Report1: Exchange Rate Regime Paper
Currency reports are routinely prepared and distributed by investment banks to clients world- wide. The report includes an analysis of the macro and microeconomic fundamentals of the coun- try involved, in absolute terms as well as relatively to the world business cycle, as related to your forecast: For instance, is the country in a recession? Does the domestic currency belong to any particular exchange rate regime? Then, the report often describes major economic, financial, and political events taking place in the selected currency market in the last few weeks and months: Elections, Central Bank interventions, important monetary or fiscal decisions recently taken, etc. Finally, the report uses all this and other information to formulate a short (up to 1 year), medium (up to 3 years), and long-term (up to 5 years) forecast of the selected exchange rate(s).
You need to prepare and submit such report to me. You can choose any currency on your own. The report should be around 500 words in length. Your analysis has to employ the tools and techniques we discuss in class, as well as any other economic, financial, or statistical tool you may be comfortable with. Currency reports are generally not too technical in nature, since they strive to be read by the largest possible number of clients. Therefore, you will attach an Appendix of no more than two pages in length in which you describe the analytics and details of the method- ologies you used to prepare the report. The Appendix may contain tables, graphs, and references.
Grading will be based on 1) the clarity and coherence of your analysis 2) the presentation and critical evaluation of the evidence you use.