Choose any country except the U.S. whose economy you would like to study. If you are having a hard time deciding, you may want to think about a particular issue that is important to you and search country data by that issue. For example, if you prefer very little government involvement in the economy, you may want to choose a country whose share of GDP consumed by the government is very low. Let me know if you need help choosing! Your paper should address the following issues for your country of choice:
1. Report current data (and recent trends, where applicable) in the following variables: unemployment, inflation, per capita GDP, GDP growth, debt/GDP ratio, and income inequality. Then analyze the current state of the economy given this information. What part of the business cycle (and what type of output gap) do you see here? How much do we know about the state of the country and its people by looking at its macroeconomic data? Does this type of macroeconomic data miss any key information that you would need to assess economic progress in the country?
2. Discuss the general state of institutions in this country. This could include education, infrastructure, the “rules of the game” in the economy, central bank, budgetary control, etc. What do these institutions suggest about the potential for economic growth in this country in the long run? (Note that you could easily write a very long paper just on this. Please be concise, and choose what you think is the most important information to share about the particular country you’re studying.)
3. Given what you discussed in questions 1 and 2, what do you see as the key challenges for this country’s economy, both in the short-run and in the long-run? Discuss what you think the primary policy focus should be in the short-run (discussing both fiscal and monetary policy tools in your answer.) Then discuss what type of policies should be prioritized to encourage long-run growth in potential output.
The paper should be written formally (don’t let grammar and/or spelling errors distract me from your content.) Your grade will be based on the completeness of your answers and your use of course content and economic reasoning in those answers. If you have an opinion to share, make sure it is backed up with an economic argument! This is a significant part of the class (and your grade) so you should take it seriously and use it as a way to show me what you’ve learned this semest