You will find below the list of topics that you will include in your coursework. Please select only ONE topic and write a group coursework of 3000 words (excluding references). This coursework should be done by maximum 5 students. Participants in each group are expected to be actively engaged in preparing and writing processes of the final coursework.

Submission deadline: 3.00 pm BST on January 08, 2024 (submission link will be provided on Moodle)

1.   Economic  Growth: Consider a general  Solow economy and explain the balanced growth path. Evaluate the economic growth rates in your selected country by using the Solow  model  determinants  for the selected period. Critically discuss the role of technology, labour force growth, capital accumulation and savings in the catching up process for your selected country. Explain the limitations of the model. According to the Solow model, what are the conditions for convergence of the growth rates in your selected country with respect to the EU1? Is the country on the path of convergence or divergence? Discuss. (Macroeconomic variables of interest may include economic growth, technological progress, population growth, savings, capital accumulation, investment)

2.   Financial markets: How does the Efficient Market Hypothesis explain the behaviour of investors and the fluctuations of asset prices? Critically discuss the validity of EMH and its approach to explain the causes asset price irregularities? What are the likely consequences of asset price booms and busts?  Investigate whether there are any asset price bubbles in financial markets in your selected country for the selected period. To what level the financial markets are efficient in your country? What kind of monetary and fiscal policies are implemented for the selected period and what are the impacts on its financial markets. (Macroeconomic variables of interest may include short and long run interest rates, bond yields, housing prices, money supply, budget deficit)

3.   Role of expectations. How does the theory of rational expectations relate  future economic outcomes to the behaviour consumers and investors? Critically discuss the consumption and  investment behaviours for your selected country.  How  does the monetary policy affect expectations about future inflation and future interest rates? Give some examples from your selected country. What is the role of fiscal policy on expectations about future interest rate and future expected income? Is the IS-LM model useful in explaining movements in interest rates and income? Give some examples from your selected country. What are the limitations? Discuss. (Macroeconomic variables of interest may include consumption, investment, interest rate, inflation rate, budget deficit and money supply)

4.   Labour markets. Critically discuss the success of structural reforms on the flexibility of the labour market in your selected country. Discussion should include the effects of changes in the structure of the labour market institutions and any policy reforms related to competitiveness on unemployment rates and growth rates (avoid explaining the reforms, the focus should be on the effects of these reforms on the labour market). How does the economy adjust to medium run equilibrium when there is an expansionary monetary policy? Is the AS-AD model useful in explaining movements in price and output in your selected country? What are the limitations? Discuss.  (Macroeconomic variables of interest may include, employment protection legislation index (or any other similar variable), PMR index (or any other similar indices), unemployment rate, money supply, price level, GDP).

General Guidelines

•   During our lectures we have explained various macroeconomic theories with giving examples for advanced economies such as the EU and the US. In this assignment, the focus will be on discussing these issues for developing economies and  emerging markets. You are expected to select a country from the followings: Albania, Belarus, Bulgaria, Croatia,  Czech Republic, Hungary, Moldova, North Macedonia, Poland, Romania, Serbia, and Turkey (Alternatively, you can also select other emerging economies of Latin America and Asia (including China)).

•   There will be a 3000 wordcount  limit for the coursework  (+/-  10%  rule  for  the wordcount limit exists). Tables and figures are included in the wordcount. The word count DOES NOT include the bibliography or citations/references in the text (Harvard Style referencing) or in footnotes or endnotes (Chicago Style referencing). Any other information included in a footnote or endnote other than a reference or citation will be included in the wordcount.

•   You can obtain annual time series including a timespan from 2006 to 2023 for selected macroeconomic variables. You can reduce the number of observations according to the availability of data.

•   Macroeconomic variables that will be used in the analysis vary depending on the subject you select. Some examples for these variables are given in parenthesis at the end of each topic. These examples may give you some idea about what data to choose for the analysis. You may also include other variables that you think it is important.

•   You are not expected to run regressions for testing any relevant model, however, you are expected to use data for your observations.