"Economics / Finance / Banking" Essays 1-70

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Economics of Banking General Economic Questions Write Term Paper

… Economics of Banking

General Economic Questions

Write a one sentence description for each of the following financial instruments. Then fill in the following table in terms of type of claim (debt/equity), maturity (money market/capital market), risk (low/high/highest), and liquidity (low/medium/high). Identify a type of financial institution or other participant in the financial market (individuals, government, and business) that are most likely to borrow using these instruments, and a type of institution or other participant that are most likely to lend using these instruments.

A a) Commercial Paper: An instrument issued by commercial companies (banks, insurance and corporations) which offers fixed, generally low short-term rates for loans to the issuer for periods of one night ('overnights') to several months. It is generally used to fund working capital.

A b) Consumer Loans (Credit Card): Non-secured loans to consumers, generally with an indeterminate end date and minimum payments which are mostly interest.

Residential Mortgages: Secured loans to consumers using their primary or secondary residences as the main collateral. Generally backed by FHA if below certain threshold amounts, which change regularly.

A d) Municipal Bonds: Debt obligations issued by cities and counties, generally tax-free at the state level.

A e) Repurchase Agreements: Financial instruments issued in the money markets in which the seller provides securities to the buyer; the seller agrees to repurchase those securities for a greater sum at a later date.

A f) Junk Bonds: Bonds issued by debtors whose credit rating is below "investment grade," generally less than B. rating. These generally carry higher risk, but higher interest rates, than investment-grade bonds.

Type of claim

Maturity

Risk

Liquidity

Commercial paper

Debt

Consumer loans

Debt

Indeterminate

Residential mortgages

Debt

5-30 years

Municipal bonds

Debt

1-30 years

Repurchase agreements

Debt/Equity kicker

Usually <1 year

Junk bonds

Debt

1-30 years

Likely to borrow

Likely to lend

Commercial Paper

Corporations

Banks, Money Market funds

Residential Mortgages

Consumers

Banks, Mutual funds

Municipal Bonds

Cities, Counties

Banks, consumers

Junk Bonds

Corporations

Consumers, Mutual funds

Type Maturity Risk Liquidity Borrower Lender Commercial Paper Credit Cards Banker's Acceptances Residential Mortgages Municipal Bonds Repurchase Agreement Junk Bonds

2) Each of the following will make a poor medium of exchange except one. Why is each a poor medium of…… [read more]


Economic Stimulus Research Proposal

… ¶ … Economic Stimulus, Banking Firms, and Their Performances:

The Current U.S. Financial Environment and What Comes Next

The banking industry in the U.S. has been strongly and negatively impacted by the current financial situation of the country, particularly with… [read more]


Japan's Economic Crisis Term Paper

… " After each attempt to lower the value of the Japanese yen inflation failed to pick up and the country stumbled closer to crisis.

Retirement is a huge demographic challenge facing Japan. By 2010, twenty-one percent its population will be… [read more]


Principles of Banking Thesis

… ¶ … Banking

Modern banking has its antecedents in ancient Greece, where entrepreneurs undertook many of the basic functions still conducted by modern banks -- taking deposits, lending money and handling currency. Throughout the middle ages, various groups performed banking functions, mainly for royalty, traders and wealth landowners (Historyworld.net, no date). During this time, governance of the banking industry became stricter and the industry became more formalized.

For much of early banking history, the issue of interest was controversial. Christianity forbade the charging of interest and there were many instances where rulers banned bankers or interest-charging. Some banks, such as the Bank of St. George, were nonetheless able to prove successful, financing trade around the Mediterranean. As world trade grew more far-flung, risk levels increased. As a result, the banking profession grew and increased in complexity in response to the new operating environment of world trade, increasingly complicated by long distances, wars, and uncertain supply chains.

The National Bank Act at the end of the Civil War established the modern banking system in the United States, and the system developed in a similar fashion in other developed nations. The banking system was beginning to take shape, with a central bank and with stricter regulations.

The most fundamental function of banks is to act as a financial intermediary between savers and borrowers (SparkNotes, 2009). Banks accept deposits -- a form of safekeeping for money -- and then lend that money back out. The deposit function is seldom a viable business on its own, but it does serve a valuable purpose with respect to the safeguard of money. Physical forms of wealth are inherently insecure -- they can be stolen. Thus, banks provide security for such wealth. The lending function is where bankers can make profit. This function allows for economic expansion. It facilities capital investment, be it in housing or in equipment for a business.

Banks have expanded their role as facilitators of economic growth and capital preservation over the years. Banks now play a critical role in the creation of money. They lend to each other, in addition to the public. The result of this lending is that banks have a higher system-wide capacity for lending. Since more money can be lend, the needs of more borrowers can be met, spurring growth (Ibid).

Banks are just one of many different types of financial intermediaries. Although banks have expanded their roles over time, they have maintained a relatively strict role for themselves. They accept deposits and lend out the money in the form of mortgages, business loans, credit cards and lines of credit. The banks accept deposits in a variety of forms as well.

Banks are just one of many financial intermediaries that comprise the modern financial system. They are the second-largest financial intermediary, after pension funds (Federal Reserve Bank of San Francisco, 2001). Other institutional forms within the system are insurers, mutual funds, finance companies, credit unions and money market funds. Each has a specific role to play. Some of… [read more]


Finance it Is With Great Pleasure Admission Essay

… ¶ … Finance

It is with great pleasure and enthusiasm I apply for acceptance into the PhD program at your university. My enthusiasm for finance though not immediately recognized as a youth has steadily grown and developed during my career as a student. In a world that is ever evolving and changing, I feel it is essential that financial students and professionals of the future take into consideration the impacts technology and the global business environment will have on the field of finance. My interests in pursuing my professional degree align with this thought process.

My research experience thus far has created a strong desire to learn more about global finance. Thus far my research foundation has included examining the strength and creditability of various enterprises and industries as well as summarizing market trends and general financial information. My goal in pursuing higher education in finance includes exploring what strengths and best practices small to medium financial enterprises must adopt to succeed and remain competitive in an increasingly global or international business environment. More and more organizations are relying on international relationships to conduct business in. Technology has changed the way financial enterprises conduct business and communicate with one another. I am eager to pursue analysis of the financial industry in light of these changes to determine what impact technology has had on the industry and what impact it will continue to have on the industry and nature of services global financial firms have on consumers.

My skills base currently includes exceptional knowledge in finance and economics, exceptional presentational and team player ability complemented by a collaborative demeanor and the detail oriented, ambitious personality required of a professional student. Thus far my work experienced includes assisting the finance professor at Fisher College of Business, a position that provided great experience in the areas of analysis, market competition and financial review. I feel this foundation will provide me the knowledge base I need to excel in my professional pursuit of finance.

My love of finance was not always as clear to me as it is today. During my youth my family encouraged me to pursue finance and follow in their footsteps. My parents both worked in finance, my father as Vice President of a branch of the Chinese Central Bank for eight years; my mother as President of a branch of the Bank of China. Many of my relatives also work in finance; hence growing up I had much exposure to this exciting and stimulating field.

As I came into my own however I came to believe that I would excel as a historian rather than a financial professional. I have always been fascinated with…… [read more]


English Right of Set-Off Term Paper

… And, according to the Court of Appeals, claims that are merely contingent at the relevant date, but are not "due" are not employed in a set-off.

The right of combination differs from the right of set-off because, unlike set-off which… [read more]


Disrupting America's Economic System Term Paper

… The U.S. Treasury, led by Andrew Shaw, subsidized these gold flows by offering to temporarily place public deposits in banks if they imported gold from abroad.

The policy lowered the gold import point by offsetting the interest lost while gold… [read more]


Economic Recession on Customer Loyalty Research Proposal

… ¶ … Economic Recession on Customer Loyalty to Banks in the United Kingdom

The global economic recession has had a number of various effects on economics in the United Kingdom, including how people in the UK conduct their banking. While… [read more]


Role of Private Investment on Economic Development in Iraq Literature Review Chapter

… Role of Private Investment on Economic Development in Iraq

Private investment in developing countries

An overview on early Empirical studies

In 1980s, the developing countries encountered some increment in their development behaviours with debt crisis, which affected the formation of… [read more]


Merger Outcomes in Malaysian Banking Literature Review Chapter

… 1% in productivity is solely caused by an increase in technological progress of 17.1%, since the efficiency mean has fallen off by 6%. This means that the productivity expansion was driven absolutely by the transformation of technology, more readily than through the utilization of inputs and improved scale.

These newly amalgamated banks then had gone through a process of capital validation including reposting and reorganizing staff, changing branch locations and also delivery channel consolidation, to reap the benefits of merging. Out of the five years examined, the technological change has only decreased and experiences retrogress once in 2005, with a depreciation of 9%. However, since then, it can be seen that the evolution of technology in Malaysia is improved as the indices keep getting higher and increasing.

