项目详情

• 项目名称：Economic
• 分类：论文
• 发布者： ren***11
• 点击量：694
• 发布时间：2018-5-15 06:57
• 项目关键词：
• 项目描述： 项目描述：具体要求参考附件
  对承接人的要求：精通英语
  所需技术：经济学
  完成时间： 10hrs
  完成标准：不低于及格线。
  Question 1 (20 marks)
  Assume that the central bank follows the following monetary policy (Taylor) rule:
  (*) 𝑅𝑡𝑓𝑓−𝑟̅=𝑚̅(𝜋𝑡−𝜋̅)+𝑛̅𝑌̃𝑡, 𝑚̅>0,𝑛̅>0
  Note that, 𝑅𝑡𝑓𝑓,𝑟̅,𝜋𝑡,𝜋̅ and 𝑌̃𝑡 are defined as in lectures. 𝑚̅ and 𝑛̅ are parameters.
  The interest rate facing the markets is 𝑅𝑡=𝑅𝑡𝑓𝑓+𝑓̅, where 𝑓̅ is financial friction.
  AS schedule is represented by the following equation:
  𝜋𝑡=𝜋𝑡𝑒+𝜈̅𝑌̃𝑡+𝑜̅
  Inflation expectations are a mixture of backward looking expectations and expectations anchored to the inflation target:
  𝜋𝑡𝑒=𝜆̅ 𝜋̅+(1−𝜆̅) 𝜋𝑡−1
  The IS schedule is 𝑌̃𝑡=𝑎̅−𝑏̅(𝑅𝑡−𝑟̅)
  (a) Derive the AD curve in the case when the central bank uses the above rule (*). Derive the AS curve. (4 marks)
  Assume that 𝑛̅=𝑚̅=1,𝜆̅=0.2, 𝑏̅=𝜈̅=1, 𝜋̅=3 and 𝑟̅=3. Also assume that in period 0 the economy is in its long-run equilibrium, in particular, 𝑎̅=0, 𝑜̅=0 and 𝑓̅=0.
  Note: When doing your calculations in (b)-(c), round up to the third decimal place.
  (b) Assume that in period 1 the economy is hit by the demand shock 𝑎̅=−2 lasting for two periods and there is also financial friction 𝑓̅=1 lasting for two periods. Find the values of inflation, short-run output and real interest rate facing the markets in periods 1, 2 and 3. Explain how the economy will adjust to its long-run equilibrium starting from period 4. Accompany you answer with a well-labelled graph. (6 marks)
  (c) Now assume that in addition to the demand shock and financial friction from part (b) lasting for two periods, the economy is also hit by the supply shock 𝑜̅=2 lasting for 1 period. Find the values of inflation, short-run output and real interest rate facing the markets in periods 1, 2 and 3. Explain how the economy will adjust to its long-run equilibrium starting from period 4. Accompany you answer with a well-labelled graph. (6 marks)
  (d) Briefly explain how would your answers to (b) and (c) would change qualitatively if 𝜆̅ were higher. (4 marks)
  Question 2
  Question 2 (20 marks)
  
  A small country in the Atlantic Atlantopia has been exposed to the consequences of a worldwide financial crisis. Without policy action/s the country will inevitably slide into a (possibly deep) recession. The central bank has its target interest rate set at 0.5%. The government has existing debt, but is considering a large increase in infrastructure spending.
  
  You have been appointed as the economic advisor to Atlantic Atlantopia. Critically examine the options available to both the central bank and government to avoid a recession. Ensure to include in your analysis the possible consequences of their actions or non-actions. Consult the rubric for marking guidelines. Note that you are required to articulate the issue, and then provide an analysis, position and critique.
  
  
  Word limit: 1000-1200 words. Please include word count at the end of the essay.
  
  
  
  
  
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