Choose one country to investigate. Then find annual data for three major macroeconomic variables (inflation, unemployment, growth) for your chosen country, for a period of 10 years.

Macroeconomics Project Guidelines

Choose one country to investigate. Then find annual data for three major macroeconomic variables (inflation, unemployment, growth) for your chosen country, for a period of 10 years. (Hint: IMF, World Bank, and National Statistical Agencies are good sources). You have to present your statistics by using excel graphs, and you should MAKE your own graphs, you will not get any points for graphs copied and pasted from internet.

Define the three macroeconomic variables (inflation, unemployment, growth) and comment on their trends according to your graph.

On the same graph, add data of World/or Regional averages for each of the three variables

Then, built on the aforementioned data, you need to come up with some recommendations for the monetary policy and/or the fiscal policy, showing the impact of your recommendations on the three macroeconomic variables.

There is not one correct answer, but you need to be able to justify your chosen policies in an understandable manner, with the use of economic theory (liquidity preference framework and the aggregate demand-aggregate supply analysis).

Here are some hints:

1- Comparing the variables of your country to the world/or regional averages will help you to understand whether the inflation or unemployment is too high, or growth is too low in your country.

2- Make sure that your recommendations are consistent! It does not make much sense if you recommend two policies working in two different directions.

3- Not doing anything is also an option. As we will learn later, it is called “non-activist approach”. However, you need to convince me that this is a viable option.

4- While making a recommendation for the monetary policy, try to remember the effects of money on nominal and real variables in the short-run and in the long-run. Also make sure that you find out whether your country uses open market operations, discount loans or reserve requirements as a monetary policy tool.

5- While making a recommendation for the fiscal policy, try to remember the short-run and long-run effects of government spending and taxes. You might also want to check whether your country has a budget deficit or surplus, as it does not make much sense to advise a country with a huge deficit to increase spending.

6- All sources have to be clearly documented (data and information)

7- The assignment will be submitted on the blackboard via safe assign