Econ essay 1600 words 18 hrs

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FC700E Economics

Report Guidance Notes

The Task

Write a report on the growth drivers and growth challenges of one of the economies below covering the period 2015-present Day.

India, United Kingdom, United States, Ghana.

The growth drivers are the factors that cause growth

The growth challenges are the factors that restrict growth

The Task

For your report you need to do the following key things:

Collect the growth data for your economy covering the period 2015-2019, present it in a column chart and analyse this data appropriately

Provide a statement on the GDP growth rate for the first two quarters of 2020 (of your selected economy).

Explain three growth drivers and three growth challenges using theory and evidence(and other supporting information as appropriate.

Make three policy recommendations to the government

The Marking Criteria

Allocation of Marks

Background (includes the introduction)	7.5%
Data Presentation and Analysis	10%
Performance Analysis	65%
Conclusions and Recommendations	7.5%
Presentation and Referencing	10%

Grade Bands

Grade Band	Background /7.5	Data Presentation and Analysis / 10	Performance Analysis /65	Conclusions and Recommendations / 7.5	Presentation and Referencing /10
70-100%	Excellent	Excellent	Excellent	Excellent	Excellent
60-69%	Very Good	Very Good	Very Good	Very Good	Very Good
50-59%	Good	Good	Good	Good	Good
40-49%	Basic	Basic	Basic	Basic	Basic
30-39%	Weak	Limited	Limited	Limited	Weak
0-29%	Very Weak	Very Limited	Very Limited	Very Limited	Very Weak

The marking criteria gives detail about each grade band and is available in the End-of-Module assessment (January) section of the VLE.

The detail in the top grade band is shown in the next slide.

Marking Criteria

Data Presentation and Analysis(10%)

Data Presentation and Analysis (10%)

Your data chart should be a column chart of real GDP growth data covering the period 2015-2019

You also need to state the growth rate for the first two quarters of 2020

You need to collect the data yourself and make your own chart.

The Worldbank databank has the data from 2015-2019

You should aim to present your data chart without error.

You will loose marks for any errors in the your chart

Data Presentation and Analysis(10%

Source: World Bank Databank(2020) 2015-2018 data

World Bank(2018) 2019 estimate

An example of a well-presented data chart

Real GDP Growth Rate(% change) Peru 2015-2019

2015 2016 2017 2018 2019 3.3 4 2.5 4 3.8

Year

Real GDP Growth Rate

Data Presentation and Analysis (10%)

Once you have presented your chart, you need to identify key trends in the data and identify other relevant observations

The more precisely you do this, the better.

The next 4 slides give you some guidance on how to do this

Data Presentation and Analysis (10%)

Identification of trends in data can be quite complex work but we will keep things simple for this assignment

Your task is as follows

Identify any general upward or downward adjustments in the growth rate and use supporting figures to explain

If there is not a general upward or downward adjustment in the growth rate, explain what is going on using supporting figures

Real GDP Growth Rate(% change) Peru 2015-2019

2015 2016 2017 2018 2019 3.3 4 2.5 4 3.8

Year

Real GDP Growth Rate

Data Presentation and Analysis (10%)

Looking at the data we have for Peru, there doesn’t appear to be a general upward or downward adjustment in the growth rate over the time period.

For this data we might write the following

The growth rate fluctuates significantly over this time period, with no consistent trend.

The growth rate increases by 0.7 percentage points in 2016 but fell sharply(by 1.5 percentage points) in 2017.

The growth rate rose again in 2018 by 1.5 percentage points. In 2019 the growth rate stayed almost at the same rate as 2018, with only a slight reduction in the rate of 0.2 percentage points.

Real GDP Growth Rate(% change) Peru 2015-2019

2015 2016 2017 2018 2019 3.3 4 2.5 4 3.8

Year

Real GDP Growth Rate

Data Presentation and Analysis (10%)

Let’s look at a different country

For this one, we could say the following

There is an upward adjustment in the growth rate between 2015 and 2017. The upward adjustment in 2016 is quite small ,only a slight improvement of 0.2 percentage points. In 2017 the upward adjustment is relatively large. The increase in the growth rate is 4.4 percentage points, taking the economy out of recession and into positive growth.