References

Abd-Kadir, H., Habibullah, M.S., Radam, A. & Azali, A., 2005. An Analysis of Technical Progress and Efficiency in Malaysian Finance Companies. The ICFAI Journal of Industrial Economics, pp. 6-19.

Abd-Kadir, H., Selamat, Z. & Idros, M., 2010. Productivity of Malaysian Banks after

Mergers and Acquisition. European Journal of Economics, Finance and Administrative Sciences, pp. 112-120.

Bank Negara Malaysia, 2001. Bank Negara Malaysia, Kuala Lumpur: Bank Negara

Malaysia.

Kumar, M., Fong, K.T. & Charles, V., 2010. Comparative evaluation of critical factors in delivering service quality of banks: An application of dominance analysis in modified SERVQUAL model.…… [read more]


Investment Projects Research Paper

… ¶ … Investment Projects

The success of a business depends on risk-taking. Decisions must be made to move a company forward and ideally lead to greater success. However, risks are not taken in the dark, rather, every metric and angle of a decision is analyzed with great scrutiny by those with knowledge in economics. The findings are drafted into reports and decisions are made based on this information. This practice, known as prudent decision making is an essential fallback should a risk prove to be less advantageous than originally believed. So, in firms, finance plays a significant role in decision making through proper capital budgeting, sensitivity analysis, project ranking, and ability to quantify inflation.

Capital budgeting is the first factor that businesses utilize in their decision making process. According to Arthur Sullivan, capital budgeting is a "planning process used to determine whether an organization's long-term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. It is budget for major capital, or investment, expenditures." (Sullivan, 375). In other words, capital budgeting is a means of ensuring that each proposed investment meets the company's overall goals and criteria for funding approval. There are multiple methods within capital budgeting that firms use when making a decision. Some examples of commonly adopted methods include calculations of net present value, equivalent annuity method, internal rate of return and profitability index. As a general rule, if an investment meets a certain numerical hurdle through these calculations, it will be presented to a board for approval. If it fails to meet the criteria, then other factors may be considered or the investment proposal may be dropped entirely depending on how risky it would actually be regarding the overall growth of the company. So, for many firms, capital budgeting reports provide an initial hurdle to determine whether a proposed project is prudent.

Sensitivity analysis is another method used by businesses to consider whether an investment is worth the risk. Sensitivity analysis is "the study of how the uncertainty in the output of a model (numerical or otherwise) can be apportioned to different sources of uncertainty in the model input." (Pannell, 1997). Sensitivity analysis is almost always preformed as a computer model that outlines the possible robustness of a certain factor, simplify models, explore the cost of input factors, and recognize instability (Saltelli, 2005). For instance, a lumber company when considering investing in a new forest may run a sensitivity analysis to determine the overall loss should this new site be hit with a local disease. Sensitivity analysis only works for factors that are subject to change and provides a way to understand the worst case scenario should an investment fail at certain levels or completely. It is sensitivity analysis that can typically…… [read more]


Brazil and China Term Paper

… ¶ … Global Economic Giants

Brazil is geographically the largest South American country and the fifth largest in the world (Economy Watch, 2010). With more than 190 million people, it is the fifth most thickly populated in the world. Its… [read more]


Existence of an Individual Term Paper

… ¶ … existence of an individual which determine the destiny and future course of life. The choices one makes come to define the road ahead. They can be a mirror image of the personal background or the result of external pressures. My choice to pursue doctoral studies at UC Santa Cruz is part of the former category. Indeed, in most cases, the passion for a certain area of study remains so often a mere hobby or aspirations. However, there are also few lucky persons, among which I dare to include myself, which have had the possibility to follow up on their passion and dream of transforming the subject of their strongest preoccupation into the field of a lifetime job. From this point-of-view, I see the study of monetary economics as the expression of my lifelong interest in the area of economics and at the same time as an obvious result of my entire academic and personal background.

Although I was interested in economy from the early stages of my academic life, there were certain personalities which guided my thoughts, ideas, and most importantly my questions towards the complex world of monetary economy. Professor Giovanni Ferri exercised an important influence upon me during my undergraduate years at the University of Bari, Italy. He was the one who supported me in completing my dissertation entitled "The Sacrifice Ratio and the Effectiveness of Monetary Policy." The paper discussed various factors that influence economic parameters in developing countries, and, although my task was difficult from the point-of-view of the accessibility of the data I had to use, my passion for the subject, the relentless efforts made to put together a high quality presentation, as well as the unlimited support from my professor enabled me to have a strong argument-based paper which won Special Merit from Evaluation Committee. However, none of this would have been possible if I hadn't benefited from the input of Professor Ferri who answered many of my uncertainties and guided my thoughts towards new, inquisitive questions.

As a result of this experience, and most importantly, as part of my constant desire to improve and find answers to problems facing economies in this globalised world, I am now completing my Master of Science in Economics degree at the University of Warwick where I focus on monetary economics, as part of my strive to…… [read more]


Europe Modern History Essay

… Europe

Svalbard is an archipelago in the Arctic Sea., de jure controlled by Norway but subject to unique international agreement.. It is located from 74 to 81N, above the Arctic Circle, and as such is the most northerly populated locality in Europe, and the northernmost civilian locality in the world -- Canada has permanent military settlements further north. Svalbard's significance for Europe is that there are both Norwegian and Russian settlements on the island of Spitsbergen. The archipelago has unique status as a free economic zone and a demilitarized zone. The Russian presence there amounts to a small mining village that was basically allowed under the Svalbard Treaty that assigned sovereignty of the archipelago to Norway, yet Norway typically exercise no control over the village of Barentsburg, which is instead administered by Russia (University of Oslo, 2011).

The Chunnel is the tunnel that runs under the English Channel. This project creates the first land link between the island of Great Britain and the European continent in history. In contains a high speed railway line, freight lines and a line for transporting cars through the tunnel as well. The Chunnel is significant in the context of closer ties between Europe and Britain, in particular closer trade ties. Given the strategic significance of the lack of land barrier between Britain and Europe during the two world wars, the presence of this link has security connotations for Great Britain as well (Doughty, 2014).

A sirocco is a hot wind from the Sahara that blows across northern Africa, the Mediterranean and southern Europe. Sirocco can be very fast winds, bringing with them both hot air and sand, the latter as evidenced by satellite photos. Sirocco can have a significant effect on the weather conditions across Mediterranean Europe.

Transdniester is a breakaway republic, de jure a part of Moldova but de facto independent, with its own government, border patrol and even its own currency. When the Soviet Union split, Transdniester's predominantly Russian-speaking population opposed independence, at least as part of the ethnically-Romanian Moldova. A war for independence was conducted, ending in the breakaway state. Transdniester has maintained close ties with Russia, one of the only countries in the world to recognize its autonomy. The region is of particular importance today because of the threat that Russia will run across southern Ukraine, capturing Odessa and then annexing Transdniester (The Economist, 2014). Such a move would render Ukraine landlocked, and put Russia on the EU's doorstep abutting Romania and Bulgaria. Moldova's future at that point would also be in doubt.

Austerity is a political term used to describe the economic condition of imposed hardship. The basic principle is that government cuts its budget, creating economic contraction. Many in Europe have made the case for austerity as a measure to boost the economy -- usually failing miserably in that regard. In some instances, the hardships created by austerity's bad economics has led to widespread social unrest, such as in Greece (Maltezou & Papadimas, 2013).

Required Question

I have… [read more]


Home Depot Term Paper

… The interest rate that could be generated for a risk-averse investor, thus, interest rate paid by the banks on savings accounts or certificates of deposit, varied from 4% up to 6%

which is much lower than the one that could be generated from investing into the shares. But the risks are much higher for the share investors and thus the risk-adjusted returns must be considered in order to arrive at optimal for investor decision. I am not a very risk-averse person and I would not forgoe stable interest on my savings account or certificate of deposit in order to invest money into shares. But as a profit seekrer, I would diversify my savings and invest some part of it into shares. Having set my risk preferences, I would screen the shares in order to arrive at optimal for me portfolio and I should invest into Home Depot. As the interest rates provided by the banks on rather safe investments are not as high as opportunities for players on stock markets, and also considering my risky nature, I would be willing to pay more for equity future today that I believe is promising annual return which I do not consider to be the fact for Home Depot.

On the other hand, as more patient people tend to prefer long-term promising investments rather than short-term but lower yielding investment, the latter would not consider Home Depot as an opportunity for them, while the former may do so. I would construct my portfolio from investing into savings account with stable return, and dividing the rest between very risky with high promising short-term results stocks and put in some part into Home Depot which I consider stock with higher returns in longer future. But if after having examined the stock opportunities, I would have found more promising short-term investment opportunities, I would choose them rather than Home Depot. The dividend discount model also states that the present value of the stock reflects not only one year expectations, but several years expeations and the price is equal in the present time for all. If the expected in the near future return is rather low comparing to other stock and safe investment opportunities, but the price of the share is rather stable and is increasing, also, other indicators are positive, this can signal of very positive middle-term opportunities and may be some inside information availalbe for the players on the market reveals that the comapny has some very good yield mid-term projects which drives up the value of the stock in the today market.

