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MGMT 673 Global Economic Analysis

Assignment 1: The Great Recession

Due Date

This assignment is due
by the end of Module 2.

Objective

The global recession that began in 2008, generally known as
the Great Recession, was the worst economic downturn since the Great Depression
of the 1930s. The objective of this assignment is a deeper understanding of the
relationship between economic indicators and the business cycle. You will track
several important economic metrics through this extraordinary recession and
recovery.

Directions

Begin by choosing a
country of interest from those listed in Marthinsen Appendix
1-1 (Excluding the
United Kingdom as it is provided as an example). Using the International
Monetary Funds (IMF) World Economic Outlook database, obtain the following
economic metrics for the years 2007 to the present: 1. Gross Domestic Product,
2. Investment, 3. Saving, 4. Inflation, 5. Unemployment rate, and 6.
Government
debt. Data for some countries may be incomplete. If so, please choose another
country.

For this assignment, begin with an introduction explaining
the purpose of the paper and the country chosen. Then, present these metrics
graphically so that relationships to the contraction and subsequent expansion
in GDP are apparent. Detailed guidance on how to create a graph in MS Excel is
provided below. The IMF database allows for several choices for the computation
of each metric, so notes to the graph and in raw data should specify what the
metric measures, for example, year over year percentage change in GDP. Next,
explain how and why each varied during the course of the Great Recession. Determine
whether each indicator (except GDP, which is the measure of the recession) is
procyclical, countercyclical or acyclical. Did the indicator move as the
discussion in Marthinsen (see Exhibit 4-13) suggested? If not, suggest a
reason.

When interpreting the
data, keep in mind that some indicators are computed as a year over year
percentage change. If GDP, for example, drops from a 5% year over
year
increase in one year to zero percent (0%) in the next, then GDP remained
unchanged over the two year period. Similarly, some indicators, such as
Savings, are computed as a percentage of GDP. If Savings as a percent of GDP
showed no change from one year to the next, but GDP declined, then the Savings
declined with GDP.

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The paper should be in
APA format. Use an APA style guide such as the Purdue
Online
Writing Lab. Purdue OWL also includes an APA sample paper which may be helpful.
Do a search within the Purdue OWL website for sample APA paper. The paper
should not exceed four pages excluding a title page and reference list and
appendix.

The
graph of the economic indicators should be placed in the body of the paper for
easy reference but the raw data is best suited for an appendix.

Creating an Excel Chart
Using IMF Data

Access
the IMF World Economic Outlook (WEO) database with this path: IMF Home/Data and
Statistics (top menu)/ World Economic Outlook Databases (scroll down to find)
/World Economic Outlook Database (most recent)/Download WEO Data By
Countries/then select the desired country and
select the desired metrics in a five step process. Generate the report which
may then be downloaded in an Excel compatible format. The database should look
like this:
.jpg”>

Here is an example of
the report for the United Kingdom.

.png”>

The
data from the IMF report were then copied and pasted into Excel. Next, the
Excel table was modified by deleting some unneeded columns and a row was added
that computes the budget deficit as a percent of GDP. Here is the result.
.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>

Subject
Descriptor

Units

Scale

2007

2008

2009

2010

2011

2012

2013

Gross domestic product,
constant prices

Percent change

3.427

-0.769

-5.17

1.66

1.117

0.251

1.756

Total investment

Percent of GDP

18.195

17.092

14.071

15.016

14.934

14.656

14.382

Gross national savings

Percent of GDP

16.009

16.149

12.656

12.323

13.471

10.925

11.045

Unemployment rate

Percent
of total labor

5.35

5.725

7.65

7.85

8.1

7.95

7.604

General government
revenue

Percent of GDP

36.964

37.433

35.561

36.181

36.943

36.806

37.737

General government total
expenditure

Percent of GDP

39.848

42.449

46.818

46.155

44.729

44.768

43.536

Deficit = revenue –
expenditure

Percent
of

GDP

-2.884

-5.016

-11.257

-9.974

-7.786

-7.962

-5.799

.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.png”>.png”>.png”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>
Finally, the
spreadsheet was modified to a format suited for creating a line graph.

2007

2008

2009

2010

2011

2012

2013

GDP

3.427

-0.769

-5.17

1.66

1.117

0.251

1.756

Investment

18.195

17.092

14.071

15.016

14.934

14.656

14.382

Savings

16.009

16.149

12.656

12.323

13.471

10.925

11.045

Unemployment

5.35

5.725

7.65

7.85

8.1

7.95

7.604

Deficit

-2.884

-5.016

-11.257

-9.974

-7.786

-7.962

-5.799

.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>

Excel
will create a graph with a few clicks. Select the entire table, then use
Insert/Line graph (do not choose one the stacked graphs as these add each
data point to the previous). Adding a chart title and moving the X-axis label
to the bottom yields this chart:
.png”>.png”>.png”>.png”>.jpg”>

