2nd Assignment:
Comparative Economic and Financial systems will teach you the concepts, theory and institutions that will help you describe
and understand the economic system of any country in the world. This assignment has 3 sections (a 3 person team can divide it
up with one person signoff on each section). Based on your chosen country, you will present a 3 page report with A.
Regression graph, B. Y setor graphs and C. Analysis.
The goal of this assignment is to for you to analyze the following for your country of choice:
A. Understand the role of Capital investment (Investment is the CHANGE in capital between years, be careful to pick up the
right figures, not the TOTAL CAPITAL LEVEL, but the DIFFERENCE in capital between years is what we call investment Kt+1 – Kt
= I (Investment).
You will perform 1-4 OLS regressions using these any of these 4 models and derive the value of “A” = Total Factor
Productivity. Basically you are comparing capital to gdp growth rate 1970 to latest year.
YOU MUST USE PER CAPITA GDP GROWTH RATE OR PERCENT TO FACTOR OUT POPULATION. ALSO YOU MUST USE PERCENT FOR ALL FACTORS. DO
NOT COMPARE DOLLARS TO PERCENTS (Apples to Oranges!)
1. Jones steady state Production model Y= Ak^1/3
2. Solow-Romer Model Gy = Gk (Make sure you are using PER CAPITA small y and k, i.e. divided
By population change in the year.
3. Romer Model – Y based on R&D spending growth Y = A (1-l) (1+g)
4. Cobb Douglas Production Function model Y= Ak1/3 L2/3
B. In addition you will use your JUDGEMENT to select KEY VARIABLES about the country’s economic history and compare them to
the growth rate of GDP in a graph.
1. Population growth rate versus GDP (growth rate)
2. Export growth rate versus GDP
3. Government spending or investment overall or in any parameter (Education, highways,
infrastructure) versus GDP growth rate
C. A broad outline of the economic history of this country, e.g. Wikipedia, The Economist.
Key points to cover (1-3 bullets):
1. Who or what decides how to solve the three economic problems of What, How, and for Whom in Jones Chapter 1. (Production,
Distribution and Income).
2. The major changes in the country’s economic policy by year and what it means.
3. The type of economy and why you classify it as such (State capitalism, liberal free market, socialism, communism,
plutocracy).
THIS SECTION INVOLVES ANALYSIS. IF YOU SIMPLY COPY WIKIPEDIA YOU WILL GET ZERO CREDIT.