Another indicator of the future expectations of the share movements, is the volume of the shares usually traded which can reveal information available to the insiders and from which not experienced investors can trace behavior for themselves. In the recent past the volumes of the trade during the days when share prices were going down, were increasing, with the total increasing volume trend in the recent past. This can also signal about… [read more]


Growth Rate Slow Model ) Term Paper

… "According to the Bureau of Labor Statistics, labor productivity rose by 69% in the service-providing and mining industries in 2010, up from 42% in 2009. It is widely believed that research and development (R&D), patents, and management innovations have contributed… [read more]


Public Policy in the State Research Paper

… Maryland's forest lands future is greatly depending on private landowners.

Forest land in Maryland is owned by the following entities:

Individuals 51%

Public Sector 20%

Farmers 18%

Forest Industry 1% (State of Maryland -- Forest Taskforce, 2010)

It is reported that the Forest Conservation Act 9 FCA) has been successful in its implementation of the Forest Conservation Act (FCA) has "slowed the loss of forest land and has focused forested areas along stream valley corridors where water quality benefits can be most effectively realized." (State of Maryland -- Forest Taskforce, 2010)

VIII. Ecotourism and Sustainable Tourism

Ecotourism and sustainable tourism are presently hot items in the tourism market and this includes the destination of natural areas such as forest lands, lakes, mountains and streams in addition to other various tourist attractions. The work entitled "Conserving Land for People" states that communities are realizing benefits from tourism and recreation on federal forest lands. In fact, "recreation is the second largest producer of direct revenue from U.S. Forest Service lands -- bringing in more than grazing, power generation and mining combined -- and may account for as much as 74% of the economic benefit from these lands when indirect contributions are taken into account." ( )

Findings of the Study

This study has determined that the state of Maryland has invested wisely in its natural resources however, due to budgetary constraints some of the necessary programs that were previously funded have been reduced and employees of the Department of Natural Resources. It is time that the state of Maryland redesign its policies in regards to the forest lands of Maryland so that ecotourism and sustainable tourism can assist in growing the economy and revenues for the state of Maryland while simultaneously preserving, conserving, and protecting the…… [read more]


Stock Price Trading Value Article Critique

… The Eastern European economies are also dependent on following the recommendations of the IMF that imposes restrictions on government support programs for these countries. Turkey is an example of an economy that has emerged successfully into economic success through the… [read more]


Foreign Exchange Markets Research Paper

… Foreign exchange markets are one avenue that international businesses take to avoid losses during purchases and shipments. While some may argue that knowing the market and selecting the right technique saves the company money, there are also arguments that the techniques and specialty calculations required for such transactions can actually cost the companies as much as simply letting the market run its course (Giddy, 2003). This theory, known as the Purchasing Power Parity, has unequivocally shown that between the purchase and exchange of goods, the market prices between the two countries even out, resulting in little to no difference in exchange. Thus, the overall notion of manipulating the markets can actually be seen as wasteful on the part of businesses and often does not result in positive shareholder outlook. On such example of the futility of market manipulation is that of Japan.

In the 1970's Japan changed its currency exchange rate from the Bretton Woods Exchange Rate System (Taylor, 2001). The result was Japan taking an active role in intervening into the foreign exchange market. In just nine years, between 1991 and 2000, the Bank of Japan purchased and sold $304 billion U.S. dollars. While these figures may sound large, the reality is that this amount is actually very small compared to the total amount. Additionally, even with their interventions, there were periods of substantial loss of value for the Bank of Japan due to market fluctuations. Thus, the intentional purchase of currency in an attempt to impact the market resulted in losses that otherwise would not have happened. Such actions could nearly be argued as the equivalent of gambling or investing in risky stocks.

Due to the obvious risk and associated losses with market…… [read more]


Grameen Project (Bank) Essay

… Contrary to the positions espoused by most world economic and banking institutions, the Grameen project views population growth much differently. Yunus and the Grameen project do not necessarily view population growth as a negative factor in a nation or society's attempt to escape poverty and that, in fact, is some ways population growth can be a positive. Yunus points out that one of the side benefits of the Grameen project is that it serves to limit population growth as more and more women enter the workforce, become better educated, and recognize that they have a purpose other than reproduction, child care, and maintaining a home.

The Grameen project has been criticized for placing thousands of individuals in debt that they otherwise would not have had but such criticism ignores the fact that these same individuals were afforded an opportunity that they otherwise would not have had but for the Grameen project. Other bank and economic development institutions such as the World Bank and IMF have failed to connect with the poor at the grass roots level that the Grameen project has. Such organizations are bureaucratic top heavy and lack the capacity to connect with those who need the money. An important consideration is that the small loan amounts that the Grameen project handles not only minimize the risk to the lending institution but also are small enough so as to not discourage the borrower. The individuals involved in the operation of the Grameen project are encouraged by the employees of the project to believe that they are capable of repaying the loan and are carefully monitored to assist them in their efforts to succeed. Such support and encouragement has not historically been provided by other world economic relief and development organizations.

The success of the Grameen project has been remarkable provided its sphere of operation. It has provided encouragement in some of the world's poorest regions and has done so in a way that is truly unique.

Two Approaches to…… [read more]


Open System Theory Capstone Project

… PDA SIM I

The first simulation was run using the default values. During this simulation, after the first year the X5 had market saturation of 31%. This means that the X5 is in the growth phase of the market. This has lasted for one year and may last 1-2 more years. The X6 has a market saturation of 18%, heralding the beginning of the growth phase. The X7 has a market saturation of 3%, so the product is still in the introductory phase.

In subsequent years, the X5 remains in the growth phase for 2006 and 2007, but enters the mature phase in 2008 and 2009. The X6 lags the X5 by a year, growing through 2008 and entering maturity in 2009. The X7 never enters the growth phase during the length of the simulation. This hints at two key issues to address during this simulation. The first is going to be determining when to cut the X5 from the lineup. Under the default condition, the X5 makes money through 2008 but loses money in 2009. The second major issue is going to be to spur the X7 into the growth phase. Under the default scenario, the X 7 finishes the simulation with 2 million customers out of a total possible of 15 million. The other products reach saturation, so the best opportunity for growth beyond the default scenario lies with the X7.

The final score for the default simulation was a profit of $1.165 billion. The total profit declined every year, such that 2006 saw the highest profit at $505 million (43% of the final total). The following graph shows the profits for the different products for the four years:

This graph illustrates the strategic issues that are being faced. The X5 holds a slender profit in 2008 but loses money in 2009. Clearly, it will need to be cut by that year. Part of the problem for the X5 is that it has high fixed costs - $70 million per year -- which means that it will be profitable for less time than the other two products. The X7 begins to show strong profitability by 2009 even though it has not even entered the growth phase. In that year, it accounts for 75.8% of total profits. The implication for this is that the primary profit driver for the last year -- maybe the last two years -- is going to be the X7. The strategy undertaken should ensure that this product is well into the growth phase during these two years. It is also worth taking into consideration that while under normal circumstances a nice mellow growth trajectory for the X7 would be acceptable, in this scenario any unutilized potential X7 market is wasted -- you don't get to count 2010 results. It may be best, then, not to leave any sales on the table for this product.

That reality makes the X7 the most interesting case. This product has the highest margins, so has the most flexibility… [read more]


South Africa Is the Economic Leader Term Paper

… South Africa is the economic leader in the continent in terms of industrial output and mineral production (Brand South Africa 2012). It produces a large part of the electricity in Africa. Its natural resources are robust. Its financial, legal, communication,… [read more]


Behavioral Economics Many Academics Advocate Essay

… This is under the backdrop of increased profits and record earnings. Wells Fargo has now had 5 consecutive quarters of record earnings growth. However, due in part to regulation, the company is initiating cost cutting measures to insure the viability of the franchise. This again is a result of the economic forces prevailing in the market. As the psychology of the market changes, so too will the behavior of large and small businesses alike (Rabin, 1998). The same concepts apply to marketing and marketing related expense. Marketing particular for denigrated industries such as financial services will market themselves primarily to alter consumer sentiments. These sentiments through marketing can change the views of consumers as they establish a brand in their thoughts.

Conclusion

In conclusion, behavioral economics impacts decision making through emotions, prevailing sentiments, and the social aspect of business. These concepts all provide a means for business to obtain superior returns relative to their peers if they think rationally while ignoring emotions. However, many fortunes are lost due to the mass euphoria prevailing in the economy. Over priced mergers and acquisitions is just one method in which over optimism can cripple decision making. By realizing the prevailing sentiments in the markets management can make better informed financial decisions regarding their personal lives and business dealings.

