and perhaps a discussion of policy implications.
• Empirical Exercise (5–6pp.). All tutorials also assign some kind of empirical exercise in which you will analyze economic data using a standard statistical software package (such as STATA). The empirical exercise will give you experience in answering an economic question with data and/or drawing conclusions from evidence.
• Short Essays (4–6pp.). Short essays may require you to analyze two articles and compare their policy implications, explain a model, criticize an argument, present a case study, extend a theory, evaluate an intellectual debate and so on.
• Response Papers (1–2pp.). Response papers might involve summarizing the weekly readings or answering a specific question about the text. These will help get you thinking and stimulate class

discussion. They can also build the skills needed for writing successful longer papers.

Make sure you clear up any confusion about the assignment by asking your tutor specific questions about what he or she is looking for. The earlier you get clarification, the be tter able you will be to complete the assignment (and get a good grade). For longer papers, you may want to hand in rough drafts. Getting feedback may improve your writing considerably and generally makes for more interesting papers.

PLAN OF THIS GUIDE

Understanding the way economists see the world is a necessary step on the way to good economics writing. Chapter 1 describes the keys you need to succeed as a writer of economics and offers an overview of the writing process from beginning to end. Chapter 2 describes the basic methods economists use to analyze data and communicate their ideas. Chapter 3 offers suggestions for finding and focusing your topic, including standard economic sources and techniques for doing economic research. Chapter 4 tells you how to write a term paper. Finally, Chapter 5 provides a guide to citing sources and creating a bibliography. Three appendices provide useful information for developing your term papers. Appendix A provides a roadmap of fields in economics and can help define very broad areas of interest. Appendix B lists some standard statistical sources that you may wish to use for your own research and appendix C lists the relevant electronic indices to periodical literature, invaluable resources for the initial stages of any paper.

One | Writing Economically

Pick up any publication of the American Economics Association and you will discover a few things about writing economics. First, the discourse is often mathematical, with lots of formulas, lemmas, and proofs. Second, writing styles vary widely. Some authors are very dry and technical; a few are rather eloquent. You don’t have to be a great “writer” to produce good economics writing. This is because economics writing is different from many other types of writing. It is essentially technical writing, where the goal is not to turn a clever phrase, hold the reader in suspense, or create multi-layered nuance, but rather to achieve clarity. Elegant prose is nice, but clarity is the only style that is relevant for our purposes. A clear presentation will allow the strength of your underlying analysis and the quality of your research to shine through. If you’ve ever pulled an all-nighter and done reasonably well on the assignment, you may be tempted to rely on your ability to churn out pages of prose late at night. This is not a sensible strategy. Good economics papers just don’t “happen” without time spent on preparation; you cannot hide a lack of research, planning and revising behind carefully constructed prose. More time will produce better results, though returns to effort will be diminishing at some point. Here, too, the principles of economy apply.

GETTING STARTED

Getting started is often the hardest part of writing. The blank page or screen can bring on writer’s block, and sustaining an argument through many pages can seem daunting, particularly when you know your work will be graded. Don’t let these concerns paralyze you; break the paper down into smaller parts, and get started on the simpler tasks. Economics writing usually requires a review of the relevant literature (more on this later). Especially if you’re stuck, this can be a great way to begin.

THE KEYS TO GOOD ECONOMICS WRITING

Writing in economics, as in any academic discipline, is never simply a matter of asserting your opinions. While your ideas are important, your job includes establishing your credentials as a writer of economics, by demonstrating your knowledge of economic facts and theories, identify- ing and interpreting the underlying economic models, understanding what others have said about the relevant issues, evaluating the available evidence and presenting a persuasive argument. Even if you don’t write particularly well, you can produce good economics papers by attending to three basic tasks:

Research Economic research often entails pouring over reams of data from any of a number of standard statistical sources (see appendix B). For some assign- ments, you will want to begin your paper with a review of the literature on the topic. For a term paper, this might entail an exhaustive library search (see appendix C); for other assignments, you may need to reference only a single paper your instructor has assigned. In general, your writing will reflect the quality of your research, and good writing will demon- strate that you understand the findings that are relevant to your topic.