From 2017-2019, the growth rate remains constant at just over 1%.

Real GDP Growth: Brazil 2015-2019

2015 2016 2017 2018 2019 -3.5 -3.3 1.1 1.1 1.1

Year

Real GDP Growth(% change)

Data Presentation and Analysis (10%)

Remember, the marking criteria asks you for key trends and other relevant observations

The other relevant observations may be the average (over the whole period or the average over a particular segment of the time period) or high points and low points in the data.

Real GDP Growth: Brazil 2015-2019

2015 2016 2017 2018 2019 -3.5 -3.3 1.1 1.1 1.1

Year

Real GDP Growth(% change)

Performance Analysis (65%)

This is about the growth drivers and growth challenges during the period 2015-2019.

You must clearly identify and explain three growth drivers and three growth challenges

The growth drivers are the factors that cause growth

The growth challenges are the factors that inhibit/restrict growth

Performance Analysis (65%)

Growth drivers could be demand side drivers(factors that raise demand for goods and services) or supply side(factors which cause firms to be able to produce more).

What factors would raise the demand for goods and services?

Growth Drivers

Performance Analysis (65%)

Examples of demand side growth drivers are

Growth in the world economy

Expansionary fiscal or monetary policy (e.g. cuts in tax rates or increases in government expenditure or cuts in interest rates)

Improved consumer confidence, leading to increase in consumption expenditure

Improved investor confidence, leading to increases in investment expenditure

Demand Side Growth Drivers

Performance Analysis (65%)

Examples of supply side growth drivers are

improvements in technology

Improvements in human capital

Improvements in physical capital

These are long run changes in production conditions. It takes some time for these improvements to be generated. The effects of previous investment in any of the above may be being experienced in a given time period

Supply Side Growth Drivers

Performance Analysis (65%)

For each of your three drivers and challenges you must do the following

Clearly identify your driver or challenge

Use your evidence and supporting information to support your claim and to explain.

Explain clearly why your identified factor is creating/constraining economic growth using economic theory as appropriate.

Growth Drivers

Performance Analysis (65%)

In Peru over this time period (2015-2019), a growth driver is export growth

According to the world bank (2020), exports grew by 4.3% in 2015, 11.8% in 2016, 8.8% in 2017 and 3.9% in 2018.

This is facilitated by two things.

1. Growing demand for commodities (e.g. copper, zinc and tin) as developing economies industrialise, especially China (McKinsey, 2017)

Although China is a resource rich country, it’s demand for commodities to facilitate it’s growth has been greater than the national supply of commodities, creating a high global demand for commodities(McKinsey, 2017)

2. Improvements in mining production in Peru, facilitated by previous investments in this industry (World Bank, 2019).

Peru is the third largest producer of copper, silver zinc and tin and the seventh largest producer of gold (Peru Reports, 2020). According to market research reports(2019) there is an ongoing modernisation of the mining industry in Peru, including automation and the use of wireless technologies. Foreign investment helps to facilitate progress in the industry and Peru is the fourth largest recipient of foreign investment in Latin America and the mining industry is among the 5 industries that attracts the most foreign investment(Santander, 2019).

Growth Drivers: An Example Peru

Using evidence to support explanation

Performance Analysis (65%)

The rising world demand for minerals will cause the AD line to shift to the right (from to raising the demand for the countries products.

This creates incentives for firms to increase production. There is a movement along the SAS line towards a new higher equilibrium GDP. The economy moves from to .

Using economic theory to support explanation

Growth Drivers: An Example Peru

Conclusions and Recommendations

Remember your conclusion needs to be a summary of the key points of your report

The most interesting and relevant points

Remember also that you need three policy recommendations.

These need to be based on your assessment of growth drivers and challenges

They cannot be isolated ideas – recommendations should be linked to what has been written in the previous sections of the report.

You should be specific about the policy and explain why this would improve the growth prospects.