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Length

: Executive summary (1400-1500 words) and appendix. (Note: the appendix is not included in the word count -this should show the comprehensive research completed relevant to the various course topics and tasks)

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 1/6

Assessment 2A (2): Final Executive summary report and appendices –

Group Assessment here

Due 16 May by 23:59 Points 15 Submitting a file upload Available 1 Mar at 0:00 – 30 Jun at 23:59 4 months

Start Assignment

IMPORTANT:

You only need to submit one Assessment for your whole group. 

Turnitin similarity index will be checked for specific similarity eg other submissions, segments of texts from others sources. The summary report should be drafted in your own words. 

_____________________________________________________________

Unit code and name: ECON1082 International Monetary Economics

Assessment name: Assessment 2A (2):  Executive Summary Report 

Weight: 15%  

Assignment due date : May 16 – Final Executive Summary and Appendices 

Length:  Executive summary (1400-1500 words) and appendix. (Note: the appendix is not included in the word count – this should show the comprehensive research completed relevant to the various course topics and tasks) 

Submission: In addition to the final report students need to submit the following information as an appendix. 

-The topic specific research (as per tasks below) – this will include the research submitted for review in step one which should incorporate any feedback received in step one.   RMIT Cover Sheet  – signed by all members 

PLEASE NOTE THAT WHEN CHOOSING A COUNTRY YOU CAN CHOOSE ANY COUNTRY BUT AUSTRALIA

Feedback mode: via Canvas

Learning Objectives Assessed:

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

?

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 2/6

Assessment Details: 

Executive Summary Report

“The King Centre of International Economics  (KCIE)is an economic consultancy that provides independent, quantitative, evidence- based advice to support practical decision-making. Our work is about applying the tools and techniques of economic analysis to help solve problems for our government, private, non-government, and international clients. We work across all sectors and have built a reputation for analysing difficult and complex economic issues, and producing well researched, comprehensive and credible economic assessments. We are proud to make available a wide range of our reports, which are published on our website and available upon request. We have worked in both developed and  developing countries in Asia, Africa,  Europe, Latin  and Northern America and the Pacific, advising on economic policy and institutional development across a diverse range of subjects”. 

Our international  work varies however recent work has included the impact of the government and central bank policies to support the macroeconomy during the pandemic crisis. The analysis we provide   focuses on assessment of the  clients domestic market and their interaction and exposure to  international  markets and key trading partners.  Assessment of expectations regarding relative interest rates, the value of the domestic currency, commodity markets and expected policy directions are also provided

Task: You are graduate employee at  “KCIE” research and you have been allocated to a team asked to provide some current research on a client market  in a country of your choice.  (This can be any major economy in the world for which you can access information for key economy variables) .The audience for the research and the executive summary is the manager of the regional “country” division you have chosen to study, and will be passed on to the client (large company considering expanding operations in your country of choice)  once reviewed by your manager. 

The task is to apply the  economic models covered in class to help the client understand the current economy in the country of choice and the likely implications of changing trade patterns, policy developments and political sentiment towards  globalisation.  Your team are expected to conceptually model  likely changes in key economic variables  with a specific focus on international flows in trade and capital and the mechanisms that drive these flows. You may also choose to explore the development of the digital economy in these countries and explore how the rate of growth of decentralised ledger technologies might impact trade flows across sectors.  As a group you will  be expected to apply the tools developed in the course content to  develop an assessment  the current situation and likely development of your economies macroeconomy.  Your assessment of the international  macroeconomic conditions of your market will support the client by ;-

Helping clients to:

Be better equipped to make the right strategic business decisions Plan more effectively when entering new markets Understand the bigger picture when making investment appraisals Be better prepared for policy or regulatory change Influence policy-makers, officials, regulators, customers or the public with greater authority

You are required to develop a research strategy supported by the set of tasks listed below.

Drawing on that research you are then required to draft an Executive summary report (1400-1500 words) highlighting the key points of your findings and  providing an assessment of expectations regarding relative interest rates, the value of the domestic currency, commodity markets, the digital economy and expected policy directions. 