Organization Once you have found your sources, you will need to organize your ideas and outline your paper. Economists usually organize their writing by using simplified models (such as supply and demand, cost/benefit analysis and comparative advantage). Therefore, a literature review is often followed by the presentation of a model, usually one of the standard models or, for the theoretically inclined, one of your own devising. Models are used to organize data and generate hypotheses about how some aspect of the economy works.

Analysis Reducing something complex into simpler parts is an integral part of economic rigor. Statistical analysis (or econometrics) takes vast piles of data and returns useful numerical summaries that can be used to test various economic models and make predictions about the future. Mathematics is very helpful here because it is a precise language that can articulate the way basic economic relations are conceptualized, measured and defined. Nonetheless, even before you have mastered sophisticated statistical and mathematical techniques, your goals should be writing clearly, following a line of deductive reasoning to its conclusion and applying the rules of inference correctly. These are the marks of good economics writing.

AN EXAMPLE FROM THE LITERATURE

Generally, in the first few paragraphs of a paper, economists set up their research question as well as the model and data they use to think about it. This style can be useful to both writer and reader as it establishes the structure of the work that follows. Unfortunately, it sometimes means a stilted or dry presentation. An excerpt from a piece by two of the field’s most eloquent authors, Claudia Goldin and Lawrence F. Katz (1996), illustrates a skillful approach to setting up a research question, placing it in the literature and outlining how the work to follow extends existing research. Notice, in particular, that these steps need not be completely independent. The piece, taken from the authors’ work on the historical relationship between technology, human capital, and the wage structure, starts by presenting the facts motivating the question:

Recent technological advances and a widening of the wage structure have led many to conclude that technology and human capital are relative complements. The possibility that such a relationship exists today has prompted a widely held conjecture that technology and skill have always been relative complements.

Next they explain the existing theories behind this relationship:

According to this view, technological advance always serves to widen the wage structure, and only large injections of education slow its relentless course. A related literature demonstrates that capital and skill are relative complements today and in the recent past (Zvi Griliches, 1969). Thus capital deepening appears also to have increased the relative demand for the educated, serving further to stretch the wage structure.

Then they clearly and simply state their question:

Physical capital and technology are now regarded as the relative complements of human capital, but have they been so for the past two centuries?

Next they cite more of the related literature:

Some answers have already been provided. A literature has emerged on the bias to technological change across history that challenges the view that physical capital and human capital have always been relative complements.

Finally they propose how they seek to answer this question:

We argue that capital-skill complementarity was manifested in the aggregate economy as particular technologies spread, specifically batch and continuous process methods of production.

Their paper goes on to establish the empirical evidence that backs up this assertion. As evide nced by the example above, the clarity of your prose, the quality of your research, the organization of your argument, and the rigor of your analysis are the keys to your success as an economics writer.

ACHIEVING CLARITY

Clear writing is easy to read but hard to write. It rarely occurs without considerable effort and a willingness to revise and rework. As McCloskey (1985), the dean of economics writing, tells us: “it is good to be brief in the whole essay and in the single word, during the midnight fever of composition and during the morning chill of revision” (McCloskey, 1985). The rules of clear writing apply to the organization of the entire paper, to the order of paragraphs, to sentences and to words. Few writers achieve clarity without continual editing. Once you have your basic ideas down, be sure to reread and revise your work. Clarity can be achieved in stages:

• Organize your ideas into an argument with the help of an outline.
• Define the important terms you will use.
• State your hypothesis and proceed deductively to reach your conclusions.
• Avoid excess verbiage.
• Edit yourself, remove what is not needed, and keep revising until you get down to a simple, efficient way of communicating.