References:

1) Shleifer, Andrei (1999). Inefficient Markets: An Introduction to Behavioral Finance. New York: Oxford University Press. ISBN…… [read more]


Asian Economic Crisis Term Paper

… "Suharto inaugurated an...[exemption] from sales tax and tariffs...the only firm to qualify was an obscure company owned by Suharto's youngest son." Such political interference insured that projects that wouldn't have been considered economically viable received more favorable consideration when a… [read more]


School Finance: Its Economics Term Paper

… They also need to explore the avenues for implementing the state-controlled full funded system. They need to increase the bases for revenue to increase the sales tax base for state and local governments. This is to include non-taxed goods and… [read more]


International Finance the Three Companies Term Paper

… Foreign exchange rate risk with Sony is therefore low.

There is some measure of economic risk, however. Though Japan is a wealthy and stable country, it is in an interesting macroeconomic position, which gives rise to some financial risk. The… [read more]


Economic Systems of South Korea Term Paper

… The government also fostered development by allowing South Korea to be a destination of several global manufacturers. The government also provided impulses for foreign and local investors through expansion of its network of free trade agreements. This brought change to… [read more]


Hurricane Katrina and Economic Implications Essay

… The reconstruction of homes took up much of the state's resources and although this was a slow process, it was the state's utmost priority. Since there were no businesses left in the states, there was no prospect for employment either… [read more]


Economic Advisor to a Less Developed Nation in Africa Essay

… Economic Advisor to a Less-Developed Naton in Africa

Economic Advisor to a Less-Developed Nation in Africa

For many years, experts in fiscal decentralization and local public finances have held the firm opinion that tax is close to an ideal tax for local government finance. The experts have presented compelling reasons why they hold this conviction. This study provides some recommendations to property taxes in Least Developing Country (LDC) on how they can achieve their objectives.

Property Tax

Role that I would assign to property taxes in this nation to achieve its objectives

LDC's should assign revenue sources, particularly taxes to each level of government. This will enable the country to align expenditure assignments with sufficient revenue thus raising capacity at every level of the government to finance the assigned responsibilities. LDC can raise adequate revenues through a wide range of revenue assignments even without any tax autonomy. This can be achieved through intergovernmental transfers. However, this approach raises concerns because if governments are allowed to carry out the transfers, the country will end up overspending on local services because they will fail to internalize the full cost of providing the benefits (Bahl, 2008).

Political accountability can be enhanced through the provision of sub-national governments with revenue autonomy. In this context, sub-national governments in LDC will be able to raise their own funds and face hard budget problems on their operating budgets.

In the perspective of LDCs, I would recommend that these governments raise their own revenue to finance expenditures at different margins. This will create a nexus link between the cost of providing the services and the benefits of locally provided services. This will encourage the nation to internalize the marginal costs of providing services thus avoiding overspending on them. Alternatively, once LDC accepts that the sub-national governments need at least some form of limited tax autonomy, they will be able to limit some ways of levying certain taxes such as introducing taxes on inter-jurisdictional trade (Bahl, 2008).

With the above general restrictions in place, any LDC in Africa can choose between a closed list of allowable taxes and an open list of taxes. Whichever approach the country adopts, they will enjoy significant benefits. In overall terms, if the country embraces a closed list of sub-national taxes, it may be able to avoid the introduction of highly distortionary taxes and nuisance taxes, which can easily impede on their economic development and growth. Alternatively adopting a closed lit of taxes may encourage for the cohabitation of tax bases by intergovernmental transfers and different levels of government designed to correct for vertical externalities (Bahl, 2008).

Property Tax 3

Two features of an economic system that I would recommend this country implement.

Unlimited Government Intervention: under such an economy, the government intervenes more in the country's businesses. This feature suggest that the nation will not laissez-faire meaning that the government will provide maximum support in economic matters of the country. The main function of…… [read more]


Crisis Economics by Nouriel Roubini Book Report

… ¶ … Crisis Economics" by Nouriel Roubini

In a word, Nouriel Roubini's book, Crisis Economics: A Crash Course in the Future of Finance, which was co-authored with Steven Mihm, is radical. The book is largely about the current fiscal crisis that the United States finds itself in. However, the author makes a point to spend a considerable greater amount of time tending to potential solutions -- and measures to ensure that similar fiscal crises cannot proceed -- than giving a history lesson about the critical time that was probably at its worse in 2008. In doing so, he suitably demonstrates that this crisis is not a "freak event" (Sunderland, 2010). The vast majority of the notions posed by Roubini are certainly radical by most conservative standards that still govern America -- and particularly those that are directly responsible for its pecuniary practices and economic regulations. Yet what makes Roubini's viewpoint and radicalism all the more intriguing is the fact that quite clearly, as a cursory review of the events of the past decade demonstrate, these are far from pedestrian times. It is this acknowledgement of the dire situation that America finds itself in, which is both acknowledged by the author and implicit in much of his monetary analysis and economic advice, that calls for (quite deservingly) radical measures to cure an intense financial dilemma.

Despite the fact that Roubini's book is far from a general history lesson that recaps the diverse collapse of industries that largely contributed to what is a global crisis, no amount of astute observation on the subject could completely avoid recounting some of the most salient of those details -- if for no other reason than to explain and contextualize many of the curative proposals Roubini advocates. In doing so, the author evinces a palpable congratulatory tone, perhaps because he was one of the few economists who presaged these financial conditions. For the most part, however, this tone and its deserved vantage point help to punctuate Roubini's perspectives with an air of authority that allows readers to trust some of his more unconventional notions. And it is ultimately this viewpoint of the author's that is at the heart of his beliefs for a completely revised financial system of running the U.S. economy, as the following quotation demonstrates.

The crisis was less a function of sub-prime mortgages than of a sub-prime financial system. Thanks to everything from warped compensation structures to corrupt ratings agencies, the global financial system rotted from the inside out. The financial crisis merely ripped the sleek and shiny skin off what had become, over the years, a gangrenous mess (Roubini & Mihm, 2010, p. 2).

It is with this unapologetic perspective of the fundamental processes that were responsible for the downfall of the real estate market, the collapse of Wall Street, and the great banking panic that had to be bailed out by the Feds that Boudini recounts these events, and ultimately proposes his solutions.

What is most interesting about Crisis Economics: A… [read more]


International Project Finance Essay

… Project Financing

International Project Finance: Commercial risk

Completion risk

Completion risk entails the concept of whether the project can be completed on the recommended period and within the set amount of budget

Completion risk is also known as Cost Overrun… [read more]


Shadow Banking System, Its Role Research Paper

… The shadow banking system, which is believed to be at least equal in size to the traditional banking system, also affects the money supply. If the shadow banking system slows down its lending, the money supply is likewise affected. With… [read more]


Finance and Financial System Research Paper

… Finance and Financial System

Overview of Financial System

Finance is a commercial study concerning management of money and other assets through crediting, banking and investing. It is an outgrowth of economics and accounting (Houston & Brigham, 2009, pg 4). The inter-relationship between finance and these two subjects has brought about financial economics and financial accounting. Another related field is corporate finance that deals with financial management, capital markets and investments.

The degree of importance in financial economics is significant especially in the business venture. Business firms and other institutions have made tremendous contributions in upgrading the economies of their respective countries. Finance is also vital in shaping efficient markets hypothesis (EMH) and behavioral finance among its practitioners (Houston & Brigham, 2009, pg 49). Moreover, the field creates a lot of slots for employment. It is, therefore, important to comprehend the knowledge of financial economics and how it affects vital decisions around individuals. Most importantly, financial role of decision making impacts more in behavioral finance.

Finance and Decision-making

The phenomenon of finance in decision-making is intuitive. Finance is a great contributor to business decision-making and the development of strategic marketing decisions. The planning and implementation of vital decisions is dependent on the availability of a budget. The budget poses as a financial tool under which the decision can be analyzed. The analysis, therefore, becomes a basis for decision making. Finance in decision making acts as insurance of the assessment being asserted. Any impending set back that might be experienced is refrained from causing termination of the decision.

Finance plays a considerable by providing a foundation on which rational policies are made by individuals, practitioners, managers and the business markets (Deaves & Ackert, 2009, pg 3). Finance achieves this by designing goals to be accomplished by the latter. Certainty and uncertainty are confronted at all angles in fully bombarding the decision being made. Models of finance such as demand and supply chains also contribute in decision-making. Individuals and corporate firms optimize their ability by presuming fundamental assumptions. Assumptions are based on the outcomes of the decision, maximization of the decision's utility and profit and deriving relevant information that the decision provides (Deaves & Ackert, 2009, pg 4).

