International Macroeconomics and Government

1)
Project Summary:
Developed an open economy macro model, to compare effects of different monetary or fiscal policy on the output of a country, in times of a crisis (such as COVID19).

Goal:
Help understand the implications of monetary and fiscal decisions taken by the U.S. government and Federal Reserve in response to a crisis. Understanding the quantitative and qualitative implications of these decisions can help public policy decision makers, as well as investors who are directly effected by aforementioned decisions.

Approach:
The model incorprates changes in interest rate set by the central bank, changes in consumer spending and government spending as a result of the crisis, and effects of exchange rate on the imports and exports as well as on the ouput as a whole. Short run and long term equilibria were differentiated, on the basis of a typical IS-LM-FX Model.

  • Data used was publicly available from https://data.worldbank.org/. The analysis and tools were aided by the Department of Economics, Harvard University.

Outcome:
The model undertook a detailed analyis of monetary and fiscal decisions taken in past crises, and can be used to help understand the implications of similar situations in the future.

2)
Project Summary:
Developed an open economy macro model, to answer the simple question: "if all country borders were to be completely opened, which countries would tend to gain the most, and why?"

Goal:

Help understand the advantages and disadvantes of financial globalization, a hotly discussed topic within economic and public policy circles.

Approach:
The model uses the Cobb-Douglas aggregate production function, and uses data from 1970-2018 to asses effects of productivity, marginal product of capital, real output per worker, elastcity and physical capital per worker, to understand why some countries have stronger outputs and higher productivity, and who stands to gain the most from financial globalization.

  • Data used was publicly available from https://data.worldbank.org/. The analysis and tools were aided by the Department of Economics, Harvard University.

Outcome:
The model displayed which countries have performed the best in terms of increased output due to capital inflow from 1970-2018, and explained which factors played the major role in said performance. This benchmark can be used to understand which countries need what conditions, in order to benefit from financial globalization.