This last stage is crucial. Take, for example, the following excerpt from a student’s short response paper:

In the beginning of the 1980’s, the problem of homelessness in the United States became apparent (Richard B. Freeman and Brian Hall, 1989). Since then, the number of homeless in this country has continued to grow. While the problem of homelessness, in itself, is obviously a problem that is quite relevant to other fields of economic study, it has also given rise to a phenomenon that is an interesting topic for the study of behavioral economics: the donation of money to help the homeless population.

With a little revision, the author could have achieved a more clear and concise introduction:

Early in the 1980’s, increasing homelessness in the United States became apparent (Freeman and Hall, 1989). Since then, the number of homeless has continued to grow. While homelessness is studied in many fields of economics, it has given rise to a particular phenomenon

• the donation of money directly to the homeless – that interests behavioral economists in particular.

Below are some additional tips to achieving clarity and some examples that apply them. These and many other useful tips can be found in Strunk and White (1979).

Use the Active Voice It turns a weak statement (first one) into a more direct assertion (second statement):

In this paper, the effect of centralized wage-setting institutions on the industry distribution of employment is studied.

This paper studies the effect of centralized wage-setting institutions on the industry distribution of employment.

Put Statements in Positive Form

Many day-traders did not pay attention to the warnings of experts.

This statement is more concisely conveyed as follows:

Many day-traders ignored the warnings of experts.

Omit Needless Words

In spite of the fact that the stock market is down, many experts feel that financial markets may perform reasonably well this quarter.

A better way to express the same thing is:

Although the stock market is down, financial markets may still perform reasonably well this quarter.

In Summaries, Generally Stick to One Tense

This study showed that dividend payouts increase when dividend income was less tax-disadvantaged relative to capital gains.

An improvement uses the present tense throughout:

This study shows that dividend payouts increase when dividend income is less tax-disadvantaged relative to capital gains.

MANAGING YOUR TIME

The best laid plans for writing a good paper can be wrecked by poor time management. Make sure you clear up any confusion about the assignment right away. Set deadlines for completing each phase of the project:

• Start the project by finding your topic.
• Begin your research.
• Start an outline.
• Write a draft.
• Revise and polish.

Divide your time, from the moment you receive your assignment to the moment it is due, into segments allotted to each task. Hold yourself to the deadlines you set, and allow yourself time to revise and polish the paper. The payoff will be a better product, a better grade and less anxiety throughout.

Two | The Language of Economic Analysis

The economy is a complex web of interdependent elements, and understanding any part is a significant accomplishment. The price of tea in the US is determined by many factors, including individual preferences (or tastes), labor costs, weather conditions and the price of tea in China, among others. Preferences, labor costs, weather, etc. are in turn connected to other factors, including the price of coffee, which in turn can affect the price of tea. All the parts can be moving simultaneously, making it hard to see what is causing what. To write effectively about economics, you have to understand how economists think about such complicated phenomena. In general, to make their task easier, economists focus on and try to isolate simple causal connections, often between two variables ceteris paribus, or “other things being equal.” “Other things being equal,” what is the effect of a change in labor costs on the price of tea? “Other things being equal,” how does a change in the price of coffee affect the price of tea? This kind of analysis allows economists to say something very precise about well-defined relationships and to run rigorous tests to measure the strength and direction of their connections. Of course, focusing on just one relationship at a time means other relationships are artificially held constant, so that our analyses necessarily diverge from reality. They are hypothetical. But simplification and abstraction are necessary ingredients of any theoretical enterprise, and a good economist knows the real world is more complex.

