"Economics / Finance / Banking" Essays

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Finance in Public Term Paper

Term Paper  |  3 pages (851 words)
Style: APA  |  Bibliography Sources: 2



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

Term Paper  |  5 pages (1,806 words)
Bibliography Sources: 5


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 local economies may have an adaptation effect on the native / local residents of the country. For example, the developing… [read more]

Goals of a Monetary Policy Term Paper

Term Paper  |  12 pages (4,084 words)
Bibliography Sources: 18


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 short run, countries may face various phases of boom and recessions. The central bank can control the rate of inflation… [read more]

Shadow Banking on the International Term Paper

Term Paper  |  4 pages (1,641 words)
Style: Chicago  |  Bibliography Sources: 10


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).


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]

George Magnus Is a Leading Term Paper

Term Paper  |  10 pages (3,253 words)
Bibliography Sources: 10


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 were necessary to good working economy, Magnus didn't agree with notion. As mentioned earlier, Magnus is more inclined towards Marx's… [read more]

European Economic Crisis -- Greek Term Paper

Term Paper  |  15 pages (4,697 words)
Bibliography Sources: 15


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 for paying out the debts (Abboushi 2012).

Inefficiencies in the Public Sector

The real appreciation of wages in the public… [read more]

Shareholder Capitalism as a Model Research Paper

Research Paper  |  10 pages (3,799 words)
Style: APA  |  Bibliography Sources: 8


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 course, countless homeowners saw themselves owing much more on their house than it had been worth, as well as mortgage… [read more]

International Financial Crises Research Paper

Research Paper  |  8 pages (2,842 words)
Bibliography Sources: 8


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 up, pushing borrowers to continue to seek funds in the more attractive overseas markets (Krug, 2000). Credit kept growing, and… [read more]

British Age of Austerity Essay

Essay  |  5 pages (1,807 words)
Bibliography Sources: 20


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.


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]

Career Objectives Pursuing Admission Essay

Admission Essay  |  3 pages (964 words)
Bibliography Sources: 0


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]

CSR in Saudi Arabian Banking Research Proposal

Research Proposal  |  9 pages (2,839 words)
Bibliography Sources: 12


Participation in CSR activities by banks in Saudi Arabia has been viewed to improve their corporate reputation and hence according this banks easy management of the business and good future prospects as it would be easier to attract new customers. On the other hand banks that participate in CSR activities usually witness increase in stock market valuation and it is… [read more]

Fiscal and Monetary Issues Term Paper

Term Paper  |  8 pages (2,730 words)
Style: APA  |  Bibliography Sources: 8


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 the current U.S. economic conditions by institutionalizing key sectors of the economy. Institutionalization of economic sectors would work to prevent… [read more]

Financial Development and Economic Growth Term Paper

Term Paper  |  7 pages (2,291 words)
Bibliography Sources: 1+


We will then examine as to what extent the development in the financial markets of both the countries have contributed to their economic growth. To measure the effect of financial development, we will make use of regression analysis by assuming that economic development is directly related to the financial development of an economy or in other words economic growth is… [read more]

Economics Why That Dollar Term Paper

Term Paper  |  6 pages (1,638 words)
Bibliography Sources: 1+


" (Bowbrick 2003).

While it is true that the uses of money have extended to the Internet in interesting ways, it is also obvious that the emergence of e-currency has not occurred as a result of a pressing need. The circumstances are not the same as in ancient times, where money saved the time involved in the barter system. With the advance of the money system, a higher quality of life could be pursued, because there is more time to indulge in the acquisition and consumption of leisure time and goods.

In terms of the Internet, many opportunities have come about to make, invest and spend money online. This has made the use of the credit and debit card increasingly popular. The global economy is affected, since it is easier to spend and receive foreign currency, and opportunities also exist to relieve the need for jobs.

Money is thus more than paper and coins. It has become a complicated system of acquisition, investment and status. The idea of money is often psychological for its inducement of well-being as it is a concrete and physical means of acquiring goods and services. While the money system has solved the time problem involved in the barter system, it has however a number of attached problems, such as inflation and increasing interest rates. Perhaps it is true that money does indeed make the world go round. This is evident in the misery experienced by the poor and the affluence enjoyed by the rich.


