Evaluation of the Macroeconomic Performance of Australia and USA

TRIMESTER 1, 2018: BUS700 ECONOMICS
EVALUATION OF THE MACROECONOMIC
PERFORMANCE OF AUSTRALIA AND USA

Executive summary
The paper contains a report which addresses the macroeconomic performance of Australia
compared to that of USA. The paper shows that GDP growth rate of the country does not
impact the inflation rate which can be used as a tool to influence the net export as the net
export of the country is very strongly related to the real exchange rate. The paper
recommends that exchange rate should not be used frequently by the government as it will
increase the debt liability in the future.

Table of contents
1.0 Introduction..........................................................................................................................4
2.0 Methods................................................................................................................................4
3.0 Findings................................................................................................................................4
4.0 Discussion and analysis........................................................................................................4
5.0 Recommendations..............................................................................................................11
6.0 Conclusion..........................................................................................................................11
Reference..................................................................................................................................12

1.0 Introduction
The USA and Australia are two of the best performer post-global financial crisis of the year
2007 among the developed economies of the world. While Australia has managed to continue
their economic growth for a long period of time, the USA has managed to attract the most
part of the FDI inflow in their country. In addition to that while USA is the largest economy
in terms of per capita nominal GDP, the per capita wealth is more in case of Australia.
Despite the different, there is one similarity that connects these two economies is that these
are two of the largest mixed economies in the world. The nature of these two economies of
the world is different in many more dimensions. The aim of this study is to evaluate the
macroeconomic performance of these two companies in details.
2.0 Methods
This paper has collected the data and information related to the macroeconomic performance
of the country from World Bank and IMF. Apart from that, other information regarding the
economy of these countries has been collected from the journals and articles related to the
topic. The synthesis of the data and the information collected has been done through the
technique of content analysis in order to arrive at the conclusion of the study.
3.0 Findings
As per the finding, the macroeconomic variables of Australia have a strong relationship with
them. The value of Australian dollar can be more effective in influencing the net export of the
country compared to that of the USA. Although, the cash rate of the central bank of the
country is dependent on the fund's rate of the USA, its strong base, steady growth rate and the
accurate government policies ensure that there will be no recession in the near future.
4.0 Discussion and analysis
4.1 Relationship between the macroeconomic indicators of Australia
4.1.1 Relationship between real GDP growth rate and the inflation rate