Using Bloomberg as a Teaching Tool in

Economics

Hossein S. Kazemi Associate Professor of Economics

Stonehill College

8th Annual Economics Teaching Conference

Orlando, Fl.

November 8, 2012

Motivation

Teaching Economics vs. science engaging students reinforcing the material more in depth understanding of the material better absorption of material better retaining of material improved assignments improved test results better real life understanding of economics better internships and jobs better skills at work increased number of majors happier administrators happier book publishers

Typical Teaching Approaches

chalk and talk methoda good lecturer will capture students' attentiona good lecturer will attract more studentsa good lecturer will keep students engaged

publisher supplied power point presentation for the text forces the instructors to stay focusedminimizes the possibility of going on a tangentShallow boring to studentsboring to the instructordid I say boring?

Review of the Literature

Out of 14 of the articles in this paper's literature review, 12 argue that use of technology helps.

the two that did not were based on the following that students’ performance in virtual courses was inferior to that of students

who took live or ‘hybrid’ classes where face-to-face lectures were integrated with a variety of online material.

A study of the effectiveness of web-based homework in teaching undergraduate business statistics" did not find any significant difference between the performance of students who had been assigned a variety of web-based homework and students who had been assigned traditional textbook-based homework.

 

Summary of the Lit. Review

study author/s

title

technology used

principal findings

bottom line

yes or no

Table 1Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology

Principal Finding(s) Does Technology Improve Learning

Notes

Murray (1999) Econometrics Lectures in a Computer Classroom

Computer Simulations: Monte Carlo methods

- Discusses the benefits of use of Monte Carlo in teaching Econometrics. Concludes that there are caveats but computer use is beneficial. 

Yes Some Caveats

Mark S. Walbert and Anthony L. Ostrosky(1997)

Using Mathcad to Teach Undergraduate Mathematical Economics

Computer software for Engineers: Mathcad

-Test scores 11% higher than scores earned by students who did not use Mathcad, an increase of more than one letter grade - Mathcad could also allow the instructor to cover topics or introduce techniques that were formerly considered too advanced. 

Yes The use of Mathcad in a one-semester undergraduate mathematical economics course.Students in both groups took identical tests and by controlling for study time, they were able to rule out the suggestion that increased time on tasks raised the test scores of the students in the Mathcad section.

Table 1 Continued…

Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology

Principal Finding(s) Does Technology Improve Learning

Notes

William E. Becker and Michael Watts(2001)

Teaching Economics at the Start of the 21st Century: Still Chalk-and-Talk

Chalk-and-Talk

-Economists use passive teaching techniques and this may be causing decrease in enrollment in economics courses.- Economists have not adopted active teaching. 

   

Saunders (1998)

Learning Theory and Instructional Objectives

  - New learning (with technology) is more efficient if linked to material students have previously learned.

Yes  

Salemi (2002)

An Illustrated case for active learning

  - A strong case for active learning techniques by outlining numerous benefits that stem from their inclusion in the classroom. He gives an example of active learning. Active learning is neither a panacea nor a free good. In their experience, it is a strategy through which students gain lasting understanding of important economic concepts. 

Yes  

Table 1 Continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology Principal Finding(s)

Does Technology Improve Learning

Notes

Hawker(1986)    Heid(1988)   Judson(1988) 

The effects of replacing some manual skills with computer algebra manipulations on student performance in business calculus Resequencing skills and concepts in applied calculus using the computer as a tool Effects of modified sequencing of skills and applications in introductory calculus

Computer Algebra Manipulations  Computer

Found evidence that students using computer algebra systems perform as well as or better than students in traditional business calculus courses. 

Yes  

Palmiter (1991)

Effects of computer algebra systems on concept and skill acquisition in calculus

Computer Algebra Systems

Empirical results indicated that students who used the computer algebra system scored higher on tests covering both their conceptual knowledge as well as their ability to do computations.

Yes - In a broader study, the performance of university students taught engineering calculus using a computer algebra system was compared to the performance of students using paper-and-pencil computations. Both groups received lecture as a primary means of instruction throughout the semester. However, after five weeks, the computer algebra system group also spent time engaged in active learning with computer-oriented labs.

Table 1 Continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology Principal Finding(s) Does Technology Improve Learning

Notes

Galbraith and Pemberton (2001)

Digging Beneath the Surface: When Manipulators, Mathematics, and Students Mix

Computer Software

- Found a strong correlation between confidence and motivation after integrating Maple into undergraduate mathematics courses in Australia.

Yes  

Boyd, D.W. (1998) On the use of symbolic computation in undergraduate microeconomics instruction

Computer Software

-Eight of the 10 questionnaires characterized the experience with Maple as helpful or positive. A number of students commented that Maple allowed them to focus more on economics and less on mathematics.

Yes  

Miles Cahill and George Kosicki (2000)

Exploring Economic Models Using Excel

Excel Software They don't have evidence for efficacy but suggest that their methods may lead to improvements.

   

Owen, A. (2007) Integrating Computer Applications Into Economics Electives

Computer Applications

Some evidence has been presented that suggests that students enjoy economics courses more when they are taught in this way and are more actively engaged in the material.

Yes  

Table 1 Continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology

Principal Finding(s) Does Technology Improve Learning

Notes

Paul G. King and Ross M. LaRoe (1991)

The Laboratory-Based Economics Curriculum

  The revised TUCE test results showed significant increases in

student understanding of macroeconomics in all sections.

Yes An analysis of variance test indicates that students in the lab sections learned more than students in the non-lab section. The F statistic shows a significant difference between the lab and non-lab sections at the recognition level, but not at the explicit level.