.png”>

UK Economic Indicators

20

15

10

GDP

Percent

5

Investment

0

Savings

-5

Unemployment

Deficit

-10

-15

2007

2008

2009

2010

2011

2012

2013

If you need help with creating graphs, Excel has an
excellent help feature. Many videos are also available at YouTube..png”>MGMT 673 Global Economic AnalysisAssignment 1: The Great RecessionDue DateThis assignment is due
by the end of Module 2.ObjectiveThe global recession that began in 2008, generally known as
the Great Recession, was the worst economic downturn since the Great Depression
of the 1930s. The objective of this assignment is a deeper understanding of the
relationship between economic indicators and the business cycle. You will track
several important economic metrics through this extraordinary recession and
recovery.DirectionsBegin by choosing a
country of interest from those listed in Marthinsen Appendix1-1 (Excluding the
United Kingdom as it is provided as an example). Using the International
Monetary Funds (IMF) World Economic Outlook database, obtain the following
economic metrics for the years 2007 to the present: 1. Gross Domestic Product,
2. Investment, 3. Saving, 4. Inflation, 5. Unemployment rate, and 6.Government
debt. Data for some countries may be incomplete. If so, please choose another
country.For this assignment, begin with an introduction explaining
the purpose of the paper and the country chosen. Then, present these metrics
graphically so that relationships to the contraction and subsequent expansion
in GDP are apparent. Detailed guidance on how to create a graph in MS Excel is
provided below. The IMF database allows for several choices for the computation
of each metric, so notes to the graph and in raw data should specify what the
metric measures, for example, year over year percentage change in GDP. Next,
explain how and why each varied during the course of the Great Recession. Determine
whether each indicator (except GDP, which is the measure of the recession) is
procyclical, countercyclical or acyclical. Did the indicator move as the
discussion in Marthinsen (see Exhibit 4-13) suggested? If not, suggest a
reason.When interpreting the
data, keep in mind that some indicators are computed as a year over year
percentage change. If GDP, for example, drops from a 5% year overyear
increase in one year to zero percent (0%) in the next, then GDP remained
unchanged over the two year period. Similarly, some indicators, such as
Savings, are computed as a percentage of GDP. If Savings as a percent of GDP
showed no change from one year to the next, but GDP declined, then the Savings
declined with GDP..png”>The paper should be in
APA format. Use an APA style guide such as the PurdueOnline
Writing Lab. Purdue OWL also includes an APA sample paper which may be helpful.
Do a search within the Purdue OWL website for sample APA paper. The paper
should not exceed four pages excluding a title page and reference list and
appendix.The
graph of the economic indicators should be placed in the body of the paper for
easy reference but the raw data is best suited for an appendix.Creating an Excel Chart
Using IMF DataAccess
the IMF World Economic Outlook (WEO) database with this path: IMF Home/Data and
Statistics (top menu)/ World Economic Outlook Databases (scroll down to find)
/World Economic Outlook Database (most recent)/Download WEO Data ByCountries/then select the desired country and
select the desired metrics in a five step process. Generate the report which
may then be downloaded in an Excel compatible format. The database should look
like this:.jpg”>Here is an example of
the report for the United Kingdom..png”>The
data from the IMF report were then copied and pasted into Excel. Next, the
Excel table was modified by deleting some unneeded columns and a row was added
that computes the budget deficit as a percent of GDP. Here is the result..jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>Subject
DescriptorUnitsScale2007200820092010201120122013Gross domestic product,
constant pricesPercent change3.427-0.769-5.171.661.1170.2511.756Total investmentPercent of GDP18.19517.09214.07115.01614.93414.65614.382Gross national savingsPercent of GDP16.00916.14912.65612.32313.47110.92511.045Unemployment ratePercent
of total labor5.355.7257.657.858.17.957.604General government
revenuePercent of GDP36.96437.43335.56136.18136.94336.80637.737General government total
expenditurePercent of GDP39.84842.44946.81846.15544.72944.76843.536Deficit = revenue –
expenditurePercent
ofGDP-2.884-5.016-11.257-9.974-7.786-7.962-5.799.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.png”>.png”>.png”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>Finally, the
spreadsheet was modified to a format suited for creating a line graph.2007200820092010201120122013GDP3.427-0.769-5.171.661.1170.2511.756Investment18.19517.09214.07115.01614.93414.65614.382Savings16.00916.14912.65612.32313.47110.92511.045Unemployment5.355.7257.657.858.17.957.604Deficit-2.884-5.016-11.257-9.974-7.786-7.962-5.799.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>.jpg”>Excel
will create a graph with a few clicks. Select the entire table, then use
Insert/Line graph (do not choose one the stacked graphs as these add each
data point to the previous). Adding a chart title and moving the X-axis label
to the bottom yields this chart:.png”>.png”>.png”>.png”>.jpg”>.png”>UK Economic Indicators201510GDPPercent5Investment0Savings-5UnemploymentDeficit-10-152007200820092010201120122013If you need help with creating graphs, Excel has an
excellent help feature. Many videos are also available at YouTube.