Reference no: EM131048159 , Length: 8

ASSIGNMENT: INDEPENDENT STRUCTURED RESEARCH REPORT

Collect annual data for each year from 2000 to 2014 for five countries, Australia, USA, China, Spain and Greece at https://data.worldbank.org/indicator. Under "all indicators" find and download data for the following macroeconomic variables.

a. GDP per capita (constant 2011 US$)

b. GDP growth (annual %)

c. Inflation, consumer prices (annual %)

d. unemployment, total (percentage of total labour force)

e. [government] expense (% of GDP)

f. [government] revenue (% of GDP)

TASK 1: Data Collection and Analysis

1. Present GDP per capita in each country on one chart. Compare and comment on the differences between each country and over time. Discuss possible reasons for those differences.

2. Present the variables GDP growth rate, unemployment rate and inflation rate each in a single chart. For instance present GDP growth rate for the five countries in one chart. Similarly provide a chart for each of GDP (explain why you may need to show China's GDP in a separate chart), the unemployment rate and the inflation rate (Zimbabwe separately, why?). Based on the charts you have prepared, compare and explain the effect of the GFC on the five countries.

3. Now prepare a chart for each country which shows its GDP, government expenditure and taxes. (If you have found government expenditure and tax as a share of GDP you will need to calculate the figures.) Compare the government's share of the economy of each country. Compare the government budgetary position of each country (balanced budget, deficit or surplus) over the period (hint: Chapter 27 of the textbook). Discuss, how and why, these changes with the GFC.

TASK 2: Economic Policy Analysis (Domestic and Global)

1. Collect and present data from 2000 to 2014 for official cash rate of Australia and key interest rates for EURO area in an appropriate diagram. The key interest rates for the euro area set by the Governing Council are:

-The interest rate on the main refinancing operations (MROs), which normally provide the bulk of liquidity to the banking system. The Eurosystem may execute its tenders in the form of fixed rate or variable rate tenders.

-The rate on the deposit facility, which banks may use to make overnight deposits with the Eurosystem.

-The rate on the marginal lending facility, which offers overnight credit to banks from the Eurosystem.

Official cash rates represent the cost of overnight loans between financial intermediaries within Australia and reflect nation's stance on monetary policy while key interest rates, as specified above, reflect the European Union's stand on the regional monetary policy responding to global issues.

2. Explain why the central banks of Australia and the European Union are currently employing such monetary policy actions? In your discussion, identify at least two current economy-wide issues that have justified their actions.
(You may find it useful to read the recent monetary policy statements and reports of the RBA and ECB at www.rba.gov.au and www.ecb.europa.eu respectively.)

Data sources:

Suggested data sources for part (a):

The Reserve Bank of Australia: https://www.rba.gov.au/Statistics/AlphaListing/index.html

European Central Bank: www.ecb.europa.eu

The Australian Bureau of Statistics: https://www.abs.gov.au/

Department of Foreign Affairs and Trade, (DFAT), Country Fact Sheet, available online at www.dfat.gov.au

World Development Indicators: a data base that covers all countries and is available through the learning commons resources.

World Bank https://data.worldbank.org/ and https://www.worldbank.org

Australian Treasury https://www.treasury.gov.au.