Financial System

A financial system is crucial is ensuring a healthy economy in a nation by regulating rates of inflation, unemployment and growth. The study of finance is apprehensive in how the system organizes and channelizes flow of money through the lender-borrower relationship. This relationship is a link up due to the difference in positions of some people or firms amongst themselves (Burton & Brown, 2009, pg 7).…… [read more]


GDP and Economic Growth in Ireland Term Paper

… Ireland's Economy

Ireland's banking system which for over a decade was a financial global powerhouse, suffered an ignominious fate when Irish central bank regulators proposed "to nationalize its banking sector after its government uncovered a €24 billion ($33.9 billion) capital… [read more]


Economic Crisis in Europe Article Review

… By reducing the amount of decisions made by human operators, the risk for errors in inputting or analyzing information is greatly reduced. Automating audit systems also helps organizations determine if its processes are effective by identifying transactions outside of the… [read more]


1980s Affecting Corporate Finance Article Review

… Gongloff (2010) tried to predict the future of investors' desire for corporate debt by mentioning that a double-dip recession would imply more defaults and scare investors away from corporate bonds. By contrast, economic recovery could lead to higher interest rates and an invigorated stock market, luring investors back into the purchase of stocks and weakening demand for bonds. The latter scenario seems more likely. Despite the huge exodus of money from stocks since the summer of 2010, it may be a good idea to own stocks. Corporate earnings are setting record levels, due to increases in productivity and businesses in foreign markets, and corporate profits increase stock prices. Yet for institutional investors, which have superseded individual investors in stock markets, the only choice is not bonds vs. stocks in American corporations. There is the option of investing in stocks of foreign companies. For example, American investors have been heavily involved in Korean stocks.

In sum, developments in the 1980s like deregulation and internationalization motivated corporations to bypass commercial banks and seek financing in capital markets. This was true mainly for large corporations with good credit ratings. But even smaller firms entered the financial markets in a significant way via the issuing of junk bonds. The predominance of financial markets has continued up to 2010 with no strong indications of abating. Today's low interest rates and the hampered stock market have strengthened the old trend toward financial markets as a source of external financing for corporations. Yet some analysts feel that the huge supply of bonds will eventually saturate the market. Moreover, high levels of profits by many American corporations and expected economic recovery in the U.S. are signs that the bond market will eventually subside as investment in stocks becomes a more desirable option, at least in the medium term.

Financial Markets and Corporate Finance

Reference

Gongloff, M.(2010, September 8). Blue-Chip Borrowers Issue Debt in Droves Wall Street

Journal (Online). Retrieved from http://proquest.umi.com.ezproxy.fiu.edu/pqdweb?index=0&did=2133668831&SrchMode=2&sid=2&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1290691705&clientId=20175… [read more]


Economic Crisis 2007-2010 Research Paper

… Irrational Exuberance: The Economic Crisis of 2007-2009

According to the National Bureau of Economic Research, what will no doubt become known as first Great Recession of the 21st century began in 2007. "The NBER said that the deterioration in the… [read more]


International Politics Economics Essay

… International Political Economics

The international financial system has changed significantly over the past thirty years. Among the most significant changes, the Bretton Woods system collapsed, regulations regarding transborder capital flows have eased and the Euro was created. Each of these major changes has contributed significantly to the global financial system we have today.

The Bretton Woods system was devised in the wake of the Second World War and was based on pegging the world's major currencies to the value of gold. The pegs were to be within 1%. By 1968, Bretton Woods had been adapted to a floating rate system. The U.S. dollar, the reserve currency under Bretton Woods, was unable to maintain its peg. The U.S. dollar became overvalued in relation to gold.

The Smithsonian Agreement of 1971 ended the gold pegs for good. The U.S. had unilaterally ended the gold standard the year prior. This agreement set the stage for the development of international currency markets. The first stage, however, saw exchange rates negotiated, rather than be backed by the value of silver or gold (Investopedia, 2009).

Once the free float of major currencies was established, the next step in the development of global financial markets was the freeing of global financial flows. International trade agreements have been signed at an increasingly rapid pace since the U.S. And Canada signed the first major free trade act. While the flow of goods has improved as a result of these agreements, the flow of capital has freed the most. This impacts the world's financial system in a number of ways. The first is that it increases the efficiency of resource allocation, but in doing so it also increases the volatility of global financial markets (Eichengreen, 2004). Speculation, both directly on currency markets and indirectly with foreign investment, contributes to this volatility.

Another major change in the global finance system is the creation of the Euro. When the U.S. dollar began to lose prominence in the 1970s, the other major world currencies were all in smaller economies. They were important, but never a threat to supercede the preeminence of the dollar. The euro absorbed some of these powerful currencies, such as the mark and the franc, and became a world currency in its own right. The euro provides global financial markets a realistic, viable alternative to the dollar, the first real one since the pound prior to World War Two (Pollard, 2001).

As yet, the euro has not superceded the dollar as the primary medium of exchange in the global financial markets. That it provides a viable second option is of comfort to investors, however. It provides stability to the global financial system as well, since investors need not focus exclusively on the dollar as a safe haven. They can move between the euro and the dollar, which increases the efficiency of the global financial markets and helps to normalize the price of both of these currencies.

The final major change in the global financial markets is the increase in the… [read more]


Venezuelan Banking Sector - Bbva Banco Provincial Research Paper

… ¶ … Venezuelan Banking Sector - BBVA Banco Provincial

General country background

Venezuela is the 31st largest economy of the globe in terms of measured GDP. For 2007, the country's gross domestic product has been estimated at a total value… [read more]


Japan's Banking Crisis Term Paper

… Japan's Banking Crisis

Rubber Rules

Origins

Same Story... Different Setting

Relating Reasons

More Nets More

Accepting Responsibility

Sewing Up the Wounds

Rubber Rules

Money changes all the iron rules into rubber bands."

Kapuscinsk)

Japan's current, positive financial movements are touted… [read more]


Commercial Banks Went Through Various Term Paper

… Affected companies, such as Enron and Kmart, have kept intense focus on cutting costs so much as neglecting other duties, such as new equipment purchases or building new facilities, because of this slump in commercial lending (Wet Feet). The largest number of bankruptcies occurred last year and seemed to have put an end to the mortgage lending boom, cutting lending to a half this year. Job seekers of bank posts must now be aware that opportunities are increasingly coming from the biggest commercial banks, like Citibank, Bank of America, Wells Fargo, Wachovia and JP Morgan Chase, which are determined to build national, as well as international, banking operations. These institutions, however, not only have extended their consumer banking operations but have also strengthened investment-banking and asset-management capabilities, among others (Wet Feet).

A few Wall Street firms have traditionally led in the fields of securities and investments, but the easing of recent federal regulations compelled the biggest commercial banks, such as BA, Citibank and JP Morgan Chase, to add investment banking and asset management into their portfolios. They now offer opportunities in corporate finance, securities underwriting and asset management (Wet Feet). Taking advantage of the development, non-bank entities have increasingly offered opportunities to people interested in financial services and these venture-takers included credit card companies, like American Express, MasterCard, and Visa, credit card issuers like Capital One and MBNA and credit reporting agencies, such as Experian (Wet Feet).

While there are fewer job opportunities for bank tellers and back-office clerks, positions for financial analysts, financial advisors and trust officers grow and enrich. Furthermore, these banks now sell a variety of financial products and services they could not before the repeal of the Glass Seagall Act. At present, they compete with traditional lending businesses, which means greater opportunity for financial services sale representatives but less opportunity for loan officers and the rest with limited knowledge of the full range of financial products these banks sell now (Wet Feet). Along with these, high tech positions are on the upward trend, as processes and operations become more and more automated and companies' networks correspondingly increase.

Bibliography

Hester, Donald. U.S. Banking in the Last Fifty Years - Growth and Adaptation, 2002. http://www.ssc.wisc.edu/econ/archive/wp2002-19.pdf

Wet Feet. Commercial Banking, an Industry Overview. Wetfeet.com, Inc., 2004. http://www.wetfeet.com/asp/industryprofiles_overview.asp?industrypr=7… [read more]


Banking and Finance Law Term Paper

… Mishkin)

The International Bank for Reconstruction and Development (World Bank) was organized in 1945 to make loans both to governments and to private investors. The discharge of debts between nations has been clarified and uncomplicated through the International Monetary Fund (IMF), which also provides members with technical assistance in international banking. The former European Monetary Agreement also made possible the rapid discharge of debts and balance of payments obligations between nations. The European Central Bank (see European Monetary System) was established in 1998 to help formulate the joint monetary policy of those European Union nations adopting a single currency. (Blinder)

Banking in its simplest form was practiced by the ancient temples of Egypt, Babylonia, and Greece, which loaned at high rates of interest the gold and silver deposited for safekeeping. Private banking existed by 600 B.C. And was considerably developed by the Greeks, Romans, and Byzantines. (Binhammer) Medieval banking was dominated by the Jewish and Levantines because of the strictures of the Christian Church against interest and because many other occupations were largely closed to Jews. "The forerunners of modern banks were frequently chartered for a specific purpose, e.g., the Bank of Venice (1171) and the Bank of England (1694), in connection with loans to the government; the Bank of Amsterdam (1609), to receive deposits of gold and silver." (Granger) Banking developed rapidly throughout the 18th and 19th centuries, accompanying the expansion of industry and trade, with each nation evolving the distinctive forms peculiar to its economic and social life.