For example, Why can theory  tell us about recent changes in exchange rates ?, what is the role of monetary and fiscal policy ?and implications for internal and external balance, domestic saving and consumption practices and what this means for the balance of payments? etc… 

The following tasks provide some guidelines to support your research . 

suggested tasks are:-

Task 1 

Form groups (max 5 – minimum 2) in your tutorial class and update details on Canvas.  Identify groups interests and capabilities  Set up a shared group within microsoft teams Choose the country / region you would like to research Consider recent events and complete an initial library desktop review  (Literature search) on the specific region and country 

Task 2

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 3/6

Begin to identify data sources (most recent available – refer to national statistics websites)  and collate information on trends in  the following variables  referred to in the course materials some examples may be :-  Unemployment rate CoVid 19 data Inflation rates Interest rates Interest rates of trading partners Real GDP growth  Balance of payments (current account balance) Net Debt – as per International investment position

Task 3

Applying and contextualising the data collated in the previous week assess:-

Provide an assessment of the countries current account balance? What does this imply about trading consumption across time. what is the economic significance of the Current account balance  and how does that relate to the International Investment position Can you deduce anything about preferences for current / future consumption What can you determine from (real) interest rates on the return on domestic investment relative to foreign investment. Does capital flow in the direction predicted by the intertemporal model of the current account? Why/ why not? Have there been any changes in trading patterns recently Have there been any significant change in the digital economy – Has the central bank made reference to use of digital currencies ?

Task 4

Consider the exchange rate: is it a flexible or managed exchange rate mechanism? and what are driving recent trends in exchange rates ? The big mac index – is the markets currency considered under or over-valued according to PPP Does the economy have a well developed financial market – is there a high degree of capital mobility across borders? Trade in goods and services (how dependent is the economy on international trade in goods and services)? What is the role of the central bank in inlfuencing exchange rates (direct or indirect) Are there controls on capital flows in and out of the country – Could this be impacted by the use of Cryptocurrencies ? If the exchange rate is flexible how volatile have fluctuations being  – could volatility be explained by any of the theories of exchange rate determination

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 What drives the RER – is it changes in the price of Non tradeables or the nominal exchange rate What does the RER suggest about the countiries competitiveness

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 exposed is the market to external shocks (e.g trade flows / NX) How exposed is the economy to internal shocks (eg. fluctuations in demand for money / regional shocks ) Specify the exchange rate regime and analyse the risks inherent in that exchange rate regime What type of policy interventions are likely given the country context – Monetary? / Fiscal? 

Task 8

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 4/6

Assessment 2A 2020: Executive Summary Report (1) (1)

Draft and submit the executive summary drawing on the groups research – keep in mind writing style  (https://emedia.rmit.edu.au/learninglab/content/writing-skills)

Some tips on report writing   (https://emedia.rmit.edu.au/learninglab/content/writing-report-0)

As the assessment is the executive summary  (https://emedia.rmit.edu.au/learninglab/content/report-sample-executive-summary- description) keep it succinct but informative. The group will need to collaborate on the key messages from their research in the “appendix” that would add value to the manager of your section. For example

The purpose of the report – define the report objective (e.g identify recent changes in key variables and apply theory to understand expected future changes )  The results of the research – key findings – refer to appendix to provide supporting information / analysis The conclusions drawn from the research – identification of key risks etc.  Recommendations for clients operating in that markets – likely macroeconomic trends etc .. 

RMIT Electronic Submission of work for assessment

I declare that in submitting all work for this assessment I have read, understood and agree to the content and expectations of the Assessment declaration (https://www.rmit.edu.au/students/student-essentials/assessment-and-exams/assessment/assessment- declaration)https://emedia.rmit.edu.au/learninglab/content/writing-skillshttps://emedia.rmit.edu.au/learninglab/content/writing-report-0https://emedia.rmit.edu.au/learninglab/content/report-sample-executive-summary-descriptionhttps://www.rmit.edu.au/students/student-essentials/assessment-and-exams/assessment/assessment-declaration

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 5/6

Criteria Ratings Pts

8 pts

5 pts

Application of course Theory Demonstrated application of course specific economic theories and concepts to contemporary issues in a given market, as well as formulation and analysis of policy Assigned tasks have contributed to deeper thinking and critical assessment of current international economic contexts and trade flows

8 to >6.4 Pts Exemplary

Conveys strong evidence of understanding of course theory and its implications. Demonstrates significant awareness of connections in the course topics through inferences made, examples, well developed insights, and substantial critical analysis. Synthesizes current experience into future implications and recommendations to minimize macroeconomic risks

6.4 to >5.6 Pts D

Conveys evidence of engagement and understanding of course theory. Cohesive narrative. Good synopsis of current economic situation of the given market, possible implications and future risks and (policy) recommendations that may be likely or relevant

5.6 to >4.8 Pts C

Conveys limited evidence of engagement and understanding of course materials. Minimal thought of the implications of current experience.

4.8 to >4.0 Pts P

Inconsistent analysis – contradictions in assessment of the country specific data evident. There is limited evidence of engagement and understanding of course materials – no consolidated narrative presented. Minimal thought of the implications of current experience.