Beggs, J. "Euro Under Pressure but Recovery is in The Wind." Euro Economy & Financial Markets,

Beggs, J. "Euro Interest Rates Have Further to Go." Euro Economy & Financial Markets,

Beggs, J. "Sterling Under Pressure." UK Economy & Financial Markets,

Bischoff, B. "Consumer Action: The New Conversion Rules." In SmartMoney.com, October 21, 1998.

Bowbrick, S. "Past Currency." In Guardian Online, February 25, 2003.

Davies, R. & G. Davies. A Comparative Chronology of Money:…… [read more]

Business and Finance Understanding Term Paper

Term Paper  |  2 pages (738 words)
Bibliography Sources: 0


I believe one of the most outstanding examples of this incorporation of current trends and real life professionals within finance arena with the core concepts of business can be found within McDonough School Of Business and Georgetown. Therefore my choice of a future school, to continue the development of my professional skill set has been wisely driven by my own as well as other's admiration of the standards and practices of the your institution.

The core courses of my business degree have been the most enjoyable classes I have taken, anywhere and applying the knowledge of the text and lectures to everyday experience within my work environment moves the concepts full circle and gives me an even clearer picture of where I see myself in the future. My major at PIMA is finance and accounting, and I have thrived within the academic environment of finance and accounting, which is why I want to continue my education with work experience in the premier financial district in the United States, as well as further academic pursuits.

Imparting the understanding of the importance of business planning within every person's life is a calling for me and I feel that the opportunity to do so within a professional environment would be a natural step for me in my career. I also feel that I can work well with others, and could develop good working relationships with clients from every type of background. Helping people invest wisely for their futures is not only a career to me, it is something that can make a vast difference in people's lives when they most need it, and I would feel great satisfaction in helping people create future happiness and security.

Incorporating and applying large amounts of information and data is one of my strengths, and a valuable tool in finance as well as investment structuring. I like to dig deep into the details of financial instruments, and I enjoy working with people while delving into their investment needs, and their retirement goals and dreams. Teaching others the messages of their own financial history and future would be a formidable career goal, and one I hope to embrace…… [read more]

Finance Any Asset Pricing Theory Term Paper

Term Paper  |  5 pages (2,111 words)
Bibliography Sources: 1+


Another factor is that, as many facets of risks will determine expected returns, as there are factors. (An Introduction to Investment Theory)

These factors of the APT theory, as some recent research suggests, are more effective at predictions of stock returns than even the simplest version of the alternate CAPM would do; in fact, the APT is seen as building on the CAPM and not as replacing it totally. The CAPM, on the other hand, does not take into consideration the co-variants of the stocks in a market. What it does is take an ingenious short cut through the risk factor of stock. It divides the risk into systematic (market) risk and unsystematic. In this manner, CAPM essentially concentrates on the relationship between the systematic risk or beta, and the expected returns. The fact that betas can very well be calculated using an extremely simple formula adds to its value. The CAPM is also able to deliver an assurance to the investor that if you are aware of a particular stock's beta, then you can be sure of its long-term return values. (An Introduction to Investment Theory)

Though most investors question the accuracy of such statements, it has been proven after extensive testing that the CAPM is indeed an accurate testing formula for measuring returns on stocks, and stocks with higher betas do have a higher value of returns. There are doubts, however, that the CAPM will work well only in long-term predictions. The APT on the other hand divides, without specifically stating why, systematic risks into various smaller component risks. The pricing of assets in relation to one another is also explained in this model, rather than explaining the pricing of assets as against an unknown portfolio, as is done in the CAPM theory. Due to this, an investor would be able to address a specific risk that he worries the most about, like, for example, inflation, and eliminate it successfully. (An Introduction to Investment Theory)

Though the APT is considered to be a 'truer' theory than the CAPM, it is true that the former is difficult for the investor to grasp readily, while the CAPM with the simplicity of its working principles, would be a better choice for the investor and the financial professional to use. (From the Article provided) any investor who wants to use the APT would have to be armed with the certain knowledge of the risks involved in an investment. This is a near impossibility, and, in this respect too, the CAPM scores more points. (An Introduction to Investment Theory) I therefore strongly feel that the CAPM is more user-friendly and the better choice for the investor and financial professional of today.