Since the establishment of the Federal Reserve system, federal banking legislation has been limited largely to detailed amendments to the National Bank and Federal Reserve acts. The Glass-Steagall Act of 1932 and the Banking Act of 1933 together formed an extensive reform measure designed to correct the abuses that had led to numerous bank crises in the years following the stock market crash of 1929. The Glass-Steagall Act prohibited commercial banks from involvement in the securities and insurance businesses. The Banking Act strengthened the powers of supervisory authorities, increased controls over the volume and use of credit, and provided for the insurance of bank deposits under the Federal Deposit Insurance Corporation (FDIC). The Banking Act of 1935 strengthened the powers of the Federal Reserve Board of Governors in the field of credit management, tightened existing restrictions on banks engaging in certain activities, and enlarged the supervisory powers of the FDIC. (Mishkin)

Several deregulatory moves made by the federal government in the 1980s diminished the distinctions among various financial institutions in… [read more]


Urban Economics Research Proposal

… Urban Economics

It would be hard to find a government official who did not stress the importance of economic development -- voters like to hear about economic growth because they like jobs and security -- but there is no magic… [read more]


Fiscal and Monetary Issues Term Paper

… This criticism contradicts some elements of institutionalism, which states that human interactions require rules of cognition and communication, which involve the use of language. According to this approach, language is an institution in itself. This approach can work to solve… [read more]


Finance in Public Term Paper

… Finance

In public finance, there are a number of ideas that are used to discuss specific concepts and strategies. This helps administrators to comprehend what is happening and the long-term effects of various events on their fiscal position. To fully understand how they are applied requires carefully examining the fundamentals of public finance, the euimarginal principle, pareto criterion, the justification for government action, public choice and how these topics relate to the budgetary process. Together, these elements will highlight the different strategies that are utilized for discussing various ideas and how they are impacting public entities. (Ekstedt, 2012) (Holzer, 2011)

The fundamental principles of public finance

The fundamental principles of public finance are to collect enough taxes and utilize them to effectively provide numerous services everyone is demanding. This is focused on three different areas to achieve these larger objectives. The most notable include: the efficient allocation of resources, the distribution of income and macroeconomic stability. These factors work in conjunction with each other to ensure that the government is meeting the needs of the people. (Ekstedt, 2012) (Holzer, 2011)

The efficient allocation of resources; is when administrators are making sure that the government is providing services in areas where they are needed the most and reducing any kind of waste. The distribution of income is where local officials will supply resources to ensure that the community can address the challenges impacting various segments (such as: the homeless and low income demographics). During this process, they are focused on meeting the objectives of the needy and reducing the negative impact of specific events on them. Macroeconomic stability is when the government is working to ensure that the economy functions properly by attracting jobs and local businesses to the area. These elements are designed to ensure that needs of the community is met and that the region can experience sustainable economic growth over the long-term. (Ekstedt, 2012) (Holzer, 2011)

The equimarginal principle, pareto criterion and the justification for government action

The equimarginal principle is a tool that is used by officials to examine the different alternatives and courses of action. This helps them to identify the best approaches for allocating various resources in the process and the lasting impact it will have on the community. The pareto criterion is used to evaluate the needs of voters and what issues are most important to them. This assists administrators in determining what areas should receive the most critical amounts of attention and resources. The justification for government action is when elected officials will demonstrate how their policies and…… [read more]


Globalization, if Explained in Economic Terms Term Paper

… Globalization, if explained in economic terms, is the ever-increasing inter-dependence of the national economies of countries all over the world on the cross-border movement of goods, services, technology, capital and labor (Warsh and Davis). The influx of foreign resources into… [read more]


US Financial System Term Paper

… USA Financial System

financial system is one of the most complex systems in the world. There are several environmental factors which have an impact on the U.S. financial system such as the economy and federal regulation. The paper will look at the impact of financial market on the economy, businesses and individuals. It will also explain the role of Federal Reserve clearly indicating its effectiveness in today's economic environment. It will further look at the influence of interest rates on the U.S. And global financial environment. Finally, it will look at the impact of exchange rates on a business decision to operate in foreign markets.

U.S financial market

financial market comprises of financial transactions of any type that help in growth of businesses, and through which investors can make money. The financial markets affect the economy through stock and investing in stock. When the stocks of corporations are sold to investors, the companies will raise a lot of money, and it is the investors profits when a company increases its earning that keep the U.S. economy growing. Mutual funds enable the buying of a lot of stock at once hence creating a reduction in the volatility of the stock market resulting to a calming effect to the U.S. economy. The financial market affects businesses in that businesses can sell out their stock leading to an increase in investment in the business. This increase in investment means that the businesses will realize more profits. Individuals who have invested in shares will benefit if the company which they own shares is doing well. On the other hand they will be at a loss if the company is performing badly and might end up selling their shares. If share prices are falling, businesses will lack the ability to raise finances in the stock market (Amadeo, 2010).

The U.S. Federal Reserve

The U.S. Federal Reserve System is a central banking system found in the United States and was created in 1913.The structure of the Federal Reserve System comprises of a Board of governors appointed by the president. The role of the board of governors is the determination of reserve requirements within the statutory limits of member banks .They are also in charge of determining the discount rates that have been established by Federal Reserve banks. They review budgets that have been put in place by the reserve banks. The Federal Reserve System has a chairman who is the head of the board of governors and appointed by the president. The chairman is one of the most powerful people as they are at the top of the central banking authority. He is charge of directing monetary policies, and is the person that determines other activities that the Federal Reserve undertakes. He is also the head of the federal open market committee which is in charge of open market operations.

The Federal Reserve System is very effective in today's economic environment as it conducts the monetary policy of the United States, provides and maintains efficient and… [read more]


Goals of a Monetary Policy Term Paper

… Which in return lead towards maximization of output. And this maximization of output lead towards high rates of employment. The high rates of employment in return elevate the living standards to a higher rate. (Cambazo-lu & Karaalp, 2012)

In the… [read more]


Economic Systems Term Paper

… Resource allocation issues in market or free enterprise economic system are addressed without any governmental intervention and determined by demand, supply, and competition ("Economic Systems" p.1). Furthermore these issues are handled by the unfettered interaction of individuals and firms in… [read more]


Economics in the Mexican American Culture Essay

… Mexican Economy

Economics in the Mexican-American culture

Economics in the Mexican -American culture

As traced since the treaty of Guadalupe Hidalgo for instance 1940s to mid 1970s, the economy of Mexico experienced a strong average growth of more than 6%, single digit inflation, as well as comparatively low external indebtedness. However before the end of 1970s, this was no longer the case for expansionary government policies turned to generate higher inflation in addition to relentless external payments problems and continue to fail to facilitate sustained growth. Because of the government spending, revenues became outpaced facilitating steep budget deficits and raising debts from external forces. Moreover, low real interest rates made domestic saving go down.

There was a signal from the 1976, financial and economic crisis indicating the importance of addressing the fundamental problems based on the economy, but due to discoveries of petroleum incentives for reform became reduced as well as postponing the inevitable day of reckoning. In the late 1970s, the government was able to expand its debt-financed spending hoping for a higher low interests and high oil revenue. An aggravated balance of payments problem was created, hence undermining the confidence of private sector and encouraging capital flight.

Meanwhile, as the struggle by the Mexican government to improve its status within the financial community of the world, assisted by the United States, the situation that they experienced at home remained unsettled. Even though in 1983 after GNP fell by 5% making the year 1984 of a brief optimism for the Mexican, the year that followed the economy contracted by 1% fading any hopes of growth.

The Mexican economy has continued to be depressed with event and other factors such as: the major natural disaster. The two major earthquakes resulted to lose of lives between 5,000 and 10,000 people, and 300,000 were left homeless. Heavy burden was placed on an already struggling nation as they were to incur the cost of reconstruction and cost of relief, (Earthy Family, 2013). Another factor was consistence fall in prices of oil as well as an ever increasing high level of foreign debt service that forced a new round of austerity measures. The effect of De la Madrid was on the federal budget after cutting additional U.S.$465 million by lowering government investments and subsidies, creating a partial freeze on the federal hiring as well as selling more than 200 parastatals owned by state. This new-tightening measures by the President resulted to an annual fall of inflation in 1982 to 60% from 100%. Again the public sector deficit had gone down to 6.9% from 13.6% of gross domestic product.

In 1986 after De la Madrid addressed the Nation declaring that their austerity effort was permanent and, vowing never again will there be deviation from the economic course, there had been precedent-setting agreement with the IMF involving new loans to Mexico tied to fluctuations within the world price of crude oil. However the crisis did not seem to vanish.

