Topic 2: The role of Eurozone during the coronavirus crisis
Write a report that assess whether the Eurozone countries have so far responded adequately to the economic challenges that have arisen during the coronavirus crisis.
The report should include the following sections:
• Cover Page: Title, Course, Name of Student
• Table of Contents
• Section 1. (25%) The Eurogroup is debating EU-wide unemployment insurance scheme to mitigate the effects of the coronavirus crisis.
o Define the different types of unemployment and discuss which one is the target of such a measure.
o Analyze the possible effects of this measure using the concepts delivered in class.
Section 2. (25%) The Eurogroup is discussing issuing Bons to cushion the economic downturn.
– In the Eurozone, which institution oversees monetary policy, and which one controls fiscal policy?
The main goal of the European Central Bank is controlling the inflation. Why it is so important? To answer this question:
– Define aggregate demand and aggregate supply in the long-run and short-run (use graphs), and
– Explain the main effects of rising prices in the economy using the concepts delivered in class.
• Section 3 (25%) Fiscal and monetary policies
– Provide information on fiscal and monetary policies that are being (or are planned to be) implemented as a response to the coronavirus crisis to prevent a fall of aggregate demand.
– Provide two examples of fiscal policies in face of an economic crisis and discuss their positive and negative effects on aggregate demand. Use the concepts of “multiplier effect” and crowding-out effect” delivered in class. This section must include a written explanation.
• Section 4. (25%) Coronavirus crisis will certainly cause a fall of global trade.
– Explain what the expected impact of the fall in international trade on the Eurozone economy might be. Use the AD/AS model and the concepts delivered in unit 8. This section must include a written explanation and charts.
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