Overview
For your final project, you will pretend that you are a financial analyst who needs to complete a macroeconomic forecast report. Here is the scenario:
As a recently hired financial analyst, you have been assigned the management of wealth assets in a portfolio that invests in alternative energy ventures or projects. The division manager has requested a five-year macroeconomic forecast that considers the economic impacts on the rate of return on investments in the portfolio. The macroeconomic forecast should consider the passage of a combined investment exceeding $1 trillion over the next decade (2021 Infrastructure and Investment Act and 2022 Inflation Reduction Act). These investments strategically will support the economy by mitigating and adapting the US economy to a more climate-resilient future.
The macroeconomic forecast final project has several components that you will work on throughout the course, including a review of economic performance indicators, a review of the economic impacts of historic investments in a more climate-resilient US economy (2021 Infrastructure and Investment Act and 2022 Inflation Reduction Act), and a review of the outlook for monetary policy strategies that will have an impact on the project viability and rate-of-return with implications for project financing/interest costs.
Please use the recommended resources provided as you complete the final project. Other sources of information can be incorporated, but you will need to confirm the validity of any non-recommended source with your course instructor.
Instructions
Please complete a 6-8-page report (12-point font) in MS Word (excluding the cover, charts, tables, graphs, and reference pages).
Incorporate at least four to six scholarly references (the recommended resources included in the assignment description can serve as a strong basis to support the research efforts. Please coordinate with your course instructor for additional clarification or support relative to the acceptability of resources). All in-text citations and references, including the textbook, should follow APA style.
The paper must include charts, tables, and graphs from research incorporating and reflecting solid application of economic theory. The representation of quantitative information is based on your research effort and appropriate citation is required.
There are four sections:
Part 1. Economic Indicators
Requirements:
- Review and report the historical trends in at least two core economic performance indicators (Gross Domestic Product growth rate, inflation rate, the unemployment rate) from 2018 to present.
- Please review and report the data and trends from research in the context of explaining reasons for changes/shifts in each core economic performance indicator.
- Remember to use the work you already completed as part of the M4. Assignment: Economic Indicators Presentation.
Resources:
- Gross Domestic Product – Bureau of Economic Analysis (current)Links to an external site.
- St. Louis Federal Reserve Bank – GDP Growth RateLinks to an external site.
- Inflation Rate – Bureau of Labor Statistics (current)Links to an external site.
- St. Louis Federal Reserve Bank – Inflation RateLinks to an external site.
- Unemployment Rate and Labor Market – Bureau of Labor Statistics (current)Links to an external site.
- St. Louis Federal Reserve Bank – Unemployment RateLinks to an external site.
- The Conference Board – US Consumer ConfidenceLinks to an external site.
Part 2. Fiscal Policy Review
Requirements:
- Review the 2021 Infrastructure and Investment Act (IIJA) and 2021 Inflation Reduction Act (IRA) including areas of allocation of spending and discuss the impacted sectors within the US economy.
- Discuss the potential gains for investment in alternative energy (EV, carbon emission reductions, etc.) leveraging the public sector investment with private sector ventures/projects likely to impact the retirement fund.
- Evaluate the benefits of Keynesian-based infrastructure investments on alternative energy investment returns.
- Remember to use the work you already completed as part of the M3. Assignment: Planning for the Fiscal and Monetary Policy Reviews.
Resources:
-
- How Pandemic-Era Fiscal Policy Affects The Level of GDP (Brookings Institution)Links to an external site.
- Inflation Reduction Act Summary (Tax Foundation)Links to an external site.
- The Inflation Reduction Act: Here’s What’s In it (McKinsey & Company)Links to an external site.
- Infrastructure Investment and Jobs Act (IIJA) Federal Infrastructure Hub (Brookings Institution)Links to an external site.
- Infrastructure Investment and Jobs Act (IIJA) Macroeconomic Factors May Shape Local Strategies (Brookings Institution)Links to an external site.
- Infrastructure Investment and Jobs Act (IIJA)/Bi-Partisan Infrastructure Law (McKinsey & Company)Links to an external site.
Part 3. Monetary Policy Review
Requirements:
- Review and report the monetary policy strategies implemented in response to the COVID-19 pandemic (review cycle 2020 to the present) representing a significant shift from expansionary monetary policy in March 2020 to contractionary monetary policy starting in early 2022 to combat 40-year highs in inflation.
- Evaluate and identify a cause-and-effect relationship between higher borrowing costs and the need to mitigate inflationary pressures using the Future of Inflation article summary from the International Monetary FundLinks to an external site. to provide an in-depth explanation of the factors contributing to the dramatic and unprecedented historical response to rising consumer prices.
- Analyze the effects of higher borrowing costs on the required rate-of-return on investments in alternative energy ventures/projects.
- Remember to use the work you already completed as part of the M3. Assignment: Planning for the Fiscal and Monetary Policy Reviews.
Resources:
Part 4. Final Macroeconomic Forecast
Requirements:
- Provide a macroeconomic forecast of at least two macroeconomic indicators (GDP growth rate, inflation rate, the unemployment rate) over the next two to three years based on information gained from the macroeconomic profile of the US economy.
Resources:
- Students are advised to supplement forecasts with the following resources from the Congressional Budget Office and the US Federal Reserve Board:
Objectives
- Analyze the necessary conditions for economic growth and stability.
- Create a link between policies and productivity determinants.
- Analyze the costs and benefits of economic growth.