Mexico relation with United States can be… [read more]


Shadow Banking on the International Term Paper

… These measures are instrumental in leading towards more prudent risk management of entity, reduction of any implicit "government safety net" linked with highly leveraged funds and mitigate pro-cyclicality of market movements occurring mostly in the cases of market distress. However, its potential disadvantages comprise of potential difficulties encountered in the calibration of limits for different investment strategies, which implies that some strategies are considered "efficient" only if they operate on highly leveraged basis. Moreover, impediments to a fund's portfolio investment flexibility tend to be another disadvantage associated with it. Thus, the type of entity under consideration and the particular features linked to it must be considered for tailoring this type of tool. Such type of tool is considered suitable for hedged funds (FSB, 2012f).

References

Pozsar, Z. et al. (2012). Shadow Banking. Federal Reserve Bank of New York, Staff Reports. Taken from: http://www.newyorkfed.org/research/staff_reports/sr458.pdf

FSB. (2012a). Strengthening Oversight and Regulation of Shadow Banking: A Policy Framework for Addressing Shadow Banking Risks in Securities Lending and Repos. Taken from: http://www.financialstabilityboard.org/publications/r_121118b.pdf

FSB. (2012b). FSB Publishes Initial Integrated Set of Recommendations to Strengthen Oversight and Regulation of Shadow Banking. Taken from: http://www.financialstabilityboard.org/press/pr_121118.pdf

FSB. (2012c). FSB Publishes Initial Integrated Set of Recommendations to Strengthen Oversight and Regulation of Shadow Banking. Taken from: http://www.financialstabilityboard.org/publications/r_121118c.pdf

FSB. (2012d). FSB Publishes Initial Integrated Set of Recommendations to Strengthen Oversight and Regulation of Shadow Banking. Taken from: http://www.financialstabilityboard.org/publications/r_121118b.pdf

FSB. (2012e). FSB Publishes Initial Integrated Set of Recommendations to Strengthen Oversight and Regulation of Shadow Banking. Taken from: http://www.financialstabilityboard.org/publications/r_121118a.pdf

FSB. (2012f). Consultative Document Strengthening Oversight and Regulation of Shadow Banking A Policy Framework for Strengthening Oversight and Regulation of Shadow Banking Entities. Taken from:

http://www.financialstabilityboard.org/publications/c_130129yy.pdf… [read more]


Financial Management Both Economics and Accounting Essay

… Financial Management

Both economics and accounting are important to the field of finance. There is a degree of interrelation between the three, and the skills and knowledge of each can provide valuable insight into the other. Economics is the study of economic choices and their effects (Simpson, 2011). When performing financial tasks, an understanding of basic economic terms and concepts can improve the output of financial analysis. A simple example would be in performing capital budgeting, such as a net present value analysis. Making revenue projections is easier when one can translate assessments of future economic projections into demand conditions. Looking at data from the Congressional Budget Office, for example, can help financial managers to make demand estimates for a project, and those estimates will be improved if the economic forecasts are clearly understood.

Economics is also valuable because some of the basic concepts relate to financial decision making. In microeconomics, a lot of study in done on choices, and economic decision-making. Concepts like price elasticity of demand contribute directly to the work that financial managers do. In addition, financial managers benefit from understanding the ramifications of their own choices -- for example the tradeoffs inherent in things like capital structure decisions. The concepts that are used when learning and applying these financial management concepts derive directly from the field of economics, so a solid grounding in economic concepts and principles will help the financial manager to make better decisions based on a more sophisticated understanding of these principles.

Accounting is also important to the field of finance. Many financial decisions at the firm level relate directly to accounting concepts. For example, capital structure decisions are based directly on balance sheet information concerning the liabilities and equity of the company. This balance sheet information is used in things like the weighted average cost of capital as well. Another example would be with the net present value calculation, where cash flows are critical. This is based loosely…… [read more]


George Magnus Is a Leading Term Paper

… Even though, the crisis in 2008 didn't led to a collapse of the capitalism. The way Marx analyzed the misunderstandings between the labor and capital and it causing political and economical unrest politically. Where Smith was sure that public institutions… [read more]


European Economic Crisis -- Greek Term Paper

… Recent OECD data show that Greece is among the least recipient of foreign direct investment capital in Europe. The cold attitude of Greece in its business dealings with countries all over the world reduces their chances of receiving foreign aid… [read more]


Shareholder Capitalism as a Model Research Paper

… The opportunity to easily remove equity made a wealth effect-driven increase in consumer consumption, raising housing as well as retail sectors whilst producing increasingly risky amounts of household bill (Greenspan and Kennedy 2008). As soon as house costs inescapably corrected… [read more]


International Financial Crises Research Paper

… In the beginning, the Bank of Thailand tried to curb the capital inflows by buying back the baht they sold in foreign exchange markets by issuing bonds (Krug, 2000). The problem was that this activity drove the local interest rates… [read more]


China's Economic Policy Research Paper

… China's Economic Policy

The People's Republic of China has seen a number of different economic policies in its history. The PRC began with a Communist ideology, something that was reflected in early policies, which were laid out in grand, nation-wide plans. The first major plan came in the form of the Great Leap Forward. This period saw China attempt to move from a primarily agricultural economy to a more industrial one. Initiated in 1957, the Great Leap Forward saw a number of reforms. The first was the collectivization of agriculture, in line with Communist economic philosophy. The second component of the Great Leap Forward was extensive government spending on the development of heavy industry. This spending rose from 38% in 1956 to 56% in 1958. In addition, the people were enlisted to help with the industrialization process, as backyard furnaces were built, theoretically to produce steel but in reality to produce pig iron. Over 100 million peasants were enlisted to build water conservation works (Harms, 1996).

The end result of the Great Leap Forward was famine and massive social upheaval as people began to move around the country in search of food. A reduction in central control over agriculture followed the Great Leap but China's economy developed little, while the central government imposed its will on social policy via the Cultural Revolution.

Following's Mao's death in 1976, a power struggle followed and Deng Xiaoping eventually came to power. He initiated the reforms that started China on the current economic path. Among the reforms that Deng introduced was the introduction of Special Economic Zones (SEZs) to foster trade. The central government maintained control over the process of opening up China's markets. Reforms were sweeping, involving issues of taxation, finance, trade, price…… [read more]


Crisis as an Inevitable Feature of Capitalism Essay

… Economics

Crisis as an Inevitable Feature of Capitalism

What were the immediate and long-term causes of the current political economic crisis?

Today's economic and financial crisis began in the rich world particularly in the U.S.A. It has been referred to… [read more]


Economic Business Policy Case Study

… Organization Behavior

Economic Business Policy

Economic Policy

Economic Business Policy

OPTIONS

Government can have various options to make welfare for the general public of its country. The most important step is to improve the industrial infrastructure and bring efficiency in… [read more]


African Public Finance the Heritage Foundation Released Essay

… African Public Finance

The Heritage Foundation released its 2012 annual Economic Freedom Index which measures "10 benchmarks that gauge the economic success of 184 countries around the world" (Heritage.org. About. 2012. PP. 1 ). Two direct neighbors in Sub-Saharan Africa: Botswana and Zimbabwe demonstrate the extent to which government policy can engender or strangle: economic activity, capital formation, national savings, infrastructure development, and foreign direct investment. Botswana is a marker for economic freedom and strong growth with the "second best score (69.6) out of 46 countries in the Sub-Saharan Africa region…and a world rank of 33" (Heritage.org. Botswana. 2012. PP. 1). Contrastly, Zimbabwe's overall score of 26.3 leaves the nation last in the "46 countries in the Sub-Saharan Africa region…and 178th in world ranking (Heritage.org. Zimbabwe. 2012. PP. 1). This data leads to significant conclusions regarding policy choices for other African nations in specific areas of: property taxation, tax structure, and protection of property rights.

Overview

With a developed and thriving economy based on market orientations, open and free trade, limited government, and significant property right protections Botswana has a five-year annual growth rate of 3.5%, GDP of 28.5 billion and $15,849 per capita, public debt at 13.2% of GDP, and a stable low inflation rate (Heritage.org. Botswana. 2012. PP. 1-2). Zimbabwe conversely has a negative five-year growth rate of 2.4%, GDP of 5.5 billion and $434 per capita, public debt at 56.2% of GDP, and continues to suffer from a decade long bout with pernicious hyperinflation (Heritage.org. Zimbabwe. 2012. PP. 1-2). While Botswana is marked with social, political, and economic stability; Zimbabwe under the regime of Robert Mugabe has devolved from "a diversified economy with a well-developed infrastructure, and an advanced financial sector…to an economic and social destruction characterized by instability and volatility" (Heritage.org. Zimbabwe. 2012. PP. 2). African nations surveying these economic divergences can discern useful lessons on creating a balance between private and public sector roles within a greater framework of economic philosophy and governance.

