ECON 5031 – Jul/Aug 2007
Instructor: Dr. Hiển Văn Trần, Professor
The paper must be between 3 to 5 pages long and double-spaced with the font size of 12 and 1-inch margin for all four sides. The focus of the paper is on a survey and analysis of macroeconomics and microeconomics-oriented business articles that have been published within the past two months in non-Vietnamese business magazines/journals/websites concerning a non-Vietnamese event. Each of the chosen articles must be 1000 words or more; and your paper should cover three articles of non-related events. For each article, your write-up must include the source (magazine/journal/website name, publication date, author, and page number), a brief summary of the article, the embedded macroeconomic concept(s), and your thoughts on why you chose this article.
The goal of this essential course is to understand distinctly events happing all over the world with the term of microeconomics and macroeconomics. Based on this goal, during the course, the course’s knowledge helps me clarify the world’s economy, the way how firms and households interact together in the competitive market as well as the ways how the government adjusts a country’s economy through governmental policies. In the term paper’s content, I would like to choose three different articles which analyze three different events of microeconomics and macroeconomics to have a thorough grasp the economic foundation.
Article 1 _ “Russia’s economy”
Publication date: August, 24th, 2007. From the Economist Intelligence Unit Views Wire. Source: http://economist.com/daily/news/displaystory.cfm?story_id=9706752
To curb the fall in the rouble’s value against the dollar of around half of a percentage point, the Central Bank of Russia sold up to US$4bn on Aug, 21st. Due to the rouble’s dip, foreign investors have liquidated their rouble positions in the wake of turmoil in the US subprime mortgage market and potentially a change in sentiment towards risk on the part of investors. That the spread on the benchmark 2030 Eurobond had been rising since June made the biggest decrease of RTS Index, gold and currency reserves during that time. Regardless of the short term movements in currency and bond markets, the Russian government continued to run a healthy fiscal surplus, which has significant exposure to the US subprime mortgage market. In fact, Russia has to face the following difficulties. Firstly, although the authorities have tended to favor a competitive exchange-rate over the price stability in recent years, the importance accorded to a stronger rouble as a curb on inflation has increased this year. The reduction or elimination of upwards pressure on the rouble therefore it presents a problem for the authorities. Secondly, Russia’s corporations cannot be as sanguine as the government about the rise in spreads and the reduction in risk appetite on part of investors. Last but not least, that numerous issues were delayed, cancelled or scaled back makes Russian firms eager to generate finance for expansion and raise their profile abroad. If this is the worst of the subprime crisis for Russia, the country will have got off lightly. Embedded economic concepts:
• Central bank: A government monetary authority that issues currency and regulates the supply of credit and holds the reserves of other banks and sells new issues of securities for the government. • Stock market: An exchange where security trading is conducted by professional stockbrokers. • Financial market: financial institutions through which savers can directly provide funds to borrowers. • Bond: a certificate of indebtedness.
• Stock: a claim to partial ownership in a firm.
• Exchange rate: The charge for exchanging currency of one country for currency of another Why am I intrigued by this article?
In the macroeconomics, the government policies play a very important role to...