An Introduction to Investment Theory" Retrieved at http://viking.som.yale.edu/will/finman540/classnotes/class6.html. Accessed on 29 July, 2004

Bayesian Approach of the Arbitrage Pricing Theory" Retrieved at on 29 July, 2004

Capital Asset Pricing Model" Retrieved at http://www.investorwords.com/698/Capital_Asset_Pricing_Model.html. Accessed on 29 July, 2004

Definition of Arbitrage Pricing Theory" Retrieved at http://economics.about.com/cs/economicsglossary/g/apt.htm?terms=economic+theoryAccessed on 29 July, 2004… [read more]

Urban Economics Research Proposal

Research Proposal  |  11 pages (3,312 words)
Bibliography Sources: 10


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 button to push to develop an economy. Fostering economic development goes much further than simple Econ 101 answers like "lower… [read more]

Economics Is Intended to Use Practical Examples Article Review

Article Review  |  4 pages (1,204 words)
Bibliography Sources: 0


¶ … Economics" is intended to use practical examples to illustrate the types of concepts that are learned when one studies economics. As Marshall McLuhan said, the medium is the message. The medium here is a piece written in a very casual tone using examples plucked from everyday life to explain some of the fundamental concepts of economics. The overall objective is, ostensibly, to encourage the reader to pick up some of these basic concepts so that they, too, can make the sound economic decisions that are outlined in the article. The casual tone is intended to make the piece more approachable for the intended audience, which is not an audience that has an economic background. At times, the author forgets the audience and slips into concepts or jargon that have not been properly explained -- discount rates, for example -- and would clearly be unfamiliar to any person who would find this article beneficial.

The format by which the author conveys the concepts is based around anecdotes about theoretical transactions. These anecdotes serve as the basis for the explanation of the common view of the transaction and the explanation of the rational economist's view. For the most part, the economists' view is juxtaposed in this manner to illustrate its superiority. The arguments themselves are overly simple, avoiding any of the externalities that may ultimately factor into the decisions in question. This costs the author some credibility -- by ridiculing certain decisions the author places him/herself in the position of having to build a perfect argument. In many cases, this does not happen. An early example is the case of the two houses, one for $100,000 and the other for $500,000. The family in the $500,000 is portrayed as having made an irrational decision. Yet, many considerations go into this decision besides the value of the home -- the utility from living in certain locales being one of them. Even from a strictly economic standpoint, the job prospects of each region play an important role, as do the average wages. Even if the housing decision comes down to a net present value calculation, the author does not portray this choice accurately, and this undermines the strength of the argument.

The article attempts to cover a lot of economic ground. The resulting series of vignettes may succeed at this, but at the expense of readability. The point is that economics can be useful to help one make sense of practical applications, therefore one should study economics. There is no particular need for the article to become an economics lesson in and of itself. The author expends too much time on examples of his concept and this ultimately distracts from the concept. There is simply too many examples and not enough reinforcement of the core message. Each example does have its own value, but a more efficient and cohesive selection of examples would have allowed the author to tie those examples more succinctly back to the main point.

That said, the examples… [read more]

Politics Philosophy and Economics Surplus Trade and Unregulated Market Essay

Essay  |  3 pages (1,322 words)
Bibliography Sources: 1+


Politics, Philosophy and Economics Surplus, Trade and Unregulated Market

Politics, philosophy and economics

The purpose of this essay is to bring moral, economic and political theory to bear on the analysis, justification and criticism of political and economic institutions and public policies on surplus, trade and unregulated market.

A budget surplus refers the amount by which a government, company, or individual exceeds its spending over a particular period of time. Generally, a government does not need to maintain a budget surplus. However, a government has to be careful about running a budget deficit to make sure that the means of financing the deficit do not cause too much of an interest burden. In general, economists become worried when government debts, the most common way of financing a government deficit, rises sharply as a proportion of Gross Domestic Product (GDP). This is because interest payments might also rise as a proportion of GDP unless the government manages to sufficiently reduce the average interest rates paid on the debt. An increasing interest burden means that government revenues will be diverted to pay for financial costs, as opposed to being used for more productive purposes (Investor's word.com).

As in the case of the government, individuals and co-corporate do not have to ensure that their budgets are in surplus or balanced, but they have to be mindful of interest costs as a proportion of their income. Some economists believe that manipulation of the government budget surplus is an effective way of stimulating or slowing economic growth. However, other economists say that manipulating the budget deficit will only result in a change in the price level in the economy, since actual production change in an economy is only decided by changes in the labour force, the state of technology, and productivity of the workforce (Investor's word.com).

