Macroeconomics Assignment Students Name: Institution Affiliation: Analyzing and Forecasting Economic Variables Table 1: U.S Data on Economic Variables Economic variable 2012 2013 2014 2015 2016 GDP (percentage growth) 2.4 2.6 1.6 Investment (percentage change) 9.8 5.0 5.5 4.0 5.5 Real interest rates (%) 1.43 2.16 Unemployment (%) 8.1 7.4 6.60 5.70 4.90 Figures obtained from the National Bureau of Economics Website ("National Bureau of Economic Research Links to Government Agencies" 2017) Gross Domestic Product (GDP) The gross domestic product has been declining for the recent past. This is attributable to the global reduction of oil supplies and the weakening currency against other emerging economic giants. The level of economic growth from the emerging economies such as Asia has an influence on the U.S economic growth. This attributable to the reduction in the country’s exports thus the weakening of the currency. Investment The level of investment has significantly reduced over Osborn D. (2007). Public Expenditure and Economic Growth: A Disaggregated Analysis for Developing Countries. The Manchester School 75(5) 533 556. http://dx.doi.org/10.1111/j.1467-9957.2007.01028.x Cebula R. (2003). Budget deficits and real interest rates: Updated empirical evidence on causality. Atlantic Economic Journal 31(3) 255-265. http://dx.doi.org/10.1007/bf02298819 Corazza M. & Malliaris A. (2002). Multi-Fractality in Foreign Currency Markets. Multinational Finance Journal 6(2) 65-98. http://dx.doi.org/10.17578/6-2-1 Gemmell N. Kneller R. & Sanz I. (2011). The Timing and Persistence of Fiscal Policy Impacts on Growth: Evidence from OECD Countries*. The Economic Journal 121(550) F33-F58. http://dx.doi.org/10.1111/j.1468-0297.2010.02414.x Koenig G. & Zeyneloglu I. (2010). Monetary and Fiscal Policy Efficiency and Coordination in a Multi-Sector Open-Economy General Equilibrium Model. Scottish Journal Of Political Economy 57(4) 473-492. http://dx.doi.org/10.1111/j.1467-9485.2010.00527.x Kopcke R. Tootell G. & Triest R. (2006). The Macroeconomics of fiscal policy (1st ed.). Cambridge Mass.: MIT. National Bureau of Economic Research Links to Government Agencies. (2017). Nber.org. Retrieved 22 May 2017 from http://www.nber.org/links/gov.html [...]
Purpose of Assignment Week 3 will help students develop an understanding of what money is, what forms money takes, how the banking system helps create money, and how the Federal Reserve controls the quantity of money. Students will learn how the quantity of money affects inflation and interest rates in the long run, and production and employment in the short run. Students will find that, in the long run, there is a strong relationship between the growth rate of money and inflation. Students will review the basic concepts macroeconomists use to study open economies and will address why a nation's net exports must equal its net capital outflow. Students will demonstrate the relationship between the prices and quantities in the market for loanable funds and the prices and quantities in the market for foreign-currency exchange. Student will learn to analyze the impact of a variety of government policies on an economy's exchange rate and trade balance. Assignment Steps Resources: National Bureau of Economic Research - http://www.nber.org/links/gov.html Develop a 2,100-word economic outlook forecast that includes the following: •Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years. •Discuss how government policies can influence economic growth. •Analyze how monetary policy could influence the long-run behavior of price levels, inflation rates, costs, and other real or nominal variables. •Describe how trade deficits or surpluses can influence the growth of productivity and GDP. •Discuss the importance of the market for loanable funds and the market for foreign-currency exchange to the achievement of the strategic plan. •Recommend, based on your above findings, whether the strategic plan can be achieved and provide support. Use a minimum of three peer-reviewed sources from the University Library. Format your paper consistent with APA guidelines.