Posted: June 30th, 2015

When given a major decision made by the Central bank, analyze its aggregate impact on the economy.

I. Introduction ……………………………………………………………………………………… 2
II. Learning Outcomes ……………………………………………………………………………. 2
III. Project Files ………………………………………………………………………………………. 2
IV. Project Summary (Scenario) ………………………………………………………………… 3
V. Deliverables & Project Management …………………………………………………….. 3
VI. Plagiarism…………………………………………………………………………………………. 5
VII. Marking Scheme ………………………………………………………………………………. 5
2 AUM Academic Projects Academic Year: 2014-2015
I. INTRODUCTION
Drafting a country’s report is at the heart of mainstream economics today. Therefore, it is important to familiarize students with handling and analysing economic problems by looking at real life data from international and reliable sources. This project will thus fulfil most of the learning outcomes the students are expected to acquire by the end of the semester.
II. LEARNING OUTCOMES
 Thoroughly understand important macroeconomic measures such as GDP, inflation, unemployment, an economic growth and their behavior in the business cycle.
 When given a major decision made by the Central bank, analyze its aggregate impact on the economy.
III. PROJECT FILES
1. A full description of the project is available on Moodle
2. This project is a group work. You will form groups of 3-to-5 students each.
3. Complete four out of four questions for full credit.
4. The assigned marks are shown in brackets by the questions.
5. For each question clearly indicate the source of your data. If you are providing a Table or a Figure, clearly state the data source within the caption.
6. Use the APA guidelines for general formatting. For free tutorials click the following link http://www.apastyle.org/learn/tutorials/basics-tutorial.aspx
7. A soft copy of each deliverable must be uploaded as a Turnitin assignment.
8. The project is to be submitted in a hard and soft copy (including Turnitin Report in word format. i.e Doc, Docx).
International data sources
http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/index.aspx
http://unstats.un.org/unsd/default.htm
http://databank.worldbank.org/data/home.aspx
http://www.nationmaster.com/index.php
https://www.cia.gov/library/publications/the-world-factbook/index.html
3 AUM Academic Projects Academic Year: 2014-2015
IV. PROJECT SUMMARY (SCENARIO)
You wish to open a new branch of your company in your assigned country. You want to investigate the economic stability of this new market. You start working on a country report which includes analysis of the following main economic indicators:
 Real GDP and real GDP per capita
 Unemployment
 Inflation
As you gather and analyse the data, certain economic patterns will start to appear. You will start answering the following questions:
 Is the country expensive to live in?
 Has the standard of living been lately improving in the country?
 Is the country open to international trade?
 Does the country benefit from good education and health systems? This should be reflected in the Human Development Index
Based on your analysis, you will now have a solid understanding of the current economic situation in the country.
V. DELIVERABLES & PROJECT MANAGEMENT
Deliverable 1 (due week 3): GDP, the price level, unemployment and the business cycle
The standard of living of the average citizen has tremendously increased during the past hundred years. But a closer look at the evolution of real GDP reveals that this indicator did not increase every year during this time. In this question, you will be asked to analyze the short-run fluctuations in real GDP, unemployment and inflation, better known as business cycles.
a) For the country ________, find data for real GDP, unemployment and the CPI (last twenty available years).
b) Using MS Excel, plot the time series for each variable.
c) After defining a recession and an expansion, identify historical recessions and expansions periods on the real GDP evolution plot and try to give a historical explanation
d) Compare the evolution of unemployment and inflation to the GDP one. Analyze using clear arguments.
4 AUM Academic Projects Academic Year: 2014-2015
Deliverable 2 (due week 4): Alternative measures of welfare
Despite some criticism, macroeconomists tend to use real GDP per capita more or less as a measure of the standard of living across countries. Critics argue that there are alternative measures across countries. This question looks at whether or not there is a strong correlation between real GDP per capita and these alternative measures of well-being.
a) For this question, choose two countries for each income category according to the World Bank classification (see link above). In particular, choose two high-income countries, two low-income countries, one lower-middle-income country and one upper-middle-income country. Make sure that your assigned country is enlisted in the appropriate category. For each of the six countries that you have selected, find the following data (latest):
1. Real GDP per capita
2. Adult literacy rate (total)
3. Life expectancy at birth (total)
4. Internet users (per 100 people)
b) Present your findings in a table. Make sure the first column is country name and sort countries by income category.
