Use RBCmodel and New Keynesian DSGE modelto analyze the following current macroeconomics issues.

1.   In his recent policy speech for2014, the Chief Executive of Hong Kong announced the new provisions of morethan HK$10 billion a year for helping low-income households and the elderly.

2.   In recent months there have beenextreme weather conditions happening in the world, e.g., the heavy snow stormin the United States and the massive flooding in the United Kingdom.

3.   On March 13, 2014, the ReserveBank of New Zealand increased the official cash interest rate by a quarterpercentage point to 2.75%.

4.   On November 21, 2014, the People’sBank of China cut its benchmark one-year loan rate by 0.4 percentage point to5.6%, the first interest-rate cut since July 2012.