Abstract This paper discusses China's economic policies. It focuses on its monetarypolicies and the use of its artificial control over its exchange rate as an unofficial brief of its foreignpolicy. It shows how China uses its monetarypolicy internationally to improve its positions on trade, foreign relations, and bilateral agreements with various countries.
Table of Contents:
Abstract
Overview
ChineseMonetaryPolicy Foreign Investment as Policy Foreign Trade
Conclusions
From the Paper "For many years the Chinese Yuan was pegged to the U.S. dollar and, until recently, this was not a foreign policy issue. However, as the U.S. as well as other markets, have seen their import markets grow far beyond their export markets and consequently maintain extreme trade deficits, the artificial manipulation of the Yuan has now become a matter of foreign policy. Many foreign markets view China's exchange regime, managed float or not, to be an economic weapon and one in which it has not been reticent to utilize."
Abstract The paper addresses the impact of the Federal Reserve's MonetaryPolicy. The paper answers these questions: Is the Federal Reserve more concerned about high inflation or the possibility of a recession? Is the Federal Reserve more concerned about other issues? What is the direction of recent monetarypolicy? What policy actions have the Federal Reserve taken to confirm that direction?
From the Paper "According to Timothy Geithner, President and Chief Executive Officer of the Federal Reserve Bank of New York, the consensus forecast for the U S economy is for solid growth this year and next. Forecasts are somewhat above the upper bound of the range of most estimates of U S potential growth. In addition confidence in the sustainability of the U S expansion as measured by changes in certain forecasts seems to be increasing."
Tags:Monetarypolicy, fiscal policy, Fed, Federal Reserve Bank, Fed Funds, Greenspan, inflation, interest rates, foreign exchange rates
Abstract This paper reviews the role of the Bank of Canada in setting monetarypolicy and then looks at several factors in the economy of the province of Nova Scotia to determine whether the provincial economy is tracking with the national Canadian economy in term of growth, inflation pressures, and so on. The findings show that monetarypolicy if working.
Abstract The paper assesses the state of the economy and monetarypolicy in the USA in August 2004. The paper discusses the U.S. federal reserve report to Congress characterizing the state of the economy. It looks at the focus of monetarypolicy on the control of inflation.
Abstract This paper examines the monetarypolicy of the Bank of Canada (BoC), explaining that it clearly believes in the importance of integrating and managing the Canadian economy vis-a-vis its integrated relationship with the global economic framework. The paper explains that the BoC's policy towards economic and currency management is centered on balancing its internal economic attributes; i.e. inflation, with those of its externally related economic functions; i.e. its exchange rate. The BoC has identified energy, and specifically petroleum, as central to both internal and external economic health and discusses its role in this regard at length.
Abstract This paper answers questions regarding the importance of fiscal and monetarypolicy. It also describes the affects they will have on interest rates, income levels, spending, savings as well as government expenditures.
From the Paper "Expansionary policy is a description of actions used to help increase the money supply in an economic system. For example if money supply is low or the amount of money being spent in an economy is low then banks may choose to lower interest rates and employers may choose to raise income or government reduce taxes. Regardless there will be more money in the economy, which will also increase the amount of investments individuals might choose as well as overall increases of capital. In addition to this the standard of living will most likely increase due to the additional funds each household would have in their discretionary income. Although some savings will also increase most often the increase in money is observed by households spending more and is relative to their income. It is true, the more one makes the more one spends."
An analysis of the aspects of China's monetarypolicy that have been used to indirectly influence Chinese positions in terms of international relations and foreignpolicy.
Abstract This paper examines how Chinesemonetarypolicy is utilized as a foreignpolicy device for very specific gains in international relations and looks at how this differs from other countries' monetarypolicy. The paper focuses on the managed float of the Chinese currency, the Renminbi (RMB) and discusses the other aspects of China's monetarypolicy that have been used to indirectly influence Chinese positions in terms of international relations and foreignpolicy.
Table of Contents:
Introduction
Hypotheses
Policy Relevance
Articles for Review
Critical Analysis of Articles
From the Paper "Authors Voon and Frankel examine certain aspects of China's exchange rate and currency policies. Voon, et al, in "Does China Really Lose From RMB Revaluation? Evidence From Some Export Industries," argues that China's managed float may not be necessary to protect China's export sector. Frankel examines China's exchange rate policy and strategy from a strict economist's perspective and makes the argument that a country has the right and obligation to choose whatever currency regime it feels benefits the nation and its citizens the most. Frankel examines the exchange rate policy from the perspective of alternate strategies such as expenditure reduction as well as interest rate manipulation. The import of his article is that while China benefits from its controlled exchange rate policy, it also has an obligation to do so but should consider alternate strategies since its currency and its economy has become so important to the global economy."
