Reference no: EM132322349
Economics Assignment - Macroeconomic
THE ASSIGNMENT - The assignment focuses on aspects of the macroeconomic concepts, principles, relations and issues. The assignment is designed in a way that would be useful to assess the ability of a student to find, process and use publicly-available information and statistical data to calculate some macroeconomic variables of a designated country and explain them in a meaningful way.
1. Sources of Data
The student is required to consult national or international statistical publications, including (but not necessarily limited to) the IMF's International Financial Statistics Yearbook; or the website for World Economic Outlook where you can obtain country- specific data online for a wide range of series going back to the 1980s. Another source of data is the Asian Development Bank's Key Indicators of Developing Asian and Pacific Countries, or Key Indicators for Asia and the Pacific. Additional information on any country-specific data are available on the designated country's central-bank websites. Also, for detailed analysis of a country's macroeconomic reviews, the student can consult various reports available in the country-specific webpage on the IMF website. The Reserve Bank of Australia is the central bank of Australia. Its website has data and detailed discussion on all aspects of Australia's economy in a historical context.
HOW TO CHOOSE YOUR COUNTRY FOR THIS ASSIGNMENT?
Select any country whose name has the same first letter as your first name or your surname. Do not select your country of origin. That is, if you are say from India, do not select India. However, you can choose Indonesia if the first letter of your first name or last name is say Indrogit or Indira. Similarly, if your first name is Alison or Albert, you can pick Australia, Austria or Afghanistan, Argentina and so on. If a student has difficulty in finding a country for whatever reason, please contact the course coordinator to select a country that is acceptable to you. Note - Use your own data and select my name (Charanpreet) first letter for country selection.
2. Study Period
The student is required to use one or more of the above listed publications, or his/her research skills to find other relevant, reliable sources of data. Once the data sources are identified, then the student is required to compile annual data on key macroeconomic variables, say listed in Question 3 below for the selected country over a period of about 15-year study period, 2004-2018 inclusive (referred to hereafter as "the study period", or "the sample period"). If data for this period are unavailable, then select the latest continuous 15-year period for which all required data are available. Please note that data collection is an important part of learning economics of undertaking research on any issue in economics, especially macroeconomics.
3. Data Collection and Display
Collect and display in an orderly way the following annual data for the study period. Attach your compiled data as a Data Appendix.
3a. Nominal GDP for your chosen country, GDPYC (e.g., GDPARG if your name begins with, "A". "ARG". Nominal GDP is expressed as, "GDP at current prices".
3b. Real GDPYC (i.e. GDP at constant prices). If unavailable directly from various data sources, then calculate real GDP as nominal GDP divided by the GDP deflator with base 1.0.
3c. The unemployment rate, percent.
3d. Consumer Price Index (CPI YC) and/or GDP Deflator YC. All must have a common base year of 100 (or 1.0).
3e. Narrow moneyYC (currency plus demand deposits) (M1), in domestic currency.
3f. Broad moneyYC (narrow money plus time deposits or quasi-money) (M2), in domestic currency.
3g. Exports, in domestic currency.
3h. Imports, in domestic currency.
3i. Trade balance, in domestic currency.
3j. The deposit rate of interest, percent.
3k. The loan rate of interest, percent.
4. Data Processing, Analysis and Conclusions -
Using your collected data, prepare the following calculations and graphs and draw conclusions in the form of appropriate responses to the questions posed.
4a. Calculate the percentage growth rate of real GDP for the sample period and plot it. Briefly discuss the key factors that might have contributed to economic growth in your chosen country over the study period. Comment on whether economic growth in this country exhibited high or low volatility and its possible reasons.
4b. Calculate the percentage rate of inflation based on the CPI YC or the GDP deflator YC. Plot it for the study period. Comment on whether inflation in this country exhibited high or low volatility and its possible reasons.
4c. Calculate the narrow or broad money growth rateYC in percentage terms. Plot it for the study period.
4d. Plot inflationYC against either narrow or broad money growthYC, displaying money growth on the horizontal axis and inflation on the vertical axis. How well does your plot support the positive theoretical relationship between money growth and inflation?
4e. Plot inflationYC against the unemployment rate. Use economic theory to interpret any relationship between them.
4f. Calculate the real deposit rate of interest as the nominal interest minus the rate of inflation. Plot it and describe any trends in the plot and fluctuations.
4g. Calculate the real loan rate of interest as the nominal interest minus the rate of inflation. Plot it and describe any trends in the plot and fluctuations.
4h. Calculate the export earnings as a percent of GDP and plot it.
4i. Calculate the import payments as a percent of GDP and plot it.
4j. Express trade balance as a percent of GDP.
5. Comment on macroeconomic performance of your chosen country
Write a short note on the overall macroeconomic performance of your chosen country. You can comment on the country's monetary policy, fiscal policy, exchange rate policy and trade policy. Also, you can comment on any major external shocks that your chosen country was exposed to and discuss the major consequences of those shocks.
Word Limit: 1000-1500 words (approximately), excluding figures, tables and references.
Attachment:- Assignment File.rar