Narsee Monjee Institute of Management Studies

Macroeconomics
Group Activity

Dipankar De
Mumbai, October 2007
 Macroeconomics: Project

 A Group project on a given macro economic topic

– Project topic for each of 5-member Group (including names of Group

members) to be conveyed before the 2nd Session through email by the

Class Representative

– Project outline to be submitted by the end of 4th Session. Students to

discuss about the coverage in the project with the faculty

– Word limit: not exceeding 3,000 (font 11, 1.5 line spacing)

– Final Report submission at the end of Second Last Session (9th session)

– Each Group would have to make a PowerPoint Presentation on the Topic

based on the Project Report submitted

 Project Topics

1. Japanese Economy: A Macroeconomic Study

2. Strength of India’s Macroeconomic Fundamentals for Economic

Superpower

3. Fiscal Deficit & Fiscal Management in India

4. Inflation targeting in India

5. Liquidity management in the Indian Financial System

6. Foreign Exchange Management Policy in India

 Macroeconomics: Assignments

 A Group will make a PowerPoint presentation on one particular

assignment at the beginning of each lecture for 15 minutes only.

 Every Group should be prepared with the assignment before the

starting of the lecture (hard copy & soft copy)

 The presentations would start from the 2nd Session onwards.

 Assignment Details…

 Group 1:
– Plot India’s GDP at market prices, GDP at factor cost at current prices, GDP
at factor cost at constant prices for the period 1970-71 to 2005-06
– Plot the GDP growth rates for the same period
– Calculate Compound Annual Rate of Growth % (CARG)
– Plot India’s GNP at factor cost at current & constant prices for the period
1970-71 to 2005-06
– Sub-divide the period into 3 periods & carry out the same exercise as above
• 1970-71 to 1984-85; 1985-86 to 1994-95; 1995-96 to 2006-07

– Comment on the overall growth story of India during each of the sub-
phases in detail
– Comment on the volatility of the growth rates
 Assignment Details…
 Group 2:
– Plot India’s overall GDP, GDP agriculture, GDP industry, & GDP services at
factor cost at current & constant prices for the period 1996-97 to 2006-07 on
a quarterly basis
– Plot the all relevant growth rates of the data series for the same period
– Calculate Compound Annual Rate of Growth % (CARG)
– Sub-divide the period into 2 periods & carry out the same exercise as above
• 1996-97 to 2000-01 & 2001-02 to 2006-07

– Comment on the share of GDP components over the period

– Comment on the average growth rate & the volatility of the growth
rates
– Comment on the sectoral contribution in the overall GDP growth, and
the rationale behind such observance
 Assignment Details…

 Group 3:
– Plot India’s domestic savings for the period 1980-81 to 2005-06
– Plot various components of domestic saving
– Plot savings to GDP ratio for the same period
– Plot GDCF for the period 1980-81 to 2005-06
– Plot GDCF to GDP ratio for the above period
– Comment on the savings & investment ratio in India

– See the trend in Private Final Consumption Expenditure (PFCE)

– Also see the trend in its various components
– Comment on its growth during 1991-92 to 2005-06
 Assignment Details…
 Group 4:
 Show the weighting diagram of major components of IIP in the overall
IIP Index
 Also show the major classification process under IIP series

Annual
– Plot IIP General, IIP manufacturing since 1985-86
– Plot IIP capital goods, IIP consumer goods (durables + non-durables)
– Plot IIP infrastructure, IIP electricity, IIP cement, steel

Quarterly since 2001-02

– Plot all the above,
– Comment on the movement; emphasize on the last 3 years
 Assignment Details…

 Group 5:
– Calculate Inflation based on WPI for the period 1970-71 to 2006-07.
– Also calculate the same for the fuel group in the overall WPI
– Calculate Inflation based on CPI(IW) for the period 1970-71 to 2006-07

– Calculate quarterly inflation based on WPI for the period 2000-01 to

2007-08
– Plot CPI & WPI on the same graph to comment on their movement during
1991-92 to 2007-08
– See whether there is any relation between inflation rate (WPI) & money
supply, interest rate & GDP growth rate
 Assignment Details…

 Group 6:
– Plot Bank rate(%) & SBI Advance Rate(%) for 1980-81 to 2006-07
– Comment on the movement of the same during the period
– Plot India’s prime lending rate (PLR) since inception
– Plot the growth in money supply (M3), during the same period
– Plot Bank’s credit to the commercial sector during the same period

– Plot 365 days & 91 days -Treasury Bill rates for the period 1980-81 to
2006-07

– Plot 5-yr yield since 2002-03 (quarterly) & comment

 Assignment Details…

 Group 1:
– Plot Fiscal deficit in India as a % of GDP since 1980-81 (centre only)
– Plot Fiscal deficit in India as a % of GDP since 1980-81 (centre + states)
– Plot Fiscal deficit in India as a % of GDP & inflation rate during the same
period
– Plot Fiscal deficit in India as a % of GDP & GDP growth rate during the same
period

– Comment on Foreign Direct Investment (FDI) & its components in India

since 1991
– Comment on Foreign Portfolio Investment (FPI) & its components in India
since 1991
 Assignment Details…

 Group 2:
– Comment on Foreign Direct Investment (FDI) & its components in India
since 1991
– Comment on Foreign Portfolio Investment (FPI) & its components in India
since 1991
– Other investment details
 Assignment Details…

 Group 3:
– Plot India’s Exports & Imports ($ billion) for the period 1980-81 to 2006-07
– Comment on the growth rate of the same in a graph during the period
– Calculate Trade Balance (X-M)
– Do you see any great difference during the post reforms period (1991-2007)

– Plot India’s current account balance as a % of GDP during the period 1970-
71 to 2006-07
– Plot India’s foreign exchange reserves since 1970-2007
– List your observations on the above two
 Assignment Details…

 Group 4:
– Plot average Rs/ Us $ exchange rate during the period 1970-71 to 2006-07
– Calculate appreciation / depreciation during the same

– Divide the entire period taking 5-yr for each & calculate the average
appreciation / depreciation & comment on the same

– Calculate the volatility during the entire period & the sub-periods
– Plot current account as % of GDP & Rs/ $ exchange rate for the entire
period
– Do you find any kind of relationship
 Assignment Details…

 Group 5:
– Plot average Us $/ Euro exchange rate during the period 1999 to 2007
– Calculate appreciation / depreciation during the same & comment on the
same
– Take quarterly average rate & calculate the volatility during 2002-2007

– Plot average US Fed rates (quarterly) since 1991 & the US CPI inflation (%)
– Plot current account deficit as % of GDP of US & US $ / Euro exchange rate
for the entire period
– Do you find any kind of relationship.