Politics and Economic Surplus

When money is tight in a nation, there is usually a standoff. This means that neither the government nor its citizens have attained/got the financial targets they have been yarning for, hence resulting into other alternatives because priorities have to be met. According to my judgment, the government has to look for the negative balance so as to meet its financial obligations, either through public borrowing or adjustments of its national monetary policies that favors it in raising tax revenue. For instance, Stevenson (November 19, 2000) claims that when money was tight in Washington in the year 2000, a standoff meant that neither side got what it wanted. Then, the U.S. government and its citizens began to learn that when priorities clash in an era of plenty, Washington's solution was to give both sides some, if not all, of what they wanted.

Therefore, whenever there is a standoff, Stevenson (November 19, 2000) declares that dividing up the surplus can only be made easier by two factors: the near-certainty that the surplus projection can be revised upward again, and the likelihood that the economy has slowed to a point where fiscal stimulus would no longer have… [read more]

Financial and Monetary Economics Research Paper

Research Paper  |  8 pages (3,006 words)
Bibliography Sources: 10


Financial and Monetary Economics

Since the end of World War II the issue of floating exchange rates in regards to currency has been increasingly brought to the forefront. Part of the reason for this is because the Breton Woods Agreement of 1944 established the dollar as the strongest currency in the world. Where, the greenback and other major currencies would… [read more]

Does Central Bank Independence in Transition Economies Bring Lower Inflation? Essay

Essay  |  6 pages (2,063 words)
Bibliography Sources: 5


¶ … Central Bank Independence in Transition Economies Bring Lower Inflation?

Inflation is simply a situation where too much money chases too few goods, as per the macroeconomic definition. In the developing society inflation can be a political and economic question and price rises may make the government unpopular. Other fiscal measures like taxes, war and global occurrences can trigger… [read more]

Great Depression of 1929 vs. The Global 2008 Economic Crisis Research Paper

Research Paper  |  8 pages (3,030 words)
Bibliography Sources: 10


Great Depression of 1929 vs. The 2008 Global Economic Crisis

For many people, the Great Depression of 1929 and the 2008 Global Economic Crisis are synonymous with: greed along with vast excesses that came to a sudden halt. As both events, would signal how the government's response to financial related calamites would shape economic growth going forward. In the case… [read more]

Fed Raise Interest Rates Research Paper

Research Paper  |  4 pages (1,081 words)
Bibliography Sources: 4


Interest Rates

Federal Reserve Interest Rates and Economic Recovery

The recent global economic collapse brought many specific features of the financial world into sharp relief. The role that government policy plays in shaping financial security and long-term stability has been seen as of immense importance in the past few years, and this is quite understandable given the amount of wealth and productivity that was lost during the worst economic decline since the Great Depression. Everything from the various stimulus package components to whether or not certain politicians are focusing enough on "jobs creation" -- often a term more filled with political rhetoric than economic relevance -- has become a subject for intense debate and media (and presumably public) scrutiny. The problem is not simply that the public and its representatives can't agree on what needs to be done, but there is also disagreement about what certain actions would actually lead to.

Given the complexities of national and international finance and economic growth, it is perfectly understandable that there is a large amount of disagreement in these areas, yet decisions must be made. Issues like the interest rates charged by the Federal Reserve, which is the ultimate supply of money for the nation's banking system and thus the primary factor in the cost of capital for individuals and businesses alike, are of vital importance to future economic growth and stability. A low rate increases economic activity by making capital cheap, but at the same time this leads to inflation which could hurt the nation's long-term stability and the financial position of the dollar in the rest of the global economy. This paper will examine the effects of raising the interest rate on several key economic features and indicators.

Consumer Financing

When the Federal Reserve raises the interest it charges other banks for borrowing cash, these banks in turn charge the other institutions from them higher rates, and ultimately rates become higher for consumer (Magnuson 2008). This means that large-ticket items that consumers typically borrow funds in order to purchase -- real estate and new cars are the most common purchases financed in this way -- become more expensive in both the short- and long-term. A $200,000 loan for a home purchase with a standard 30-year fixed mortgage, for instance, has a monthly payment of $1,073.64, and around $185,000 in total interest; raising the interest rate just one percent means a monthly payment of $1,199.10 and total interest over the life of the loan of over $230,000 (MC 2011). The same house would cost more than a hundred dollars more each month and more than forty thousand dollars more over the life of the loan, meaning fewer consumers would purchase homes (or cars) until real prices (the actual cost of the real estate) dropped, which has a depressive effect on the economy (Magnuson 2008).

