ECO 530 Final Project Milestone One: Overview and Policy Evaluation   Overview: The final project for this macroeconomics course is an analysis...

ECO 530 Final Project Milestone One: Overview and Policy Evaluation

Overview: The final project for this macroeconomics course is an analysis of a country of your choice and the impact of a fiscal, monetary, or trade-related policy, as well as an industry that is likely to be affected either positively or negatively by the policy. For example, raising personal income or payroll taxes cuts back on disposable personal income, which can lower the amount of discretionary funds available for consumer spending on cars or vacation travel. You will analyze and evaluate the costs, benefits, implications, and potential impacts of your selected policy for that context. As a result, you will develop conclusions about the overall value of the policy as a means of correcting the economic problem it was designed to address. Finally, you will draw “big-picture” conclusions about the importance of understanding macroeconomic conditions for companies to compete and remain profitable. This milestone is due in Module Three.

Prompt: Submit a 2–3-page paper on your analysis that answers the following prompt. Specifically, the following critical elements must be addressed:

I. Overview

A. Which macro fiscal, monetary, or trade policy (e.g., marginal tax rates, reducing the rate of growth in the money supply, or signing a free trade agreement with a key trading partner) have you chosen to evaluate? What is the goal and essential structure of the policy? In other words, what problem is it intended to correct? How will it be implemented?

B. What country and which industry have you chosen as the context for your review of this policy? Select cases that are likely to be affected either positively or negatively by the policy and for which you can find sufficient information and data for this assignment. What issues or debates have been raised about your policy in this context? Be sure to provide all essential background informationnecessary for understanding your subsequent evaluation, forecast, and industry analysis.

II. Policy Evaluation

A. Evaluate your given policy through the lens of each of the three major schools of economic thought listed below:

i. How would a New Keynesian view your selected policy in terms of its implications for your chosen context? Be sure to apply the New Keynesian model in your evaluation to determine the likely effects on major macroeconomic variables such as GDP, inflation, interest rates, employment, exports, and imports. Include charts and graphs to illustrate your claims where appropriate.

ii. How would a monetarist view your selected policy in terms of its implications for your chosen context? Be sure to apply the monetarist model in your evaluation to determine the likely effects on major macroeconomic variables such as GDP, inflation, interest rates, employment, exports, and imports. Include charts and graphs to illustrate your claims where appropriate.

iii. How would a neo-classicalist view your selected policy in terms of its implications for your chosen context? Be sure to apply the neo-classical model in your evaluation to determine the likely effects on major macroeconomic variables such as GDP, inflation, interest rates, employment, exports, and imports. Include charts and graphs to illustrate your claims where appropriate.

B. What are the differences and similarities among the models in terms of their predicted outcomes? How do the different assumptions of the models result in policy debates among their respective adherents?

C. Which of the three contemporary macroeconomic schools do you believe most appropriately captures the likely impacts of the policy on your given context? Why? Be sure to defend your answer with specific evidence from the course or other academic resources. You will use your selection in the following section (i.e. “Macroeconomic Forecast”).

Requirements of Submission: The topic selection document should follow these formatting guidelines: 2–3 pages, double spacing, 12-point Times New Roman font, one-inch margins, and citations in APA format.

Instructor Feedback: Students can find their feedback in the Grade Center.

Rubric