International Finance Economics Essay Project

The project needs to be typed.
1. First page. The first page should include the following information:
Country Analyzed (eg. France) Group no Students’ Names & B00# Date Part 2: Theoretical Analysis and Forecasts Prepared for ECON 3331: International Finance
2. Length. The assignment will consist of three parts. Each part will be approximately 5 to 10 pages in length. 3. Font Size and Space. You should use either Times New Roman or Garamond fonts, size 12. The text should be double-spaced. 4. Coloured vs Greyscale Graphs. You can use colour for your e-copy graphs. But as the print-outs will be probably in black and white, when you have two, or more, lines in a graph use different line styles (e.g. solid, dotted, etc).Note that for the second part of your project, format requirements will be graded more strictly than part 1.

General Description:

Economic analysis typically involves explanation and prediction. During the first half or so of the course, we discussed about alternative models for modeling exchange rates how changes in exchange rates, due to changes in fiscal and monetary policy, can affect a country’s economy.

For your first part of your project, you collected a large number of data regarding the country you are examined. By now, you must have realized that all these data are related to the material so far discussed in class. Building on this information, this part of the project has two main requirements.

The first requirement is to examine the validity of the different models we encountered. Do the data provide any support, over shorter or longer period, and if not, can you provide a brief explanation? Furthermore, do you observe the linkages between fiscal and monetary policies and exchange rate movement we discussed in class?

The second requirement is to provide forecasts for the country’s exchange rate. Every economic model has two equally important roles: to explain what we observe and to offer prediction for policy purposes. You need to do the same by providing forecasts over two time horizons: short-run (3 months ahead), medium –run (1 year ahead), and long-run (3 years ahead).