ECONOMIC MODELS

Economic analysis is characterized by the use of models, simplified representations of how economic phenomena work. Supply and demand, cost/benefit analysis and comparative advantage are examples of basic economic models. A model is a theory rendered in precise, usually mathematical, terms. Economists build models the way curious scientists do: Reduce the phenomenon to its basic elements and recombine these elements so as to produce a model that resembles the original in relevant

respects. Take it apart, figure out how it works, then put it back together and see if it goes. Economic models specify relationships between two kinds of variables: exogenous variables and endogenous variables (Gregory N. Mankiw, 1997). Exogenous variable s are inputs to the model, factors that influence what happens but are themselves determined “outside” the model. They are givens, fixed values that are assumed not to change over the period of analysis. Endogenous variables are outputs of the model, determined “within.” Usually, a mathematical function is used to represent the relationship between exogenous and endogenous variables. Systems of relationships, in which changes in one part of the economy have different consequences in others, are often conveniently represented by systems of functions. For example, we can model the market for compact discs (CDs) in terms of three functions:

The quantity of CDs demanded depends (negatively) on the price of

CDs and (positively) on income (Y): Q d = D(P CD , Y).

The quantity of CDs supplied depends (positively) on the price of plastic (because CDs are made from plastic) and on the price of CDs:

Q s = S(P CD, P P ).

In equilibrium, the quantity of CDs supplied equals the quantity

demanded: Q d = Q s.

In this model, the price of plastic and the level of income are exogenous variables; the price of CDs and the quantity of CDs exchanged are endogenous variables. By plugging data (exogenous variables) into the model, it is possible to predict the behavior of the endogenous variables, thus generating hypotheses about phenomena that have not yet been observed. Applying basic models allows one to make predictions about the real world economy, both forward-looking predictions about, say, future interest rates and backward-looking predictions about, say, the savings rate during the depression. Models also provide guidance about where to look for and how to look at data, and they provide a structure on which the rest of the paper can hang.

HYPOTHESIS TESTING

A model’s predictions about the future or the past are essentially empirical hypotheses: claims, supported by facts, about how some economic phenomenon works. Most economists, aspiring to be good social scientists, would like to test their hypotheses under laboratory conditions. But this is not ordinarily possible. Instead, we take sample

data from the real world, by looking at census reports, balance sheets and the like, and we use statistical methods to test the predictive power of our models and the hypotheses they generate. Most economic data come in, or can be easily transformed into, numerical terms. Prices and quantities are numbers, and economists also attach numerical measurements to factors such as standards of living that do not usually come in quantified form. But a long list of numbers is just that until a relationship among them can be specified that imparts some order. By building and using models, economists are able to focus on simple, sometimes subtle, relationships in the data and explain the causal links at work. Finding the pattern in the data allows one to say something about how the economy works. A set of well-known models can greatly simplify the task of organizing and communicating your ideas. But the real test of a model is how well it helps us understand the workings of the economy.

REGRESSION: AN EXAMPLE

Say, for instance, you are interested in explaining the causes of inflation. You study the literature and learn about a connection between the level of economic activity and the level of inflation. You formulate a simple hypothesis:

Hypothesis: High levels of employment lead to high levels of inflation.

Observations: Monthly employment (X) and inflation rates (Y) in the US from 1980–1995. (Two lists of 12x16 = 192 observations)

Regression: Y = a + b X + c. b measures the correlation between X and Y. If b is positive and statistically significant, the hypothesis cannot be rejected. ( a is a constant; c is an error term.)

In order to run such a regression you will need a fairly large number of observations. Without enough data you may not be able to decide between this and the alternative, or null, hypothesis (i.e., high levels of employment have no relationship to high levels of inflation) by statistical measures alone. In such cases, there may be better ways to do an empirical exercise (e.g. case study; experimental methods). Even with enough data, statistical analyses show correlation, not causation. A model is needed to explain how things work – for instance, how high levels of employment lead to high levels of inflation.

IMPROVING THE FIT

The fit between a model and reality is never perfect. When the fit is good, we can make better predictions about the future and better understand the past. In the former case, the passage of time will fail to disconfirm the prediction; in the latter case, historical research will match our expectations. As in any science, our theories can really only be disproved. However, when our predictions are correct, the weight we place on our models increases. When our predictions are wrong, we are left either looking for more data or perhaps a new or revised model. That model may be used to generate new predictions, which can then be confronted with new data, which may again bring disconfirmation of the prediction and suggest a revision of the current model.

