MAE102 – The Global Economy
Trimester 1 2015
Written Assignment
Due Date: Monday 11th May 2015
(See end of assignment for submission requirements)
2000 words maximum. 25 percent of total marks for unit
This assignment has 3 parts, A, B and C.
Part A: Economists
Economists perform a variety of roles in Australia and in other countries. These include policy analysis and advice to governments (at all levels including local) and international institutions, analysis and advice regarding economic conditions to both big and small business, forecasting, work in the finance sector, agriculture, trade,
taxation – the list is large!
For Part A, research the role of an economist in an institution/business/sector of your choosing. This means finding out about the economist’s role. You need to reference an actual position description for an economist. Provide the reference for where you found the position description. (Note that this does not need to refer to an actual vacancy; many organisations describe what economists who work for them might do, even if
they are not actively recruiting at the moment.)
Write a report of no more than 500 words that includes:
(a) A brief introduction to/information about the organization you have chosen: their
role and mission statement or similar.
(b) A description of the role you have chosen, including the (economics) skills required
for the role.
(c) One question you would like to ask an economist in that role, and a brief reason
why you are interested in the answer (you do not have to provide an answer). The question must be related to the organisation, not just, for example: “Do you like your job?”! For example for an economist at the Reserve Bank of Australia, you might want to ask what conditions would need to change in Australia before the
Board is likely to lift the cash interest rate, or something similar. Be creative!
Include a brief introduction (one or two sentences), then address the three points above separately.
Hint: many organisations advertise their graduate program on their websites, and list requirements/position descriptions for graduate economists.
Choose one of the following, or find another that interests you. There must be a
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macroeconomics element to your choice.
Suggestions: In Australia: The Commonwealth Government – various departments; the Australian Bureau of Statistics; the Australian Bureau of Agricultural and Resource Economics (ABARE); the Reserve Bank of Australia (RBA); the Productivity Commission; State Governments – various departments; The Australian Council of Social Services (ACOSS); NATSEM (The National Centre for Social and Economic Modeling); Major banks; financial intermediaries, big accounting firms, consulting firms such as McKinsey and credit rating agencies such as Standard and Poor’s.
Overseas: The European Central Bank (ECB); The Organization for Economic Cooperation and Development (OECD); The International Monetary Fund (IMF); The World Bank, United Nations Conference on Trade and Development (UNCTAD), the Asian Development Bank (ADB); The World Trade Organization (WTO).
No more than 500 words.
Total for Part A: 5 marks
Part B: Interest rates and monetary policy: data collection, presentation and
analysis
For Part B of the assignment you will investigate the role of the interest rate and
monetary policy in the macroeconomy. You will collect, present and analyse GDP
growth, investment growth, inflation rate, unemployment rate and interest rate
statistics for Australia, Greece, and the USA:
- Collect annual data for the real GDP growth rate, real gross fixed capital formation
growth rate, the unemployment rate and the consumer price index (CPI) for the three economies for the years 2001 to the most recent year available for any series from the World Bank database.
http://databank.worldbank.org/data/views/variableselection/selectvariables.aspx# . Define each variable. Present the data in a table and present a chart for each variable; that is four charts.
(3 marks)
- Collect the international official interest rate data for Australia, for Greece (note, Greece
is in the Euro zone) and the USA from
http://www.rba.gov.au/statistics/tables/index.html#interest-rates (Table F13). Calculate the annual average for each of the three series from the monthly data for the year from
July to June e.g. for the first year in your series, July 2000 to June 2001, and so on for the
later years. Add these data to the table for the other variables above. Present the interest rate variables in one chart.
(2 marks)
- Present a separate chart for each of the three countries for all variables, that is three
charts. What do you conclude about the relationship between the official interest rate and
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GDP growth in each country; between the interest rate and investment growth; the
interest rate and unemployment; and the interest rate and inflation? For instance are they
rising, falling, moving in opposite or same directions?
(4 marks)
Note: Please do not attach excel files with your assignment, as CloudDeakin will
not accept them. You need to use copy/paste functions to transfer your tables and graphs to the word document containing your assignment.
Total for Part B: 9 marks
Part C: Theory and policy
- Describe briefly the process by which the monetary authorities can seek to implement the
official interest rate.
(2 marks)
- Explain the expected relationships in theory between interest rates and the other variables
above, that is GDP growth, investment growth, unemployment and inflation, making use of diagrams.
testimony-to-parliament/6090624, describing the reasons for Australian monetary policy. Compare and contrast the approach to monetary policy for each economy. How
effective does monetary policy appear to be in each economy? Give reasons for your
answer.
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