1) Does capital punishment reduce crime?
There is no black and white answer to this as it depends so much on the culture and the society where it is used. It clearly had an effect in older, smaller societies where the public could visualize the consequences of the crime that led to such punishment. People in these societies could more easily imagine themselves in the place of the condemned as a result of commiting a similar act.
In societies where the execution of punishment is removed from the public at large it's effect is largely diminished. A larger percentage of the population feels that it happens to others, but not to them. Hearing that someone has been executed though news sources just odes not have the same impact on the psyche that attending a public hanging does for example. IMO, as the execution and the process leading up to it are removed further and further from the public eye, the deterrent effect is lost.
I grew up in an era when the paddle was still used in the classroom. The teachers that used this most effcetively were the ones which brought the offender to the front of the class and paddled them right there. You could feel the pain of the offender as you listened to the crack of the paddle and watched their eyes wince. You really could think about that if you considered commiting the same offense. Of those which took the offender to the office and later returned with an offender that had the time to compose themself before returning, the effect was greatly diminished.
2) Is captital punishment moral?
I'll leave this question for a debate on the term moral first. It is tied so deeply to peoples personal beliefs as opposed to societal beliefs, so what is moral in one society is disgusting in another. People which believe in dieties have such a wide range of belief on this too such that it does not have a black and white answer either.