Using a numerical example of your own making distinguish between the bilateral and the effective exchange rate. (20 marks) (b) With the aid of an example, distinguish between a currency depreciation and a currency crisis. (20 marks) (c) Even though it is seen as a twin crisis the Asian currency crisis of 1997 can be explained by a combination of First and Second-Generation models. Critically assess this view. (60 marks) Explain and illustrate your answer in no more than 2,500 words. This limit includes tables and captions but excludes footnotes, endnotes, tables of figures and references. Answers that exceed this limit will result in a loss of marks. Full details of penalties for late submission, exceeding the word limit and other information can be found at the end of this assignment. Your assignment should be submitted via the Virtual Learning Environment (VLE) to The Centre for Financial and Management Studies no later than 31st August 2021. Full instructions are available on the VLE. Student Assignment Guidelines There is no single right way to answer this question, rather there are a number of approaches and different students will have their own view of what is expected and how much weight to give any particular element. Whatever your approach, you will need to plan your answer carefully, in order to provide a focused and succinct answer to the question, within the word-limit. In your essay you should demonstrate your knowledge of and ability to explain and apply economic models. You must justify any conclusion you reach based on evidence provided by you by reference to, or quotation from, the course notes, textbook, other course readings, or any other source you choose to use. As long as your essay gives a good justification for the answer and demonstrates your reasoning ability and your knowledge you can obtain a good grade. Your assignment requires you to focus on the material in Units 7 and 8 as well as chapters 19 and 21 from Miles and Scott, 3rd ed (2012). Exchange rates are at the core of this assignment, their various forms, the concept of a currency crisis and the idea that such crises take particular forms. In Part (a) you might begin your assignment by considering the definition of an exchange rate in Unit 7 and then for Part (b) move on to Unit 8 to find out exactly what a currency crisis is and how it differs from day-to-day exchange rate fluctuations. In Part (c) M425 Macroeconomic Policy and Financial Markets Session Four 2021 you should consider how different institutions or agents are central to particular types of currency crisis. You should consider the Asian currency crisis of 1997 and whether first and second-generation models have any role to play in providing an explanation of what happened. Your assignment must be properly referenced. Further information on referencing (ie the Harvard system) is available in the Studying at a Distance textbook by Talbot and on the Virtual Learning Environment. Plagiarism All assignments submitted must be your own work and written in your own words. Where you have used quoted material, you must make full reference to it. You must cite all references used throughout your work at the end of your assignment. Advice on what is classified as plagiarism and the action taken against this can be found in the University of London Regulations and on the Virtual Learning Environment. Submitting Assignments Students are required to submit their assignment in one place only on the Virtual Learning Environment using TurnItIn, the plagiarism detection software. Instructions on how to do this can be found on the Virtual Learning Environment on your module assignment page. Please see the information below for the current policy on penalties. IMPORTANT INFORMATION Late Submission Assignments submitted after the published deadline will be penalised. Marks will be deducted at a rate of two marks per working day (ie Mon-Fri, and a maximum of 10 marks for up to one week after the deadline). Assignments will not be accepted or marked beyond seven days after the deadline. If the submission deadline beyond seven days is missed, students must re-enrol for the course and submit all outstanding assignments. There is no procedure for extensions. Penalties for late submission of assignments (ie up to seven days from the deadline) may be waived if all the following conditions are met: ? Immediate, unexpected or unforeseen difficulties. Such difficulties may include: illness, bereavement, impact of disability, sudden and severe change in personal circumstances. ? The impact of such difficulties will be of a significant and unavoidable nature. ? The request must be accompanied by relevant documentation .
