ECON1016: Macroeconomic Impacts of Coronavirus Pandemic and Outlook for 2021 in Australia/Singapore: Macroeconomics Assignment, RMIT, Singapore

ECON1016, 2021S1, Policy Brief Instructions

ECON 1016 – Macroeconomics 1
Macroeconomic impacts of coronavirus pandemic and outlook for 2021 in Australia/Singapore

1. Overview
It has been more than a year since when the WHO declared the outbreak of coronavirus a ‘public health emergency of International concerns’. The world has never experienced a health emergency of this magnitude in the past many decades. Naturally, the government around the globe sprang into action to stop the spread of the virus. Various governments adopted some combination of all the common measures like school closures, travel restrictions, a ban on public gatherings, and temporary lock-downs of all economic activity. Bringing the economy or certain sectors of the economy to a standstill has its ramification even when the underlying purpose is saving a life. Most of the countries went into recession in 2020.

As per the latest estimates by the IMF, the global economy shrunk by 4.4% in 2020. However, significant progress in the development of an effective vaccine and its rollout has improved the prospects of economic revival for the global economy. After the strong decline in 2020, the global GDP is expected to rise by 4.5% in 2021 as per the latest OECD economic outlook.

The economic performance, however, will differ from country to country. In this assignment, you will assess the macroeconomic impacts of the coronavirus pandemic on your country of choice (Australia or Singapore) and present views on the economic recovery and outlook for 2021. You will take the role of the policy advisors, employed by government departments (your clients are therefore the government and its ministers) and present your report to guide macroeconomic policy. For this, you will apply skills and expertise to the knowledge accumulated in this course so far.

As an expert’s role in the government decision-making process, your task has the following two objectives:
Analysis: Experts are responsible for analyzing the economic scenario (depicting the likely impact of the policy on the economy), using specialized knowledge and technical expertise in the discipline.
Communication skills: Experts must communicate their findings and recommendations effectively to the decision-makers in government – ministers, senior public servants – and executives of corporations as independent/third-party observers.
This assignment is designed to help you develop the skills of critically interpreting and analyzing macroeconomic data and effectively communicating your findings to the targeted audience.

There will be two parts to this assignment:
Part A: Diagnostics (macroeconomics data interpretations)
Task: You apply knowledge to the macroeconomics data and present a diagnostic analysis of the economy. Make important observations and assess the current situation of the economy
Part B: Policy brief report
Task: You are asked to provide critical analysis of the macroeconomic impacts of COVID-19 in the form of the policy brief and present outlook for 2021 to guide macroeconomic policy. Policy briefs aim to be practical and well researched to make them useful and worthwhile for your clientele.

ECON1016, 2021S1, Policy Brief Tasks

Macroeconomic impacts of coronavirus crisis in Australia/Singapore

Part A: Diagnostics analysis of macroeconomic indicators

Task: It is useful to look at the trends of the main macroeconomic indicators in the past few years and analyze the behavior of these indicators before and during the pandemic to assess their macroeconomic impacts. In this part of the report, you apply knowledge about the macroeconomics data and present a diagnostic analysis of the economy.

Required steps: You must complete the following steps in the given order to complete Part A.
1. Choose one country; Australia or Singapore

2. You have been provided macroeconomic data on the Real GDP growth rate, CPI inflation, and the Unemployment rate for Australia and Singapore in the excel file titled “Macroeconomic Data on Singapore & Australia.xls”. This file contains one datasheet for Australia, labeled as “Australia” and one for Singapore, labeled as “Singapore”. You must focus on the datasheet that relates to your choice of country in step 1.

3. Presentations: In this step, you are required to generate excel charts for Real GDP growth rate, CPI inflation, and Unemployment rate. Most of the series starts from 2015 and ends in 2020 (December) and are on a quarterly or monthly frequency. For series on “monthly” frequency, you can choose to covert the numbers into “quarterly frequency by taking an average of three months (in a quarter). It is not necessary to do these conversions, it is left to the students to decide how to best present data for visual appeal and that best help him/her on performing ‘Diagnostics’ in the next step.

4. Diagnostics: After representing data in charts in step 3, in this step, you will perform the diagnostic analysis on the data. For this, follow some general guidelines below. Please note these are tentative guidelines and students are most welcome to be innovative and discreet while performing the diagnostics.

a. Real GDP growth rate: Analyze the trend in this series a few years before the start of the pandemic and during the pandemic and identify whether the economy got into recession in 2020 because of the pandemic by referring to the chart that you have created. Please note that we stick with the traditional.

Part B: Policy brief
Task: In this part of the report, you are asked to provide an analysis of the macroeconomic impacts of COVID-19 on your chosen country in 2020 and outlook and challenges for 2021 in the form of the policy brief. Policy briefs aim to be practical and well-researched to make them useful and worthwhile for your clientele.
Required steps: You must complete the following steps in the given order to complete Part B.

1. Macroeconomic Impacts of Covid-19 Pandemic on Australian/Singaporean
The economy in 2020:
Guide: Based on your diagnostics analysis in Part A on three major macroeconomic indicators of your chosen country, make a critical analysis of the impact of the current pandemic on your ‘chosen’ country. If any updated statistics on the indicators in Part A are available, your discussion may relate to those figures (of course, you are required to source them properly).
While outlining the macroeconomic impacts of the corona pandemic, discuss briefly the sectors which are hit hardest in your chosen country and the severity of the damage. Also, discuss briefly the role of macroeconomic policies adopted in your country of choice in containing the economic crisis borne out of the pandemic. Do not give too many details about the policy as such, try to focus on how the policy was helpful in mitigating the effects of the crisis.
2. Economic outlook for 2021 for Australia/ Singapore:
Guide: In this part, you will talk about the economic outlook for your ‘chosen country’ in 2021. Focus on the following:

• Here, you should talk about signs of economic recovery. If you discover that your chosen country was in recession in 2020, discuss whether the country is still in recession (as identified by real GDP growth numbers) or signs of recovery are visible. You can support your reasoning using any latest data available and you don’t have to stick to the data provided to you for Part A. Please reference your data sources properly.
• Write about the challenges to economic recovery.
• Talk about the pace of economic recovery and discuss how much time the economy will take to return to pre-Covid level both in terms of GDP growth rates and unemployment figures.
• You can take reference from the reports/publications such as “OECD Economic Outlook”, “World Economic Outlook” by IMF, national reports