Abstract This paper discusses the monetarypolicy of the European Central Bank (ECB) and describes how it is optimally transparent and clearly communicated to the public so as to avoid any misunderstandings and avoid any shock effect to the economy due to shifting changes in the interest rates. The paper goes on to explain the primary objective of the ECB monetarypolicy, its operation framework and its guiding principles. The author has also included several figures to illustrate the points.
Outline:
List of Figures
Abstract
Executive Summary
Introduction
Literature Review
Price Stability
Role of MonetaryPolicy ECB Basic Tasks
Current Best Practice: Predictability
Interest Rates
Optimal MonetaryPolicy Rule
ECB Credibility
Legislative Powers of the ECB
Interest Rate 'Smoothing' Practice of ECB
Communication of MonetaryPolicy Critically Important
OECD's Recommendations for the ECB (January, 2007)
Bibliography
From the Paper "According to the European Central Bank the objective of monetary policy is "to maintain price stability" which is set out in the Treaty establishing the European Community. Stated is: "Without prejudice to the objective of price stability" the Eurosystem will also "support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community." (ECB, 2007) This is to include a "high level of employment" as well as "sustainable and non-inflationary growth". (ECB, 2007) The provisions of the Treaty illustrate the consensus that: (1) the benefits of price stability are of a substantial nature; and (2) the natural role of the monetary policy in the economy is to maintain price stability. (ECB, 2007; paraphrased)"
Abstract This paper deals with a general explanation of monetarypolicy and in what situations expansionary monetarypolicy should be used. This is further discussed by involving the role of interest rates and economic strength of the country, relating to most recent statistics.
From the Paper "Monetary policy is the "attempt to moderate the business cycle and control inflation by changing the quantity of money in circulation to change interest rates" (McTaggart et al, 1999: 27.2). In another words, it is the Reserve Bank of Australia (RBA)'s attempt to change the quantity of money and interest rates so as to affect aggregate demand and, ultimately, equilibrium real GDP and the price level. McDonald defines monetary policy as the government's policy on setting the level of the money supply (1996: 149)."
Abstract This paper explains that the economy of the United States is based upon the idea of free marketplace and enterprise, but the economic structure includes a fair degree of governmental regulation. The author points out that this federal monetarypolicy is primarily the job the Federal Reserve, or the Fed; through the buying and selling of governmental securities, the Fed can control the nation's money supply and important related factors, such as interest rates. The paper states that, currently, because of positive economic indicators, the Fed has reverted to its 1999-2001 monetarypolicy of reducing slowly the amount of cash in the economy by selling securities with the goal of reducing accommodation, preventing inflation, and aiding stability.
From the Paper "More recently, economic analysts have noted continued expansion in economic activity in most sectors, and significant gains in employment. And, despite an increase in consumer price inflation resulting from the surge in energy prices, core consumer price inflation has remained stable. Along with the promising economic reports and indicators came future predictions of solid economic growth for the nation. With this information, the Fed continued its policy of slowly raising the fed rate (through controlling cash flow in the economy by buy and selling securities-in this case, by selling them). Of course, the Fed was careful to approach the interest rate elevation carefully."
Abstract This paper describes the central monetary system of the United States government in the form of the Federal Reserve Bank. The paper examines the function of the bank and it's governing members and committees. The paper details the concepts and economic responsibilities of the bank and highlights its historic policies.
From the Paper "The major institution of centralized monetary policy in the United States is the Federal Reserve Bank ? which has been much in the news lately as it has continued to drop the discount rate. To understand why it has taken the actions that it has during this calendar year and to understand the relationship between the Federal Reserve Bank, a centralized monetary policy and fluctuations in interest we must in fact focus on the central bank ? or the Fed, as it is nearly universally called, even by those who never even think about investing in the world of high finance."
Tags: united, states, federal, reserve, bank, centralized, monetary, policy, ecomony, central, inflation, Clinton, Bush
Abstract This paper contends that the US Federal Reserve has been ineffective at using its available tools to counteract the country's economic problems and bring the US economy to normalcy. Specifically, the paper explains the reasons why recent monetarypolicy has been a mistake and will result in the deterioration of the economy rather than an improvement. The paper focuses on the Fed's recent interest rate hike.