Kendrick, Mercado and Amman (2006)

Computational Economics: Help for the Underestimated Undergraduate

  Provide examples from a number of fields of economics and discuss how they can be used to develop opportunities for students to learn about and then modify these computational models.

   

Table 1 continued…Summary of Studies of the Efficacy of Technology in Teaching Economics

Study Title Technology

Principal Finding(s) Does Technology Improve Learning

Notes

Elliott (2003)    

Using a personal response system in economics teaching  

  - reported improvement in students’ performance and in their enjoyment of lectures after introducing a Personal Response System.

Yes  

Brown and Liedholm (2002)

Can web courses replace the classroom in principles of microeconomics?

Web Technology

found, however, that students’ performance in virtual courses was inferior to that of students who took live or ‘hybrid’ classes where face-to-face lectures were integrated with a variety of online material.

 

No  

Palocsay and Stevens (2008)

Computational Economics: Help for the Underestimated Undergraduate

Web Technology

A study of the effectiveness of web-based homework in teaching undergraduate business statistics" did not find any significant difference between the performance of students who had been assigned a variety of web-based homework and students who had been assigned traditional textbook-based homework. 

No  

Dufresne et al. (2002)    Lass et al. (2007)

Using a personal response system in economics teaching Teaching with technology to engage students and enhance learning

Web Technology

- The effect of web-based homework on test performance in large enrollment introductory physics courses found that online homework did lead to higher exam performance.

Yes  

Five Step Approach

Show students the tools in the discipline

Use Bloomberg to crunch the numbers and see how things work at the technical level

Use Bloomberg to show the interaction between economic news and financial markets

Have them follow up the lecture and Bloomberg presentation with CNBC, WSJ, the Barron’s and the Economist

Have them produce a report that highlights what they have learned and its connection with what they have seen and read in the media

Courses where Bloomberg used:

Bloomberg is used by the author in a series of Economics and Finance classes over the course of the past 15 years at four of the major Boston area colleges in business, economics and school of management. Courses such as Money & Banking, Macro Theory, Investments, Monetary Policy, International Finance, Impact of News on Financial Markets, Capital Markets and Investments, Investments & Portfolio Analysis, Money & Financial Markets, Fixed Income Analysis, and Portfolio Management.

Examples of How to Use Bloomberg

Effect of QE on Equity Markets

Equity Analysis

Treasury Securities

Yield Curve

Fixed Income Analysis

Market Indexes and Volatility

Fed Funds Rate and Taylor Rule

Dow Industrial’s Response to QE1

Dow Industrial’s Response to QE2

Dow Industrial’s Response to Operation Twist

Figure 1. Bloomberg Quote for Apple Computers Inc. Source: Bloomberg Professional

November 7, 2012

Figure 3. Bloomberg Earnings Estimate for Apple Computers Inc. Source: Bloomberg Professional

November 7, 2012

Figure 4. Beta for Apple Computers Inc. Source: Bloomberg Professional

November 2, 2012

Figure 5. Bloomberg Earnings Estimate V.S. Price for Apple Computers Inc.

Source: Bloomberg ProfessionalMay 26, 2012

Figure 6. Bloomberg Bollinger Bands for Apple Computers Inc. Source: Bloomberg Professional

November 7, 2012 

Figure 7. Price Ratios for Apple Computers Inc.  Source: Bloomberg Professional

May 26, 2012

Figure 8. Price and Volume Movements for Apple Computers Inc.Source: Bloomberg Professional

November 7, 2011- November 7, 2012

Apple’s 20% decline since it’s September 19th peak

Figure 9. 10-Day Intraday Price for Apple : Face Book Phenomenon Source: Bloomberg Professional

May 14 - May 25, 2012

Figure 10. Trade/Quote Recap for Apple Computers Inc. Source: Bloomberg Professional

November 7, 2012

Figure 11. Relative Value Comparison for Apple Computers Inc.

Source: Bloomberg ProfessionalNovember 7, 2012

Treasury Bills

Treasury Notes

Treasury Bond

Treasury Inflation Protected Securities (TIPs)

Derivation of Yield Curve

Using Bloomberg to Present Treasury Actives and Derive Yield Curve

Figure 12. Treasury Actives (PX1) Source: Bloomberg Professional

November 7, 2012

Figure 13. US Yield Curve Source: Bloomberg Professional

November 7, 2012

Figure 14. International Yield Curve Source: Bloomberg Professional

November 7, 2012

Bonds: Pricing/Yield

bid/ask price

yield to maturity

accrued interest

reinvestment interest

street convention

duration

convexity

Figure 15. Treasury Actives Source: Bloomberg Professional

November 7, 2012

Figure 16. Yield Analysis Source: Bloomberg Professional

November 7, 2012

Figure 17. Impact of News on Financial Markets

November 7, 2012

Figure 18. Taylor Rule: Inflation/Unemployment Gap Model

Figure 19. Taylor Rule: Stone & McCarthy Model

Figure 20.Taylor Rule: Deutsche Bank Model

Challenges

Administrators lack of support poor understanding of Bloomberg capabilities budgetary limitations

IT lack of timely response when help is needed slow bandwidth rare internet connection interruption

Students addiction to using ctrl+c and ctrl+v unwillingness to sub Bloomberg for the internet

Challenges continued...

Instructor teaching with a new technology is not easier time consuming requires revamping the entire course have to be ready to do chalk-and-talk if any glitches be prepared to hit the curve balls from technology

suppliers

Faculty Peers the biggest hurdle unwillingness to sign on unwillingness to learn new tricks unwillingness to have their students trained see it as too big of an investment