APPLYING THE TOOLS

Most of the writing done in economics involves the application of old models to new data, with the goal of better understanding some real world economic phenomenon. This may or may not involve analyzing a large dataset. This example, taken from an Ec 970 term paper, applies economic tools – namely, game theoretic analysis – to one particular issue, the role of international institutions in the post Cold War era:

The purpose of this paper is to discuss the continuing role of NATO and the likelihood of lasting cooperation among the organization’s member states in a post-Cold War world. Game theory and the study of strategic interactions, although initially devised as a tool for understanding Cold War motives and actions, nevertheless are extremely applicable to a post-Cold War environment. I therefore plan to incorporate several relevant international relations issues into a game theoretical perspective – first to discuss the cooperation that actually occurred in NATO since the 1940s, and then to explain why similar cooperation may be unlikely among security-based regimes after the collapse of the Soviet Union.

Another kind of writing, the theory paper, involves criticizing the models we use and proposing better ones. The goal of the theory paper is to improve the conceptual underpinnings of the particular analytical tools we use to understand the actual economy. This may be a better model of how firms behave in uncertain market conditions, or a new way to measure the level of national economic activity, or a synthesis of existing theories to produce a new, more general theory. Because all economic models are crude approximations of a complex world, it is necessary to assess just how crude the approximations are before we can say which model better fits the data. Interpreting statistics and determining what can and cannot be reliably inferred given the

observations available requires knowledge of economic theory as well as a healthy dose of mathematics. Mathematical logic is also used to build new models, both to formalize the logical structure of the model and to test for its coherence and internal consistency. The mathematics of model building does not involve numbers, but it does specify quantities (quantifiers) and uses well-defined operators to combine (sets of) propositions. Economic theory was not always so mathematical. And the mathematization of economic theory has had costs as well as benefits. The benefits are that, in many cases, more can be said quickly and precisely, because mathematics is a powerful language and convenient shorthand. The cost is that not all relevant phenomena are easily cast in mathematical terms or can be only crudely captured mathematically. Another cost is that economic theory becomes somewhat less accessible to students and to the world at large, in which public policy debates are conducted.

Three | Finding and Researching Your Topic

Economists view the world through the lens of efficiency, starting from the assumption that individuals behave rationally and focusing on the problem of allocating scarce resources. From this common analytical perspective, economists study a wide range of topics, involving the behavior of individuals, organizations and nations. The economic approach can be applied so broadly that choosing a topic to write on can be difficult. Indeed, once you start looking at the world through the eyes of an economist, almost anything can be analyzed in terms of choice under constraint. Your own research has to meet the terms of the assignment as well as the time and other constraints you face. You may need to read books and journal articles in the library or pore over data sets on a computer. In either case, you will need a topic before you can begin. If your instructor gives you a list of topics, a review of related research may help you choose among them. If the research question is entirely up to you, a literature search is often not the best way to begin. Immersing yourself in the literature before you have found a topic may convince you that all the interesting questions have already been tackled. At the very least, literature searches should be guided by very general topic ideas.

FINDING A TOPIC FOR A TERM PAPER

Though there is no one way to find a topic, thinking of the issues that interest you is a great place to begin. While the range of possible topics is large, there are some well-defined fields in economics, and your own interests are likely to fit into one of these (see Appendix A for an annotated list of fields). Course materials, textbooks, handouts, and so on are obvious and convenient places to look, especially since your topic will most likely have to pertain to the course subject. But reading the newspaper and keeping an eye on current events can be even more helpful. Once you have a general idea, you should go to the literature and see how economists have tried thinking about it.