4 to >0 Pts Unsatisfactory

Conveys inadequate evidence of engagement and understanding of course theory. Lacks any inferences, examples and future implications are overlooked.

Executive Summary Structure and Presentation • Purpose / subject matter • Method • Results • Conclusions • Recommendations Communicate findings effectively : Writing style

5 to >4.0 Pts Exemplary

Well structured. Well written and clearly organized using standard English, characterized by elements of a strong writing style and basically free from grammar, punctuation, usage, and spelling errors.

4 to >3.5 Pts D

Good Structure Above average writing style and logically organized using standard English with minor errors in grammar, punctuation, usage, and spelling.

3.5 to >3.0 Pts C

Some structure – some repetition of information in places. Average and/or casual writing style that is sometimes unclear and/or with some errors in grammar, punctuation, usage, and spelling

3 to >2.5 Pts P

Little structure Average and/or casual writing style that is sometimes unclear and/or with some errors in grammar, punctuation, usage, and spelling

2.5 to >0 Pts Unsatisfactory

No clear structure Poor writing style lacking in standard English, clarity, language used, and/or frequent errors in grammar, punctuation, usage, and spelling. Needs work.

2021/5/8 Assessment 2A (2): Final Executive summary report and appendices – Group Assessment here

https://rmit.instructure.com/courses/77545/assignments/553639 6/6

Total points: 15

Criteria Ratings Pts

2 pts

Appendices Appendices illustrate consistent and relevant research across all topics Turnitin similarity report submitted Statement of participation submitted

2 to >1.0 Pts Full marks

1 to >0.5 Pts C

0.5 to >0 Pts No marks

School RMIT UNIVERSITY

Program name Bachelor of Business (Economics & Finance)

Course/unit name International Monetary Economics

Name of lecturer/teacher Nataliya Ilyushina

Name of tutor/marker Nataliya Ilyushina

Program code BP251

Course/unit code ECON1082

Office use only

Date stamp

Assignment no. 2A(1) Due date (DD/MM/YYYY) 18/04/2021

Student/s

Class day/time Tue 15:30

Campus City

Family name SHANG

Given name PENGFEI

Student no. S3614390

Higher education cover sheet

for submission of work assessment

Integrity | Higher education cover sheet for submission of work for assessment 0806 0220 | 1 of 1

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Declaration and statement of authorship

1. I/we hold a copy of this work that can be produced if the original is lost/damaged.

2. This work is my/our original work and no part of it has been copied from any other student’s work or from any other source except where due acknowledgement is made.

3. No part of this work has been written for me/us by any other person except where such collaboration has been authorised by the lecturer/teacher concerned.

4. I/we have correctly acknowledged the re-use of any of my/our own previously submitted work within this submission.

5. I/we give permission for this work to be reproduced, communicated, compared and archived for the purpose of detecting plagiarism.

6. I/we give permission for a copy of my/our marked work to be retained by the school for review and comparison, including review by external examiners.

I/we understand that:

7. plagiarism is the presentation of the work, idea or creation of another person as though it is my/our own. It is a form of cheating and is a very serious academic offence that may lead to exclusion from the University. Plagiarised material can be drawn from, and presented in, written, graphic and visual form, including electronic data and oral presentations. Plagiarism occurs when the origin of the material used is not appropriately cited.

8. plagiarism includes the act of assisting or allowing another person to plagiarise or to copy my/our work.

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I/we declare that I/we have read and understood the declaration and statement of authorship.

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Further information relating to the penalties for plagiarism, that range from a notation on your student file to expulsion from the University, is contained in the Student Conduct Regulation, Division 2. Academic Misconduct and the Assessment Policy that are available on the Policies and Procedures website at rmit.edu.au/about/governance-management/policies.

Copies of this form can be downloaded from the student forms webpage at rmit.edu.au/students/student-essentials/forms/assessment-forms.

Task – 1

US monetary policy

The economy is likely to recover in the third quarter after an unusual recovery in the second quarter due to the survey of Covid-19 (Epanchin-Niell, R. S. 2017). Unemployment fell 0.5 percent In September, from the previous month, while wage records outside France continued to rise, despite continuing to fall by 10.7 million from February. This, combined with customer safety, which peaked six months later, likely supported private consumption, as evidenced by the surge in the auto and apparel trade at the same time. In addition, the unsuccessful development movement and the flow of housing, which began in the third quarter, should support private speculation. In the interim, the Democrats are conducting opinion polls for the November 3 public elections. Under Biden, monetary policy development will almost certainly benefit from increased government and pension spending and unfamiliar exchange rate policies.

