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IDEC8022 Economic Development

tag 0 Download 7 Pages / 1,685 Words tag 01-02-2021

Questions:

“ARA is the Research department of a large Australian bank which provides a wealth of economic, financial markets and commodity research. Regional economic teams provide macroeconomic analysis for the banks key geographies (Singapore, Australia, New Zealand, Emerging Asia, China, Japan, European Union economies, South Africa), while strategists cover FX, Interest Rates and Commodity markets.Together, economists and strategists provide ARA clients and staff with detailed economic analysis, forecasts, presentations and outlooks for their key regions, as well as timely, in-depth analysis and forecasts on international financial markets.”

Imagine you are working for "ARA" research and you have been asked to provide some current research on a particular market of your choice within their key geographies.

The audience for the research and the executive summary  is the manager of the regional division you have chosen to study. 

The overall task is to produce an assessment of likely changes in key economic variables for that market and the implications of those changes on broader macroeconomic conditions.

The following tasks provide some guidelines to support your research and to assign task across topics. Each group member should be involved in contributing (solely or jointly with a team member) to a weekly task. 

suggested tasks are:-

Task 1

  • form groups in class and update details on Canvas
  • assign group roles / tasks 
  • set up a google docs within the group space on canvas
  • Choose the country you would like to research
  • Provide a brief country specific market history. Have there being any significant social, cultural or political events in the last year that might influence international transactions / engagement with trading partners or buying or selling of assets across borders.

Task 2

  • Begin to identify data sources and collate information on the following variables such as:-
  • Consumer price index  / inflation rates
  • Interest rates
  • Interest rates of trading partners
  • Real GDP
  • Consumer sentiment indices if available (Consumer expectations)
  • Balance of payments (current account balance)
  • Net Debt
  • International investment position

Task 3

Applying the data collated in the previous week assess:-

  • Is the country a net borrower or a net saver?
  • What does this imply about trading consumption across time
  • Can you deduce anything about preferences for current / future consumption
  • What can you determine from (real) interest rates on the return on domestic investment relative to foreign investment
  • Have there been any changes in trading patterns recently

Task 4

  • Consider the exchange rate and what is driving recent trends
  • The big mac index – is the markets currency considered under or over-valued according to PPP
  • Is supply or demand for the currency driven by trade in assets?
  • or trade in goods and services?
  • What is the role of the central bank? Is the exchange rate managed 
  • Are there controls on capital flows
  • If the exchange rate is flexible how volatile have fluctuations being  - could volatility be explained by any of the theories of exchange rate determination
  • Is there any data relating to level of pass though for the country

Task 5

  • Is the trade balance sensitive to changes in foreign prices for imports and exports
  • Estimate which quadrant of the SWAN diagram your country of choice may be operating in?
  • What might that predict about the role for policymakers
  • what drives the RER - is it changes in the price of Non tradeables or the nominal exchange rate

Task 6

Assess possible events that might affect these markets. Use the IS LM BP model to frame your analysis:-What if:

  • There was either expansionary fiscal or monetary policy
  • What if relative interest rate rise (fall)
  • What if social and political concerns impact trade

Task 7

  • How open is the economy
  • How exposed is the market to external shocks
  • How exposed is the economy to internal shocks
  • Specify the exchange rate regime and analyse the risks inherent in that exchange rate regime
  • what type of policy interventions are likely given the country context - Monetary? / Fiscal? 
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My Assignment Help (2021) Economic Development [Online]. Available from: https://myassignmenthelp.com/free-samples/idec8022-economic-development/chinas-economic-performance.html
[Accessed 07 December 2022].

My Assignment Help. 'Economic Development' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/idec8022-economic-development/chinas-economic-performance.html> accessed 07 December 2022.

My Assignment Help. Economic Development [Internet]. My Assignment Help. 2021 [cited 07 December 2022]. Available from: https://myassignmenthelp.com/free-samples/idec8022-economic-development/chinas-economic-performance.html.


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