For example, say your interest is piqued by recent shootings in both schools and workplaces. What role has the availability of guns played in these events? What are the effects of banning guns? Implementing tougher gun control laws? Though this might initially strike you as a government or law project, many of the underlying issues are fundamentally economic – gun control measures explicitly place limits on supply and attempt to put guns in disfavor or reduce demand. Once you have identified guns and gun control as an area of interest, do your literature search (more on this later). Pick out the relevant articles and scour them for content as well as for additional sources. Try to narrow down your topic. Have the authors pointed out any future research areas? Are there any issues that you think have not been fully addressed? In addition to finding something that interests you, you will also need a project that can be done within the parameters of the assignment (for example, length, due date, access to research materials). If the topic doesn’t interest you, you probably won’t put in the effort needed to do a good job or ask the right questions along the way. On the other hand, a profoundly interesting topic may not be manageable given the time and other constraints that you face. As another example say you are interested in the stock market and want to know what determines stock prices. From basic economic theory, you know that prices are determined by supply and demand, but what specific relationships do you need to study and what data do you need to gather? You think about it for a while and realize there are many parts to your question. What determines the price of a particular company’s stock is a different question from what determines the level of stock prices in general (as measured by Dow Jones or another index), though the two may be related. And what determined stock prices yesterday might be different from what explains changes in stock prices in the future. Each of these questions could be the subject of an interesting paper. Your original topic was overly broad; you should focus on a single, manageable question. Get started on your research even if you don’t have a precise topic; it will evolve along the way. The question you begin with may become less interesting, and something new may draw your attention. You may be persuaded by an argument you encounter or find data that pose a problem you hadn’t considered. You may find no data on one topic and a goldmine on another. Shaping your topic in this way is perfectly fine, but don’t get trapped in an endless maze of new, or just slightly revised, topics. You want your search to converge on a manageable topic in a reasonable amount of time. Find a question you can answer and begin your work.

FINDING AND USING SOURCES

All academic writing involves the use of source materials. Archaeologists look in the ground for artifacts, about which volumes of research may subsequently appear. Biologists look through microscopes and write up the laboratory experiments they perform. Historians study documents; sociologists interview subjects... Economic research typically begins with a (large) set of numerical data

• say, a list of per capita incomes for every country in the UN or the history of daily closing prices for shares of XYZ Corporation over the last year. In these long lists of numbers, economists look for patterns, or regularities, that reveal some underlying relationship between economic variables and help explain how some part of the economy works. A data set could include hundreds or thousands of entries; thus, statistical tools are used to summarize this information and ease your job of communicating with your audience. The mean of a large set of numbers conveys important information in a compact form. Knowing the standard deviation and other statistical measures can also be helpful when describing the population under investigation and presenting the results of your research. Economic sources come in two types. The first is empirical data: facts about the real world that come in, or can be easily converted into, numerical form (for example, prices, quantities, income levels). The second is academic literature: books or articles that you read in the library that can help you organize your ideas and make sense of the heaps of data you have accumulated. In general you will not have the time or resources to go into the field and compile your own data – administer questionnaires, study individual balance sheets, budgets, etc. Instead, you will rely on others to collect your data, including other economists as well as demographers, auditors and “official” statisticians. These data are compiled in a number of standard secondary sources, such as the Economic Report of the President and the Statistical Abstract of the United States. These volumes and others (see Appendix B) contain detailed information on public and private spending, wage and tax rates, and work force size and education levels, as well as other information grouped by states, industries and nations. Economists frequently begin their research with these sources; they will either point you to the proper primary source or contain the precise data you need for your paper. You will also want to look at academic journals and other scholarly literature on your topic. Using scholarly sources will allow you to invoke the authority of experts in the field to sanction your ana lysis or to establish the point of departure for your own original contribution. You need to become familiar with what others have thought and written so that you can communicate your findings in terms your audience will recognize. Perhaps you will apply a standard model found in the literature

to new evidence or compare two models and see which does a better job explaining the data you have found. These works will also point you to additional sources. Bibliographies, citations and footnotes may reveal a single, seminal forerunner. Read it. If you come across a “review” or “survey” article, you have hit the jackpot. It will contain an authoritatively complete summary of the literature in the field.