US Economic growth

By the year, GDP is set to decline as a result of significant financial and monetary improvements, as well as the fog of a pandemic. Lower unemployment and greater customer safety should support family spending throughout the year. Despite pressure on the exchange rate from the United States and China and the renewal of blockade measures, threats from the outside are key. Experts from the Center for Economics predict that the developing GDP in 2021 will amount to 3.8%, which has not changed compared to the data of the previous month. In 2022, our government recorded economic growth of 2.9% (Baldwin & Di Mauro, 2020).

US financial overview

Despite internal difficulties with a rapidly changing worldview, the US economy stays the biggest and generally significant on earth. The US economy represents about 20% of the world’s supreme return, even more than China. The United States also has the sixth-largest GDP per capita (PPP), according to the International Monetary Fund. The US economy includes a densely populated and mechanically developed administrative territory, which accounts for about 80% of its income (Langpap et al., 2018). The US economy is awash with organizations housed in organizations in areas such as innovation, money management, medical services, and retail. Tremendous US affiliations likewise assume a significant part in foreign relations: more than one-fifth of the Fortune Global 500 associations come from the United States.

Task 2

Research depends on the above figures.

US balance of payments

In recent years, the US current account balance has had a strong impact on global foreign exchange flows, and the persisting imbalance between imports and exports has led to a predictable trade deficit (Oberhauser et al., 2019). Pay from US assets and speculation abroad record for a little portion of the current record equilibrium, and surplus in this class is practically lacking to adjust the immense irregular characteristics in imports and fares. Generally, the absence of financial records shows that the valuation of products and ventures purchased by US abroad is higher than the valuation of merchandise and organizations offered to outsiders. The U.S. current record deficiency has enlarged consistently since the 1990s, topping and a world record of 5.8% of GDP in 2019. The deficiency is restricted because of some increment in homegrown oil creation.

US business structure

The United States is the second biggest exporter of items and undertakings on the planet and a significant shipper of autos (Kang & Yoon, 2019)

. The United States dependably controls import/trade irregular characteristics, fundamentally because of reliance on obscure oil for its energy needs and solid homegrown interest in unfamiliar made items, or because of advances in homegrown oil creation. The energy hole is shutting. The standard of the partnered trade of the United States -, China Canada, Japan, and Mexico. Canada is the principal objective for US fares and China is the fundamental wellspring of imports.

US Export

The US has lost a portion of its huge edge throughout the long term, unmistakable merchandise really represents 66% of its absolute fares. The United States fundamentally sends out high-esteem fabricated merchandise and capital products, including progressed gear, airplanes, cars, and manufactured materials. By 2020, the United States traded “$ 1.51 trillion” in products (Phelps & Parente, 2017).

Imports by the United States

Over 80% of all US imports from abroad are food items. By and large, 15% of these imports are unrefined petroleum, fuel oil, and oil-based commodities. Force instruments, consumables, and hardware represent about 15% of imported items. US monetary approach

US taxation policy

The US of government generally goes through more cash than it gets, and consequently has caused a determined lack of assets as of late. The expected time for governments to sort out some way to adjust spending toward the finish of the story was somewhere close to 1998 and 2001 when a solid economy was creating higher-than-ordinary incomes. The shortage crested since 1945 from 2019 at 9.8% of GDP, yet has been consistently improving from that point forward; in 2015, the shortfall was limited to 2.4% of GDP (Baldwin & Di Mauro, 2020).

Task 3

Balance of Current account

The account’s current US deficit was $ 178 billion each in 2020. The US current account deficit rose to its highest level in more than 12 years in the second half of the last quarter, as record increases in consumer spending on imports and exports dominated. The Commerce Department announced a current account deficit that saw advances in goods, administration, and investment both domestically and internationally increased by 10.6% to $ 178.5 billion in the last quarter.

Investment in FDI

Data for the next quarter was revised to show a deficit of $ 161.4 billion from $ 170.5 billion, as recently revealed. Market analysts, when asked by Reuters, estimated that the current account deficit widened to $189 billion between July and September. The current account deficit amounted to 3.4% of the total production in the country in the second quarter of the last quarter. It was over 3.3% in the April and June quarters and was the highest since the last quarter of 2008. In any case, the deficit peaked at 6.3% of GDP in the last quarter of 2005, with the US currently not. Crude oil and fuel (Cohen, 2019).

Consumption of Trading across time

Merchandise imports rose from $ 94.4 billion to $ 602.7 billion, the highest since the last quarter of 2019. The widespread growth in light of interest rate declines following the easing of trade restrictions to reduce the spread of COVID-19 was fueled by car imports. mainly reflecting the cost of protected innovation, most notably innovation licenses. The steps for delivery and individual travel were also described (Bushnell et al., 2017).