c) The United Nations has proposed its Human Development Index (HDI) as an alternative measure of the standard of living. Define and present this index (by mentioning how it is constructed).
d) Compare your assigned country to the country belonging to the same income category. In which measures does your assigned country compare poorly against the other country? In which measures does your assigned country fare better compared to the other country?
e) What can you say about the relationship between real GDP and these other measures of well-being? Is Real GDP a reasonable measure of standard of living? Why or why not?
Final submission (due week 5): Country report
The country report will include the following information:
 Population (most recent data)
 Unemployment rate (from D1)
 Nominal GDP and real GDP (From D1)
 GDP components: consumption, investment, government spending and net exports (for real GDP)
 Real GDP per capita (From D2)
 Standard of living: Average economic growth of real GDP per capita for the last five years (D1)
 Cost of living: Average consumer price index CPI for the last five years (D1)
 Trade partners (CIA World Factbook)
 Economic structure: agriculture, industry, services (% of GDP) (World Bank)
5 AUM Academic Projects Academic Year: 2014-2015
 Based on the information about GDP, unemployment and inflation, propose a suitable monetary policy that the Central bank can make in order to solve the possible economic problems facing the country.
VI. PLAGIARISM
Plagiarism will be punished to the full extent of AUM policy. Plagiarism cases include but are not limited to (www.plagiarism.org):
 Turning in someone else’s work as your own
 Copying words or ideas from someone else without giving credit
 Changing words but copying the sentence structure of a source without giving credit
 Copying tables, figures and media (especially images) from other websites to paste them into your own project without the proper citation.
VII. MARKING SCHEME Group Project Due date 31%
Project Deliverable 1
4.00%
Week 3
Project Deliverable 2
4.00%
Week 4
Project Final
15.00%
Week 5
Group Presentation
4.00%
Week 6
Individual Discussion
4.00%
Week 6
6 AUM Academic Projects Academic Year: 2014-2015
Overview of the marking scheme for the Project
Bare pass mark (60%)
The group has submitted an incomplete work that reflects very poor performance. The work represents lack of evidence of a good understanding of the material covered.
Pass mark
The group submitted a work of limited quality. The work shows some evidence of familiarity with economic analysis and the subject matter. Limited critical skills are established.
C classification
The group has submitted a work of satisfactory quality. The work respects the guidelines of the project without providing a very good understanding of concepts and good analytical skills.
B classification
The group has submitted a work of good quality. It is acceptable evidence of critical capacity, analytical ability and capacity to understand and analyse macroeconomic data. The group has shown a fair grasp of the subject.
A classification
The group has submitted a work of excellent quality. It is outstanding evidence of original thinking, good organization, capacity to understand and analyse macroeconomic data. The group has shown an excellent grasp of the subject.
7 AUM Academic Projects Academic Year: 2014-2015
Marking scheme of a deliverable
Deliverable 1 Data collection Available marks Result Comments
Data collection from a renowned international institution with evidence
20
/20
Understanding concepts Result
Does the group understand the dynamics of the business cycle?
40
/ 40
Graphical presentation Result
Does the group have a solid grasp of the cyclical relationship between GDP, inflation and unemployment?
40
/ 40
Deliverable 2 Data collection Available marks Result Comments
Data collection from a renowned international institution with evidence
20
/20
Understanding concepts Result
Does GDP measure welfare? A cross-country comparison and analysis
40
/ 40
Graphical presentation Result
The relationship between GDP per capita and other measures of welfare: graphical analysis and interpretation
40
/ 40
8 AUM Academic Projects Academic Year: 2014-2015
Final Submission Use of previous results Available marks Result Comments
Is the country profile based on the analysis done in the deliverables? Does the project summarize the economic situation in the country?
40
/40
Understanding concepts Result
Is the country profile linked to a solid economic background that students have earned in class?
40
/ 40
Writing style and presentation Result
Quality and style of the report
20
/ 20