Assessment name: Executive summary Report

Length: 800-100 words and diagrams if necessary

CLOs 1 to 5

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

You will apply research and critical thinking skills to inform strategic approaches, solutions and options

Graduate Outcomes supported:

This assessment supports the following graduate outcomes.

1) Work ready

2) Global in outlook

3) Innovative

4) Life-long learner

Assessment Details:

Tasks- Part 1 – Executive Summary Report

“ANZ Research provides a wealth of economic, financial markets and commodity research.Regional economics teams provide macroeconomic analysis for our key geographies (Australia, New Zealand, Emerging Asia, Greater China and the G3 economies), while our strategists cover FX, Rates and Commodity markets.Together, our economists and strategists provide ANZ clients and staff with detailed economic analysis, forecasts, presentations and outlooks for our key regions, as well as timely, in-depth analysis and forecasts on financial markets.”

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

The overall task is to produce an assessment of likely changes in key economic variables for that market

Task 1 –

• form groups and update details on Canvas
• assign a group leader and group roles
• set up a collaboration document on google docs canvas and add your group members–
• Choose the ANZ market 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
• Interest rates
• Real GDP
• Consumer sentiment indices if available (Consumer expectation)
• Balance of payments (current account balance)
• Budget balance (Government debt)
• Net Debt
• Net government borrowing

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
• What can you determine from (real) interest rates on the return on domestic investment relative to foreign investment

Task 4

• The big mac index – is the markets currency considered under or over-valued according to PPP
• Consider the exchange rate and what is driving recent trends
• Trade in assets?
• Trade in goods and services?
• Role of the central bank?

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

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

Task 8

Draft and submit the executive summary

• The purpose of the report
• The methods used to conduct the research – eg literature reviewed – data accessed etc / course theory drawn on etc.
• The results of the research
• The conclusions drawn from the research
• Recommendations for future actions.