Intertemporal business model

Between July and September, consumer spending rose 40.6% annually, aided by more than $ 3 trillion in government aid due to the pandemic. Customer spending fell by a record 33.2% in the next quarter. Merchandise exports returned to last quarter from $ 68.4 billion to $ 357.1 billion. The significant increase in exports was driven by the transport of vehicles, spare parts, and equipment. Exports declined between April and June following the closure of Covid overseas.

Task 4

Exchange rate of US

The dollar lowered the cost of imports and worsened the plight of US exporters, while Reagan’s financial backing bolstered spending on clients (Bushnell et al., 2017). As a result, imports to the US are too high, especially from Japan and Germany. America’s monetary and financial deficits widened, as did the Japanese and German stock exchanges.

Big mac index

The cost of the Big Mac in the US was $ 3.57 (depending on the store), and the cost of the Big Mac in the UK was “£ 2.29 (depending on the state). Or $ 3.57 / £ 2.29 = $ 1.56. Quite the opposite, and the real exchange rate at the time was £ 2.00 to £ 1”.

The central bank is affected by the exchange rate

Monetary weakness is the reason for picking whether to purchase or sell dollars. A solid economy will draw in the venture from around the world due to its obvious wellbeing and capacity to produce a palatable profit from speculation. As financial backers are constantly looking for the best returns that are not unexpected or “safe,” increased investment, especially from overseas, makes a solid capital record, as a result, the popularity of the dollar (Palmrose & Kinney Jr, 2018).

· The US dollar is the backbone of the global economy and saves money for trade and international accounts.

· Like some other cash, the general estimation of the dollar depends on the development of cash and the vision of the United States.

· By increasing fundamental and specialized variables, market research and global threats also affect the value of the dollar in the world market.

Capital flows and the use of cryptocurrency

Cryptocurrencies are used to circumvent laws and must go against higher standards, the executive director of the Bank for International Settlements (BIS) said. Banner ads and other virtual currencies have grown strongly over the past year, and financial backers are hoping to split their assets during the Covid epidemic (Lin & Wang, 2018). Bulls touch the currency and see the symbol as a “golden computer” and claim that it can serve to support inflation during the financial crisis and for significant growth. Despite this, cryptocurrencies have earned a reputation for their contributions to criminal activity. These are pseudonyms that make it difficult to determine who is trading. Janet Yelled, a US data custodian, recently said the government should “curtail” the use of cryptographic data for criminal exchanges.

References

Baldwin, R., & Di Mauro, B. W. (2020). Economics in the time of COVID-19: A new eBook. VOX CEPR Policy Portal.

Barron, A. R., Fawcett, A. A., Hafstead, M. A., McFarland, J. R., & Morris, A. C. (2018). Policy insights from the EMF 32 study on US carbon tax scenarios. Climate change economics9(01), 1840003.

Bushnell, J., Mansur, E. T., & Novan, K. (2017). Review of the economics literature on US electricity restructuring. Unpublished manuscript, Department of Economics, University of California at Davis, Davis, CA.

Cohen, S. D. (2019). Fundamentals of US foreign trade policy: economics, politics, laws, and issues. Routledge.

Epanchin-Niell, R. S. (2017). Economics of invasive species policy and management. Biological Invasions19(11), 3333-3354.

Kang, S. H., & Yoon, S. M. (2019). Dynamic connectedness network in economic policy uncertainties. Applied Economics Letters26(1), 74-78.

Langpap, C., Kerkvliet, J., & Shogren, J. F. (2018). The economics of the US Endangered Species Act: A review of recent developments. Review of Environmental Economics and Policy12(1), 69-91.

Lin, J. Y., & Wang, X. (2018). Trump economics and China–US trade imbalances. Journal of Policy Modeling40(3), 579-600.

Oberhauser, A. M., Krier, D., & Kusow, A. M. (2019). Political moderation and polarization in the Heartland: Economics, rurality, and social identity in the 2016 US presidential election. The Sociological Quarterly60(2), 224-244.

Palmrose, Z. V., & Kinney Jr, W. R. (2018). Auditor and FASB responsibilities for representing underlying economics—What US standards actually say. Accounting Horizons32(3), 83-90.

Phelps, C. E., & Parente, S. T. (2017). The Economics of US Health Care Policy. Routledge.

Polasky, S., Kling, C. L., Levin, S. A., Carpenter, S. R., Daily, G. C., Ehrlich, P. R., … & Lubchenco, J. (2019). Role of economics in analyzing the environment and sustainable development. Proceedings of the National Academy of Sciences116(12), 5233-5238.

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