When did real output per capita in new zealand diverge

Assignment Help Macroeconomics

Reference no: EM132194207

Assignment -

Question 1 - Plot real GDP per capita for New Zealand and Australia from 1980 to 2005. Briefly explain your choice of series. When did real output per capita in New Zealand diverge from that of Australia? Could the divergence have been caused by the natural resource boom that started in the late 1990s?

Question 2 - The Reserve Bank of New Zealand has kept the Official Cash Rate (OCR) at 1.75% since late 2016. Critique the decision to keep it at this level "should the next decision be to keep it where it is, increase it, or decrease it? You should use appropriate data and the AD/AS model to motivate your answer. (Hint: read up on Okun's Law and the output gap in Krugman and Wells.)

Question 3 - Plot real GDP per capita for Greece, Italy, Spain, Portugal, and the USA from 2000 to 2016. Briefly: what policy tools did policy makers in the USA use to respond to the crisis, and in what ways were authorities in Greece, Spain, Italy, and Portugal constrained from making similar choices?

Question 4 - In the aftermath of the Global Financial Crisis, the New Zealand government's debt increased from around $68 billion in 2008 to $136 billion in 2012, or from 37% of GDP to 69% of GDP. Plot government spending, taxes, and welfare payments annually from 2000 to 2015. Use these data to calculate the budget deficit, and then explain the cause of the increase in government debt. Comment on the claim that the government did nothing in response to the crisis.

Question 5 - Plot inflation as measured by the GDP deflator and the CPI for New Zealand from 2000 to the present. The Reserve Bank is tasked with keeping CPI inflation between one and three percent. Is the Reserve Bank always able to control CPI inflation? Hint: start with the differences between CPI inflation and GDP deflator inflation and then think about instances where the two series have diverged.

Note - All of the data required for the assignment can be found at the World Bank Development Indicators website.

Attachment:- Assignment File.rar

Reference no: EM132194207

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