From the Paper "Not long before the Federal Reserve has been able to sense a change in the inflation patterns, it now faces another bout of problems. According to Richard Clarida of Wall Street Journal "Several weeks ago, Alan Greenspan stirred up the bond market by opining that the then-low level of bond yields -- in tandem with strong growth, $50 oil and a succession of Fed rate hikes since June -- represented a "conundrum." The implications of the conundrum according to Clarida are grave as it indicates that there is more at stake than merely interest rates."
Abstract This paper looks at this second chapter where the author outlines the branches of government which are responsible for creating and implementing the monetarypolicies which regulate all corporations operating within or through the United States of America. The writer explains that the three major branches which contribute the most to economic policy making are the Executive Branch, Congress, and the Federal Reserve. Each of these branches is examined for its contribution.
From the Paper "Political institutions are largely responsible for the creation of economic policy, and likewise they are often held to blame if economic policy results in a depression of the economy. There are many types of economic policies which are decided on by different appointed policy makers; therefore decision making is extremely decentralized, allowing a variety of policy participants and policies to state concerns and objectives, without completely exposing themselves to possible future direct criticism. This allows for breathing room and a healthy dialogue within the elected power structure, as there is no one sector of the Government which is responsible for creating all of the nation's economic policies. The process of economic policy making is not completed at one singular level of government, but rather is the result of the combined collaboration of bodies within the separation of powers, and is a result of the checks and balances system."
Tags: government, federal, monetry, financial, policy, system, power, economy, state
Abstract The paper discusses how monetarypolicy is crucial to the economy and impacts all types of economic and financial decisions individuals make. It shows that since the United States is the largest economy in the world, its monetarypolicy also has significant economic and financial effects on foreign countries. The paper analyzes and examines various issues related to monetarypolicy. First, the state of the United States economy is discussed. Next, the issue of whether the Federal Reserve is more concerned about high inflation or the possibility of a recession is analyzed. Lastly, this paper outlines the direction of a recent monetarypolicy and examines the policy actions the Federal Reserve has taken to confirm that direction.
From the Paper "While monetary policy cannot impact either output or employment in the long run, it may affect them in the short run. For example, when demand contracts and there is a recession, the Federal Reserve may stimulate the economy, temporarily, and help push it back toward its long-run level of output by lowering interest rates. While monetary policy cannot expand the economy beyond its potential growth path or reduce unemployment in the long run, it may stabilize prices in the long run. Price stability is basically low inflation, i.e., inflation that is so low that consumers do not worry about it when they make decisions about what to buy, whether to borrow or invest, etc."
Abstract This paper examines why monetarypolicy is an important aspect of macroeconomic stability. The paper looks at why the tools, procedures and the body for enforcing these tools and procedures are very important aspects of any society. The paper then explains that monetarypolicy is a tool utilized by policy makers to correct inflationary or recessionary gaps. Next, the paper points out that the tools of monetarypolicy are used throughout an economy for other purposes; hence there are drawbacks to using it for macroeconomic stability. The paper also explores whether the marginal benefit from monetarypolicy exceeds the marginal cost of using the tools of monetarypolicy. In addition, the paper looks at how monetarypolicy also has 'spillover' effects for other markets, such as the financial markets or general business operation. In conclusion, the paper shows that lowering inflation or closing recessionary gaps have been the primary focus of the policies.
Outline:
Introduction
A description of MonetaryPolicy: A General Overview:
- Open Market Operations
- Required Reserve Ratio (RRR)
- Discount Rate (DR)
Macroeconomic stability and MonetaryPolicy: A Look at the 1970s and 1980s
MonetaryPolicy Efficiency: How the Change Did or Could Have Impacted Me
From the Paper "Monetary policy is used during inflationary or recessionary periods to correct the problem. Ideally during inflationary periods the Federal Bank and policymakers want to decrease the money supply and increase interest rates, so that borrowing/spending can be constrained. During recessionary periods, policymakers will try to do the opposite, that is increase the money supply, so that interest rates can rise and increase investment and spending, which will have a spill-over effect on employment (BOG: Federal Reserve System, 2006, p. 15)."
Tags: macroeconomic, profit, Federal, Reserve, Bank, money
