Using Bloomberg as a Teaching Tool in Economics

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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

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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

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Typical Teaching Approaches

• chalk and talk method
• a good lecturer will capture students' attention
• a good lecturer will attract more students
• a good lecturer will keep students engaged
• publisher supplied power point presentation for
  the text
• forces the instructors to stay focused
• minimizes the possibility of going on a tangent
• Shallow
• boring to students
• boring to the instructor
• did I say boring?

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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.
•  

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Summary of the Lit. Review

• study author/s
• title
• technology used
• principal findings
• bottom line
• yes or no

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Table 1 Summary 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.
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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  
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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.
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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  
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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.    
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Table 1 continuedSummary 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  
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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 Barrons 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

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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.

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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

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Dow Industrials Response to QE1
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Dow Industrials Response to QE2
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Dow Industrials Response to Operation Twist
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Figure 1. Bloomberg Quote for Apple Computers
Inc. Source Bloomberg ProfessionalNovember 7,
2012
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Figure 3. Bloomberg Earnings Estimate for Apple
Computers Inc. Source Bloomberg
ProfessionalNovember 7, 2012
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Figure 4. Beta for Apple Computers Inc. Source
Bloomberg ProfessionalNovember 2, 2012
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Figure 5. Bloomberg Earnings Estimate V.S.
Price for Apple Computers Inc. Source
Bloomberg ProfessionalMay 26, 2012
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Figure 6. Bloomberg Bollinger Bands for Apple
Computers Inc. Source Bloomberg
ProfessionalNovember 7, 2012 
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Figure 7. Price Ratios for Apple Computers Inc.
 Source Bloomberg ProfessionalMay 26, 2012
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Figure 8. Price and Volume Movements for Apple
Computers Inc.Source Bloomberg
ProfessionalNovember 7, 2011- November 7, 2012
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Apples 20 decline since its September 19th
peak
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Figure 9. 10-Day Intraday Price for Apple Face
Book Phenomenon Source Bloomberg
ProfessionalMay 14 - May 25, 2012
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Figure 10. Trade/Quote Recap for Apple Computers
Inc. Source Bloomberg ProfessionalNovember 7,
2012
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Figure 11. Relative Value Comparison for Apple
Computers Inc. Source Bloomberg
ProfessionalNovember 7, 2012
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Using Bloomberg to Present Treasury Actives and
Derive Yield Curve

• Treasury Bills
• Treasury Notes
• Treasury Bond
• Treasury Inflation Protected Securities (TIPs)
• Derivation of Yield Curve

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Figure 12. Treasury Actives (PX1) Source
Bloomberg ProfessionalNovember 7, 2012
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Figure 13. US Yield Curve Source Bloomberg
Professional November 7, 2012
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Figure 14. International Yield Curve Source
Bloomberg ProfessionalNovember 7, 2012
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Bonds Pricing/Yield

• bid/ask price
• yield to maturity
• accrued interest
• reinvestment interest
• street convention
• duration
• convexity

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Figure 15. Treasury Actives Source Bloomberg
ProfessionalNovember 7, 2012
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Figure 16. Yield Analysis Source Bloomberg
Professional November 7, 2012
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Figure 17. Impact of News on Financial
MarketsNovember 7, 2012
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Figure 18. Taylor Rule Inflation/Unemployment
Gap Model
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Figure 19. Taylor Rule Stone McCarthy Model
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Figure 20.Taylor Rule Deutsche Bank Model
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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 ctrlc and ctrlv
• unwillingness to sub Bloomberg for the internet

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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