Topics in Macroeconomic Theory (MGEC06)
Winter 2025
Term Paper
Total: 100 marks.
The purpose of this assignment is to estimate the Phillips curve for the country of your choice and write a well-structured research report about the whole process of acquiring and refining your date, estimating, and interpreting the estimated coefficients based on the theoretical background of your models and empirical implications of the estimated equations for the country of your study.
In order to find help for writing, referencing methods, avoiding plagiarism, please consult with following website: http://www.writing.utoronto.ca/advice/using-sources
In order to help you, your article should include, among other things, following steps. Please note that your final paper must have an essay format (including references) with an internal coherence. The following steps are just to help you to organize your paper, and not to be treated like questions/answers mechanically.
1)- Choose a period time not shorter than 20 years and as recent as possible. For each year, find the following time series data for your country of choice (see the administrative part, below) from reputable sources (World Bank, UN, or local statistical agency of your country of choice): Inflation rate (the GDP deflator inflation rate is preferred), and real GDP, in terms of local currency (not the US dollar. Do not use the US$ in any way). A description of the used data sources should be included.
Present the data in form of tables and graphs that you think are informative for your audience. Mention the types and definitions of the data items and the assumptions that you may use to construct the needed data.
You must put the tables and graphs in the appendix. (20 points)
Topics in Macroeconomic Theory (MGEC06)
2)- We follow the chapter 15 of the textbook to write down the Phillips Curve and adaptive expectations theory as follows:
π =π +ϕt et (Y Yt − ) and π =πet t 1− ⇒ π =π +ϕt t 1− (Y Yt − )
To estimate φ and natural level of output, Y , first we can use the Microsoft Excel linear regression tool to estimate A and B coefficients in an equation like this:
π −π = +t t 1− A BYt
Note:
- You can use the Excel regression tools. To do this you need to select “Data” from the toolbar, then Data Analysis, then Regression.
- If you do not see the Data Analysis after selecting Data, you need to install the free plugin Data Analysis ToolPak. Please google search for the instructions on how to install this plugin.
- You can use any other statistical software that you are comfortable with, instead of Excel.
- All estimated coefficients and statistics should be fully presented. The exact output of the any software that you use must be included in the appendix. (30 points)
3)- After estimating a and b in the previous part, using algebra, rearrange your estimated equation into the
standard Phillips Curve like below to find φ and natural level of output, Y , for your country of choice.
π =π +ϕt t 1− (Y Yt − )
Discuss the size and sign of φ and natural level of output, that you found. Are they as you expected theoretically? Explain yes or no. Discuss the statistics of the model, like R2, t-statistics. (35 points)
4)- General organization, quality of presentation, creativity and elaboration of the paper and also proper referencing: (15 points)
Administrative issues:
- The project should be done by each student independently and alone. You should let me know following information by email (to masoud.anjomshoa@utoronto.ca), by March 9:
- Your name and student ID Number.
- A list of six or seven countries from the next page list, in order of your preference. You will be informed what country you must work on. You cannot change your country, after the approval. You cannot start the project without the country approval. Please choose a wide range of countries from all continents from the list below.
- The quality of analysis always matters more than quantity. But your assignment could be around 1000 words (around 4 pages), excluding the tables, graphs, and references.
- You should report all your references. As you know plagiarism is a violation that is prosecuted based on the university rules. In suspicious cases, I may decide to check your assignments using Turnitin software. – The assignment must be uploaded to Quercus before. The assignment must include the names and student ID Number on the cover page, otherwise your marks may not be recorded correctly.
- You must start the project early to avoid the last-minute rush, or technical issues or sickness, … The deadline will not be extended. No excuse like network failure, system interruption, or sickness … is acceptable. If you miss this assessment, according to the outline, it cannot be substituted by anything else.
- A 25% (of the assessment mark) per day will be applied to the late submissions. No submissions will be accepted four calendar days after the deadline. Any fraction of a day, even one minute, one hour or 10 hours is considered a whole day
-The only acceptable submission format is ONE file in PDF format, with following name. Marks will be deducted if the rules are not followed.
MGEC06_Country_lastname_Student#.pdf
For example, for Nigeria: MGEC06 _Nigeria_Jones_123456789.pdf
List of Countries
A: Algeria, Argentina,
B: Brazil, Bolvia, Bulgaria, Burkina Faso
C: Cambodia, Cameroon, Chile, Colombia, Czech Republic E: Egypt, Ethiopia
G: Ghana, Guatemala
H: Honduras, Hungary
I: India, Indonesia, Iran, Israel
J: Jordan
K: Kenya
M: Madagascar, Malawi, Malaysia, Mali, Mexico, Morocco, Mozambique, Myanmar N: Nepal, Niger, Nigeria
P: Pakistan, Paraguay, Peru, Philippines, Poland
R: Romania
S: Senegal, South Africa, Sri Lanka, Sudan
T: Thailand, Tunisia, Turkey, Tanzania
U: Uganda, Uruguay
V: Vietnam
Z: Zambia, Zimbabwe
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| 1)- Date collection presentation | ||||
| Excellent | Good | Fair | Poor | |
| 20 | 20 – 16 | 15 – 11 | 10 – 6 | 5 – 0 |
| 2)- Date arrangement and linear regression | ||||
| Excellent | Good | Fair | Poor | |
| 30 | 30 – 25 | 24 – 17 | 16 – 9 | 8 – 0 |
| 3)- Derivation of Phillips Curve and analyzing it | ||||
| Excellent | Good | Fair | Poor | |
| 35 | 35 – 28 | 27 – 19 | 18 – 10 | 9 – 0 |
| 5)- General quality, organization and presentation of the essay, and proper referencing | ||||
| Excellent | Good | Fair | Poor | |
| 15 | 15 – 13 | 12 – 9 | 8 – 5 | 4 – 0 |
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