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Unit 2

Professor: Christen Enos

Pedro Aristeguieta
Topic Memo Unit 2

For Unit 1 I wrote about the debate that the Fed American central bank is currently facing.
The Fed needs to decide whether interest rates in the US should be raised or not. There are many
prestigious economists in both sides of the debate: those who think that should be raise, and those who
oppose. But despite the different thoughts that economists have on the topic, all agree that the Feds
decision will definitely have economic consequences domestically and around the world; therefore the
decision needs to be taken very carefully.

Genre & Audience:

For Unit 3 I plan to create a proposal to the Fed board members. The proposal will provide the
Fed board members my thoughts on whether interest rates should be raised or not and why. Since the
proposal will be addressed to very well-educated economists, the paper will be supported with
academic work from other known and prestigious American economists. I will write the proposal as if I
were sending the Fed board members a letter through regular mail.

Rhetorical Situation & Thesis/Purpose:

Whether interest rates need to be raised or not has never been so discussed among economists
in the economic history of the US. Fed board members have not decided what to do and I expect,
through my proposal, to provide a serious recommendation on the steps they should follow. In previous

times it was easier for the Fed to take the decision regarding interest rates as international markets
were not interconnected as they are now and inflation was not at its current extremely low level. In
today's economy, the Fed board members need to be aware that if they raise rates too son, there will be
deflation in the economy. But on the other hand, if the interest rates are raised too late and a recession
hits the economy, which can happen anytime, the Fed will not be able to manipulate interest rates to
stop an eventual crisis. Since the Fed panorama is extremely complex, I will analyze both sides pros and
cons and then provide what I believe is the best at this moment for the Fed to do.

The Fed board members know well that whichever decision they take there will be positive and
negative consequences. I will focus on finding which has more positives and less negative consequences
and based on this I will make my recommendation and explain in detail why is it that they have to follow
my proposal. The Fed board members have not taken the decision as they have not totally understand
what they believe have more pros than cons.

Tentative Outline:
1) Introduction to the debate
2) Clarification of the importance of the topic & consequences of the decision (analyzing both
scenarios) domestically and abroad
3) Pros & cons of maintaining the status quo
4) Pros & cons of raising interest rates
5) Proposal on why they should raise or maintain interest rates

6) Incorporation of sources to support my proposal

7) Response to the other side's arguments and explanation of why they are less convincing than
the arguments of my recommendation
8) Conclusion

Current Sources:
In order to have a final strong and serious proposal, respected sources in the field need to be
incorporated to the paper. The first source I will use is a Peter N. Ireland essay (1), wrote in 2000, where
he examines in deep the relation between interest rates and the US inflation/deflation. I thinks Irelands
paper can be extremely helpful to the proposal as it analyzes the principles of interests and the
consequences of changing them. A second source will be an article from The Economist (2), a British
magazine highly respected in the economics field, where it analyzes the pros and cons of raising interest
rates and leaving them as they are now. This article is very informative since it has a neutral position on
the topic and analyzes both sides. And a last source I would like to incorporate is also from The
Economist (3), where it analyzes in detail the impact of an American interest rates hike in countries
around the world. This article can be beneficial to the proposal as it will provide a global perspective to

1) Interest Rates, Inflation, and Federal Reserve Policy Since 1980

Peter N. Ireland
Journal of Money, Credit and Banking
Vol. 32, No. 3, Part 1 (Aug., 2000) , pp. 417-434
Published by: Ohio State University Press
Stable URL: http://www.jstor.org/stable/2601173

2) The Feds Plan to Hike Interest Rates. The Economist. The Economist Newspaper, 31 Aug. 2015.
Web. 21 Sept. 2015.

3) "Why Some Emerging-market Leaders Say They Want the Fed to Hike." The Economist. The Economist
Newspaper, 01 Oct. 2015. Web. 14 Oct. 2015.

Questions or Concerns:
My only and biggest concern is that once I finish my paper and plan to do something productive
with it, the economic circumstances of the world can change and my paper can become obsolete.

Reflective Letter (At least 250)

I would like to thank Jianwei Su and Maulik Thakkar for the very helpful feedback provided for
assignment 2. Also, even though it was not particularly addressed to me, professor Enos feedback was
extremely helpful to improve not only my unit 2 assignment but also understand what is it that I really
want to achieve for my Unit 3 assignment.
Being that said the first and most important feedback I received from both: Jianwei and Maulik
was to change the structure of my memo. To be honest, I did not know what a memo was and Jianwei
and Maulik explained it to me and told me how the content needed to be below each of the headers,
instead of writing as an essay style, which is what I was doing. After that, I immediately changed the
entire structure of my unit 2. Another great recommendation that both of my classmates and the
professor gave me was the fact that I was not addressing the question: why doesnt my audience
already know this? For the final Unit 2 assignment I incorporated my thoughts on why my proposal
could be so important to them. After reading the professors feedback I also decided to delete a big

section I wrote about how writing this paper could benefit me. Even though I still consider that the type
of writing I chose can be extremely beneficial for me for several reasons; the assignment did not ask for
Doing this assignment was very interesting as I was constantly thinking how my Unit 3 will be
like. I am sure that because of this assignment, writing Unit 3 will be much easier and direct as we
already thought everything about the structure, the motives, the audience and the organization of our
next assignment.