Skip to content

The Term Paper

Econ520 - Spring 2023 - Prof. Lutz Hendricks

The term paper picks a topic, critically reviews the literature, and clearly lays out arguments on both sides of the debate.

If there is a dominant view in the literature, the term paper explains this, but it does not take sides. The logic here is that an interesting topic will have some disagreement among experts. I don't expect you (the students) to resolve this disagreement.

See the notes on writing a term paper.

We will devote part of a class to questions such as:

  1. What makes a good topic?
  2. How to find literature? How to organize it?
  3. How to summarize opposing arguments so that the reader can understand how each argument is supported.


By Feb-7, students form teams of 3 students

  • I will help with matching students interested in similar topics.
  • Email me once you have formed a team or want to change its composition.
  • Students start to discuss the paper topic (see here for suggested topics).

By Feb-14, teams decide on topics.

  • Contact me if you want to choose a topic that is not on my topic list.

By Mar-9 (around the middle of the term) each team submits a draft of a draft that contains:

  • statement of topic
  • main arguments pro and con (and how they are supported)
  • main references from which these arguments are taken

By Mar-30 each team submits a draft paper.

By Apr-20 each team submits the final paper.

  • 5 points will be subtracted (out of 100) for each day that the paper is late

As you write / develop your argument, you should get in touch with me periodically to make sure everything is on track (and to clarify questions).

Please provide all files in pdf format (not MS Word). I do not need hardcopies.


The paper should

  • demonstrate understanding of the literature
  • lay out arguments on both sides of a debate, weaved into a coherent narrative (which is different from just listing arguments)
  • give the reader an idea about how the cited studies reached their conclusions
  • give an idea of magnitudes. Macro questions are often about quantifying tradeoffs. For example, it is obvious that more progressive taxes reduce inequality. But is this a big or small effect?

This is a substantial piece of work. I expect that the paper covers the literature in some depth.

I do not expect

  • innovation, modeling, theory, or original data work.
  • that you read academic journal articles (though you should try).
  • that you reach a conclusion. If the experts disagree, I don't expect you to figure it out.

There is no prescribed length. Obviously, you don't want to hand in 2 pages.

Examples of well-written term papers: Negative interest rates, Racial inequality. These were done during a semester when the students spent less time on their papers. I expect more depth than these.

Using AI Tools

At this point, AI tools, such as ChatGPT, cannot handle problems of the term paper's complexity. I therefore don't prohibit their use. However, beware that the answers they produce can be pretty far off. Two examples (created in January 2023) :

  1. Q: Why does the US run a trade deficit? A: Because it imports more than it exports. (That was deep.)
  2. Q: Why does the US import more than it exports? A: "There are a number of reasons why the United States imports more than it exports. For one, the country faces a number of economic challenges, including low economic growth and high Unemployment rates. This has led to a decline in exported goods and services, as businesses find it difficult to find customers in other countries. Additionally, the country’s trade deficit has widened in recent years, primarily due to a decrease in imports from abroad." (All of this is entirely wrong. The last sentence even gets the sign wrong.)
  3. Q: Why has the US personal saving rate declined over time? A: "There are several reasons for the fall in US personal savings rates. One reason is that, as the economy has deteriorated, people have less money to save. Another reason is that the availability of credit has tightened, making it harder for people to borrow money to save. Finally, there have been increases in the cost of living, which has made it more difficult for people to save." (Again entirely wrong. In one case, outrageously wrong. Making it harder to borrow increases the saving rate.)