Property Tax

Developing economies around the globe must embrace the importance of a strong and vital infrastructure; not simply the roads, bridges, and buildings but a broader expanse to include: education, health care, and competitive industry. These essential elements come from considerable private sector influence however; the role of government is not to be understated in providing the guiding direction in developing and maintaining institutions and infrastructure. To do so revenue must be raised from the private economy through taxation; sufficient to collect requisite funds but not to create obturations to growth. Much of the Sub-Saharan continent suffers from inadequate infrastructure primarily because of lack of private…… [read more]


Economic Benefits of Buy a House Get a Green Card Research Proposal

… ¶ … Buy a House, Get a Green Card

Fundamental objective of this proposal is to present the economic benefits of "Buy a House, Get a Green Card." Implementation of the proposal could serve as the economic solution to the… [read more]


Forces Leading to Changes Literature Review Chapter

… Many large banks in the U.S. led to huge government bailouts. This happened first in the year 2008 when there was a huge credit crunch and a global banking crisis. Governments of several countries around the world were forced to… [read more]


Corporate Finance Potential Impacts Research Paper

… Present and Future Values of Annuities

An annuity is the purchase of a regular income with a capital lump sum. The rates given for annuities reflect market conditions. The firm selling the annuity will invest the lump sum with the aim of making a return greater than the regular payments they make to the annuity holder. If interest rates are low the returns that the firm can gain are low, when interest rates increase the annuity rates will increase eventually, although there is likely to be a lag. This relationship where annuity rates change when interest rates change may be observed in the past performance of annuities. In figures from the UK

, looking at pension annuities, the respected firm William Burrows Annuities compares annuity rates in April 2008, when interest rates were 5% to April 2011 where interest rates were 0.5% (Currie, 2011). Using the benchmark of a £100,000 capital lump sum the annuity given in 2008 would have been £6,547 per annum, this amount decreases in 2011 to £5,943 per annum (Currie, 2011).

The calculation of the present value of an annuity is complex, as this involves discounting the future cash flows into today's value. If interest rates increase the cash flow from the annuity increases (increasing the future value). The present value will depend on inflation, inflation may increase, but if the economy is managed correctly inflation should be held at a rate lower than the proportional increase in interest rates. Theoretically, the present value may also increase, but this will be less pronounced compared to the future value and is dependant on many divergent factors, apart from inflation which may include diverse issues which are not directly related to interest rates, such as the cost of labor and the cost of oil.

Impact on NPV Calculations

Net present value calculations look at the value of an investment in the future by taking the futures cash flows and discounting them into today's value by allowing for the time value of money. The discount rate may be based on the expected rate of inflation; however firms will often base the discount rate on their actual cost of capital (Drake and Fabozzi, 2009). As interest rates increase the cost of capital (which is discussed in the next section) will also increase. Assuming the same cash flows the following tables demonstrate the difference that that an increase in interest rates will have on the NPV. The example of a five-year investment of $10,000 creating an annual return of $3,500 may be used. In table 2 the discount rate… [read more]


British Age of Austerity Essay

… In conclusion, by embarking on a policy to cut expenses and thereby decrease the deficit, the Cameron government is on sound economic footing in regards to theory as well as historical experience.

Sources:

Bartlett, Bruce (2004). Brief Analysis No. 483. National Center for Policy Analysis.

Burnham, James B. (2003). Why Ireland Boomed. The Independent Review, Vol. 7, No. 4-537 -- 556

Gwartney, James, Stroup, Richard L. & Lee, Dwight R. (2005). Common Sense Economics. New York, St. Martin's Press

Hauptmeier, Sebastian, Heipertz, Martin & Schuknecht, Ludger (2006). Expenditure Reform in Industrialized Countries: A Case Study Approach. European Central Bank Working Paper No. 634.

Laffer, a. (1986). The Financial Analyst's Guide to Fiscal Policy. New York, Greenwood Press.

Laffer, Arthur B. & Moore, Stephen (24 October 2000). To soak the rich, cut their tax rates. Wall Street Journal p. A26.

Luskin, Donald (2005, July 12). Smells like victory. National Review. 8.

McCoy, Kevin (2006, October 2). Income Tax Cuts benefit all Payers. USA Today. C8.

Mitchell, Daniel J. (2006, October). Fiscal policy lessons from Europe. Heritage Foundation Backgrounder #1979.

Moore, Stephen (2005, June 19). Real tax cuts have curves. Wall Street Journal. A16.

Schettkat, Ronald (2003, January). Differences in U.S. -- German Time Allocation: Why Do Americans Work Longer Hours Than Germans? Institute for the Study of Labor, Discussion Paper No. 697.

Stelzer, Irwin M. (2003, September 16). European Holiday. The Weekly Standard.

Sowell, Thomas (2004). Basic Economics: A Citizen's Guide to the Economy. New York, Basic Books.

Sowell, Thomas (2006, June 2). The "Trickle Down" Left: Preserving a Vision. Capitalism Magazine.

Williams, Walter E. (2006, January 11). Tax cut beneficiaries. Capitalism Magazine.

Congressional Budget Office (2005, December). The long-term budget outlook.

Eurostat…… [read more]


Economics as My Intended Field of Study Application Essay

… Economics as My Intended Field of Study

My intended major is Economics, a subject in which I developed an interest in two very different ways. At the level of microeconomics, I have first-hand experience with the challenges of surviving alone in the United States as a self-dependent international student. On one hand, the U.S. offers many potential opportunities; on the other hand, economic survival for working students requires very responsible management of finances and resources. On the level of macroeconomics, I was both alarmed and fascinated by the manner in which the entire U.S. economy nearly collapsed in 2008, just as I was beginning to settle into life in the U.S. In addition to issues of the highly complex interrelationships among and between the business, investment banking, and housing sectors, the situation also highlighted important ethical issues that obviously must be addressed to prevent repeated economic catastrophes.

As a student of economics, I hope to develop a basic understanding of the classic fundamental principles in the field. However, I also hope to study some of the broader ways that economic issues affect and even shape contemporary human societies. Since coming to the U.S., I have learned that the American consumer economy is much more complex than I realized, especially in connection with the extent of consumer dependence on credit to fund higher lifestyles than…… [read more]


Decline of Upward Economic and Social Mobility Term Paper

… DECLINE OF UPWARD ECONOMIC AND SOCIAL MOBILITY IN THE U.S.

One of the most fundamental and defining elements of the American way of life in the modern age has been the fact that economic and social mobility have always been… [read more]


Career Objectives Pursuing Admission Essay

… By persevering, I got the satisfaction of passing those classes, and being able to move on to the next challenge. I know that my chosen career involves a fair amount of number crunching, so I feel good about having mastered the basic skills that I will need and use frequently. My confidence has grown, and that comes with having a solid foundation to build on.

Now I am ready to study at the Masters degree level. I am looking forward to studying financial analysis, accounting, economic forecasting, investment analysis, international finance, and many other topics that require math skills. Learning more about all these subjects is important. I particularly want to understand how the economy works, especially since there are everyday reminders that come with living during a recession. But challenges bring opportunities, and that is one of the benefits of having an MS in Finance. I will have the educational tools to solve problems and create opportunities for others.

Besides letting me solve business problems, a career in banking will enable me to make a difference, by providing banking services. My goal is to have a job that lets me contribute to society, and the world of commercial banking will give me that opportunity. Also important, because I like working with people, I look forward to becoming a banking analyst and working with entrepreneurs and corporate clients. An MS in Finance puts me in position to make all this happen.

In the banking industry in particular, there is an advantage to having an advanced degree. As a senior banking analyst, having an MS in Finance will allow me to compete for the jobs that I am interested in. Having an MS in Finance also means having the ability to qualify for a better position, one that is more senior with more challenges and responsibility, and hopefully with better pay, at least in the long run.

After taking a lot of time to consider my career objectives, I must say that the current economy has also influenced my thinking. I want to contribute to economic growth, and having an MS in Finance will go a long way toward enabling that dream. Whatever the causes of recessions and economic slowdowns -- and I do have my theories about how the country and the world have gotten into such a mess -- I want to personally make a difference in improving the economy, both locally and globally. Becoming a banking analyst will help me to realize that goal as well.

Attaining an MS and Finance and going on to a career as a banking analyst will further my career objectives and personal goals. These accomplishments will also put me in a position to realize another long-term goal, making a contribution to society. For these reasons I believe I should be accepted into your program. I am truly excited at…… [read more]


Banking Regulation Captain Essay

… If there had been (for example) no Office of Thrifty Supervision (which was responsible for allowing WaMu to make home loans with a giddy disregard for economic realities), at least many individuals would have taken it upon themselves to pursue… [read more]


Economic Crises Term Paper

… Economic Crash Through the Works of Wessel, Lewis and Sorkin

Michael Lewis gives an excellent first impression of Wall Street in the 80s with an outsider's introduction to the inside world of stocks, bonds, and debt reshuffling. Lewis' The Big… [read more]


What Are the Social Impacts on People's Daily Life of the Current Economic Crisis? Research Paper

… Economic Crisis

The Origin and Impact of the 2008 Economic Crisis

The economic crisis that hit in 2008 had its beginnings nearly thirty years ago under President Ronald Reagan. It was Reagan who ushered in the era of Wall Street… [read more]

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