DOING A PERIODICAL SEARCH

Periodical literature was once indexed in cumbersome hardbound volumes. Nowadays, there are a number of very useful electronic indices available on-line and updated frequently. Most are publicly available on the internet, although some reside on the college’s proprietary system. Appendix C describes those sources that are used most frequently by economists. Depending on the service you’re using, your search can be very deep, including title, author and subject as well as abstracts, tables of contents and related topic fields. This makes electronic searching far more powerful than anything that could be done just a few years ago. Once you find a relevant article, look at the abstract. Check a few more items and retrieve from the shelves whatever looks interesting and useful.

TAKING AND ORGANIZING NOTES

The books, articles charts and tables strewn before you are the objects of your research, the evidence you will marshal to support your argument. Your first encounter with your sources should be carefully recorded: you should document your findings and give proper credit to the sources you use. First, take down the complete bibliographic record:

Author(s) or Editor (s) Title Journal Volume Number Date Pages

For the Goldin and Katz (1996) example used in chapter 1, your notes would look as follows:

Goldin, Claudia and Katz, Lawrence F. “Technology, Skill and the Wage Structure: Insights from the Past” American Economic Review , 86 (2) May 1996. pp. 252–257

Keep a file of notes on each article you read. This should include the main points of the article and any important results. Make sure to clearly set off direct quotations by using quotation marks. Avoid paraphrasing, because it will be difficult to separate the original wording from your own later on. You can add your own comments afterwards, but it is important to keep an accurate record of your first encounter with the source. Taking good notes will accomplish several things. First, you will have all your references at hand when you are writing the paper, so you won’t have to go searching for a quote or chart when you’re in your dorm room and the article you need is in the library. Second, you will leave a clear record for your readers to follow, so that they can go to the originals for more information or to see the facts for themselves. Finally, you will leave signposts for yourself so that you can know where you have been and separate your own ideas and results from those you found in your sources. This will help you avoid plagiarizing, which can happen inadvertently as your own ideas blur into what you have “learned” from others. The unacknowledged use of another writer’s words or ideas is plagiarism, whether intended or not. Poor note taking and sloppy documentation mechanics can lead to plagiarism, but such mistakes are easy to correct and avoid. Start taking notes right away. A word processor can make things easier, but even if you use pen and paper, try to develop good note-taking habits from the outset. Create a note file for each source you find. Group your notes by topic, alphabetically, chronologically or otherwise. As you organize them, add comments and summaries, pick out important themes and focus on issues for further research. These notes should help motivate your project by shaping the analytical model used and, through your summaries, form the beginnings of a good literature review.

Four | The Term Paper

You have chosen your topic, done your research, and settled on your ideas, and now you have to write the paper. If you have done your job properly up to now, you should have a topic, some data and plenty of notes on things you have read. Now your task is to decide how to focus your question and ideas, assemble the pieces into a structure that hangs together and present an argument others will find persuasive. Remember: writing is a process. Start with a few lines, perhaps just section headings, and then build up detail and flesh out your analysis. The key to the process is not to become too rigid too soon. While you want enough structure to get started, you also want to allow the overall shape of your paper to evolve somewhat along the way.

OUTLINING YOUR PAPER

The outline for your term paper is the agenda you set for the things you want to accomplish. A good term paper will ask an interesting question and offer a plausible answer. It should be plausible in that it is (probably) true, but also not obviously or patently true; and it should be supportable in that it is subject to factual observation or logical demonstration (Gordon Harvey, Harvard Writing Program). No matter what your field or topic, there is a fairly standard set of things you want to accomplish in the paper:

• Introduction: Pose an interesting question or problem
• Literature Review: Survey the literature on your topic
• Methods/Data: Formulate your hypothesis and describe your data
• Results: Present your results with the help of graphs and charts
• Discussion: Critique your method and/or discuss any policy implications
• Conclusions: Summarize what you have done; pose questions for further research