1. Analyse the concept of a nation’s balance of payments to examine the economic importance of changes in a nation’s net foreign wealth position.
2. Synthesize and evaluate theories of exchange rate determination.
3. Assess the policy options available in an open macroeconomic environment.
4. Evaluate the extent to which macroeconomic policy effectiveness is affected by macroeconomic openness.
5. Assess the implications of a government’s choice between a fixed and a floating exchange rate regime.
6. Analyse the causes and effects of currency crises.

Final Assessment

The final assessment is applied in nature and encourages you to use the tools developed in the course content to analyse and make sense of the world around you. In recent months economies around the world have experienced unprecedented shocks to their internal and external balance situations driven by necessary closures and shuts downs of economic activity to deal with the health crisis.

Your final assessment task for IME is to apply the theory developed in the course to the current world events from the Australian perspective.

Essay / Report : either format is accepted as long as it is consistent – Harvard referencing to be used.

Title:

An assessment of the economic impact of COVID 19 on the Australian economy – an International Macroeconomic perspective.

Required – Essay or report (Links to an external site.) format with diagrams/ Graphs to support arguments and assessments of current and likely future economic outcomes and adjustment processes.

Word count 3,000- 4000 words (Max 5000) Apply knowledge developed from each course topic in your scenario analysis – for example the final piece of work may follow a structure such as: –

• Introduction
• Likely implications for the balance of payments and net foreign wealth
• The intertemporal model of the current account- the CA balance: likely changes and implications for future consumption
• Exchange rate determination in the short run and the long run – What can theory tell us about current and likely future changes in the value of AUD
• Elasticities and absorption approach to the current account – how might changes to the exchange rate flow through to the domestic economy. What about Y-A = X-M?
• The RER and internal and external balance- automatic mechanisms of adjustment- Where is Australian currently on the SWAN diagram – possible policy interventions? (noting you can make assumptions about relative elasticities of the IB / EB schedules)
• Macroeconomic policy options in light of COVID19 – likely outcomes / limitations-use the IS-LM-BP to illustrate
• Choice of exchange rate regime – would Australia be in a better position if it had a fixed exchange rate?
• Conclusion / discussion

Learn about assessment task skills here (Links to an external site.)

Learn how to write an essay here (Links to an external site.)

Learn general writing skills here (Links to an external site.)

If you need individual support, go to the online Study Support Hub via Ask The Library (Links to an external site.)

Current website Reports about COVID-19

Reserve Bank of Australia, 2020, Financial Stability Review,https://www.rba.gov.au/publications/fsr/2020/apr/ (Links to an external site.)

Reserve Bank of Australia, 2020, Supporting the economy and financial system in response to COVID-19, https://www.rba.gov.au/covid-19/ (Links to an external site.)>.

Cadamuro, L and Papadia F, 2020, Three macroeconomic issues and Covid-19,https://www.bruegel.org/2020/03/three-macroeconomic-issues-and-covid-19/ (Links to an external site.)

McKibbin, W & Fernando, R, 2020, The global macroeconomic impacts of COVID-19: Seven scenarios, Brookings, https://www.brookings.edu/research/the-global-macroeconomic-impacts-of-covid-19-seven-scenarios/ (Links to an external site.)>.

PWC, 2020, The possible economic consequences of a novel coronavirus (COVID-19) pandemichttps://www.pwc.com.au/publications/australia-matters/economic-consequences-coronavirus-COVID-19-pandemic.pdf (Links to an external site.)>.

Deloitte, 2020, Whatever it takes COVID-19 policy responses in Australia,

https://www2.deloitte.com/content/dam/Deloitte/au/Documents/covid-19/deloitte-au-covid-19-dae-policy-responses.pdf (Links to an external site.)>.

Writing Skills

Forsyth, P & Connelly, J 2012, Essay writing skills essential techniques to gain top marks,https://primo-direct-apac.hosted.exlibrisgroup.com/permalink/f/1d27kpc/RMIT_ALMA51159704190001341 (Links to an external site.)>.

Bailey, S 2015, The essentials of academic writing for international students, https://primo-direct-apac.hosted.exlibrisgroup.com/permalink/f/o3fpsu/RMIT_ALMA51233176450001341 (Links to an external site.)>.