Annuity Values

Assuming that the terms of a given annuity are already fixed, a rise in interest rates could actually be a benefit by preserving the value of… [read more]

Managerial Economics the Three Articles Analyzed Essay

Essay  |  6 pages (2,536 words)
Bibliography Sources: 3


Managerial Economics

The three articles analyzed in this paper include the Confucian Consumer: Seven reasons why the Chinese save, when they really should be spending by Nouriel Roubini, Explaining Growth by Douglas Clement, and FDI, Trade, and Product Innovation: Theory and Evidence by Hui-lin Lin and Eric S. Lin. Each of these three article provides a different perspective on the… [read more]

Financial Derivatives on Sub-Prime Crisis Impact Dissertation

Dissertation  |  30 pages (9,921 words)
Bibliography Sources: 25


¶ … Financial Derivatives on Sub-Prime Crisis

Impact of Financial Derivatives on the Sub-Prime Crisis

Over the last several years, the world has been struggling with a financial crisis, unlike anything that has occurred since the Great Depression. At the heart of issue, are various financial related derivates tied to what is known as subprime loans in real estate. Simply… [read more]

Analyzing the Economic Development of a U.S. City Term Paper

Term Paper  |  7 pages (2,306 words)
Bibliography Sources: 1+


¶ … economic development of a U.S. city

The Economic Development of New York City

New York City is one of the most important cities in the world, its importance being granted by its numerous population and history, and by its influence on global level. The influence of New York is exerted in various fields, like commerce, finance, media, culture,… [read more]

Ireland the Social Cultural Economic Legal and Political Environments Research Paper

Research Paper  |  9 pages (2,814 words)
Bibliography Sources: 3


Ireland is one of the smallest countries in the European Union. The country became known as the Celtic Tiger for its robust economy during most of the 2000s, but has since seen significant economic downturn. The Republic of Ireland comprises most of the island of Ireland, the remainder being Northern Ireland, which is part of the United Kingdom. There is… [read more]

Creating a Library Budget in an Economic Downturn Term Paper

Term Paper  |  4 pages (1,170 words)
Bibliography Sources: 3


Economic Conditions and Library Budgeting

Criminological Theory into Murder

Recession and Library Budgeting: Implications and Recommendations

The year 2007 had hit the world quite hard. Stock markets crashed globally and real estate prices toppled down. Even the biggest of the companies found themselves struggling for survival. Unemployment rate shot up at a rapid rate and so did inflation. To top it up, U.S. Dollar got onto the road of everlasting devaluation. This was the beginning of what we know as the current economic recession. Ever since 2007, funding expenditures have been hard on pockets for everyone, be it individual households, private sector companies or the government itself. Even the most necessary and crucial sectors like health and education had to face sharp budget cuts. Like everything else, libraries also became victims of fund shortfall, and thus, were forced to reconsider their budget plan. Libraries, whether individual or institutional, had compromise on essential budget elements.

Creating a Budget in Recession

Creating budgets for libraries is not as easy as it sounds. Things get even worse when these budgets have to be created during recession. Like any other conventional budget, library budgets comprise of incomes and expenditures. Incomes are generally dependent on fees and fines, endowment funds, donations and revenues from routine activities such as printing and photocopying, with endowments being the major contributor. On the other hand, the expenditures are further categorized into operating expenditures and collection expenditure. While operating expenditures are normal administrative expenses, however, collection expenditure includes expenses related to a library's collection such as books, periodicals and other subscription charges.

Considering the fact that the major source of funding for libraries come from donations and endowment funds, it is understandable why budgeting becomes difficult during times of economic decline. Funding from both these sources drops and consequently, the dependence remains on operating revenues which, in most cases, are not enough to finance the expenditures. As a result, libraries have to resort to budget cut downs. This is the most difficult part of budgeting and needs careful planning. A tiny lapse of planning might end up affecting the service quality in a negative way. This may further lead to a decline in subscription revenues, thus making situation even worse.

When creating budgets, libraries should keep in view, their objectives and target. The basic determinants that need consideration include the purpose of library's existence, its clientele, its distinctive services and the resources available to render those services (Farmer 1993). This will help them deciding where to cut. The next step is to take into account, the internal and external factors that influence the library's economic environment. For example, members can be asked to fill out a survey that aims to find out which services are most widely used by the members and what resources are least used. This will give planners an idea about where to focus for reductions. As far as external sources are concerned, factors like competitor libraries and technological and political changes, where political changes refer to… [read more]

Central Banks Dissertation

Dissertation  |  35 pages (10,788 words)
Bibliography Sources: 15


Central Banks

What criteria are, and have been, used to determine monetary policy. Examine the evidence for and against the view that central banks can control inflation. Should central bank's target zero inflation?

