Choose a country which has experienced a significant external shock in recent years. Discuss the macroeconomic effects one would expect the shock to have in theory, and compare these to the effects observed in practice.

Topic: Choose a country which has experienced a significant external shock in recent years. Discuss the macroeconomic effects one would expect the shock to have in theory, and compare these to the effects observed in practice. Evaluate the responses made by domestic authorities.

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For this question you could use the covid-19 pandemic as this has been an external shock for many developing countries – e.g. due to large declines in exports, remittances, foreign direct investment etc. You would need to choose a specific country that has been affected by the covid-19 pandemic in these sorts of ways. I would suggest choosing a developing country that has been affected due to external impacts – e.g. losses in trade, remittances, loss in foreign investment etc. It doesn’t have to be the hardest hit, but to make it interesting you should choose a country that has been affected significantly. One possibility would be to choose a country which relies quite a lot on tourism, as that has been very adversely affected. Using NIGERIA as a case study for this paper: Africa’s most populous country 1. The essay as a whole should demonstrate the use and application of relevant macroeconomic theory to help understand macroeconomic policy issues in a developing country or countries 2. The essay should include analysis of empirical evidence, including a discussion of econometric evidence where relevant. If focusing on a case study country, you should discuss trends in relevant macroeconomic indicators, and explain the factors that may account for these trends (with reference to theory) 3.The essay should make use of relevant evidence, taken from good quality academic sources such as  journal articles, books and official working papers. If using data for a case study country, you should use official sources such as the World Bank’s Word Development Indicators, or the IMF Financial Statistics Yearbook.