What criteria are, and have been, used to determine monetary policy. Examine the evidence for and against the view that central banks can control inflation. Should central… [read more]

Economic Environment Analysis Essay

Essay  |  3 pages (1,206 words)
Bibliography Sources: 5


Economic Environment Analysis

For a variety of companies, the global financial crisis and recession, would force a number of organizations to reexamine their underlying business strategy. Where, managers and executives would look at different ways they can stream line operations, to increase profits. In the financial services industry, the effects of the recession have been more severe. As some of the largest and most well respected financial institutions; has fallen into reorganization or outright liquidation through bankruptcy. This is because these organizations were not aggressively trying to reduce costs as much as possible. To adapt to the current recession and to be prepared for future growth opportunities requires: that all corporations strategically place their various resources, in locations that will help them to maximize their profits. As a result, our organization must be able to reduce costs as much as possible, by placing various call centers in locations that are business friendly and economically viable. In the case of serving customers in Europe a number of locations are being considered. One of the possible locations, the Czech Republic, has a number of distinct advantages such as: it has been delivering positive growth for the first two quarters of 2010. Where, the GDP rate would grow at: 1.5% in the first quarter and 2.3% in the second quarter. (GDP Growth Exceeds 2%, 2010)2 This is significant, because it follows a period of economic decline that the country would experience, as the GDP rate would fall by 4.3% in 2009. (OECD 2010)3 This follows several years of having consistent growth rates of 6% annually. For our organization, the recession is presenting the opportunity to set up a possible call center in the Czech Republic. However, to determine if it is financially and economic prudent, requires conducting an assessment of the country itself. To achieve this objective we will examine: the different opportunities and risks of establishing call center operations in the Czech Republic. Together, these different elements will provide the greatest insights, as to if placing call center in this location will help to reduce costs and increase profit margins.


The Czech Republic has been able to have a successful transition from a planned to a market economy. Where, the country is currently a member of the EU and it is at the cross roads between Russia and Europe. The geographic location of the Czech Republic makes it an ideal spot for exporting a variety of goods and services. As far as the financial sector is concerned, the country's banks have been protected from the financial crisis because of the conservative lending standards that the government has in place. An example of this can be seen by looking at a report on the state of the banking sectors during the middle of the recession from Price Waterhouse Cooper. Where, they said, "The banking sector in the Czech Republic is a performing and profitable business, playing a key role in the development of the Czech economy. During the global financial and economic… [read more]

Economic Issues Regarding Greece and the Euro Currency Because of Greece's Financial Situation Essay

Essay  |  3 pages (928 words)
Bibliography Sources: 4


Economic issues regarding Greece and the euro currency because of Greeces financial situation.

Economic issues regarding Greece and the euro currency because of Greece's financial situation

With a gross domestic product of $341 billion for 2009, Greece is the 34th largest economy of the globe. The model at the basis of the economy is a capitalism in which 40 per cent of the GDP is generated by the public sector and 15 per cent of the GDP is generated by tourism. Living standards -- given by the income per capita -- in Greece however remain lower in comparison to those in the developed countries of the European Union. Public debt, inflation and unemployment are however above the average in the euro zone.

Up until 2007, Greece had been following an ascendant trend due to increased access to credits, higher consumer spending and improvements in infrastructure. In 2008 however, the country's economic stability and funds decreased due to the internationalized crisis. By 2009, Greece was in economic recession and had accumulated a federal debt of 10.7 per cent of the GDP -- in a context in which the EU had imposed a 3 per cent cap on federal debt. The internal problems, such as decreasing federal funds, inadequate statistical reporting or inability to follow through the reforms set with the European Union, forced international credit rating agencies to downgrade the country's debt rating.

In this context of increasing financial instability, the government in Athens has implemented an austerity program by which it aims to reduce governmental spending and restructure the public sector. The measures have however generated intense populous turmoil and protest and even riots are possible in the country. In support of the country's economic revival, the governments in the euro zone and the International Monetary Fund have "pledged more than $160 billion in support of Greece over the next three years" (Central Intelligence Agency, 2010).

The financial recession in Greece is generally perceived as a powerful international phenomenon, with potential impacts on the near and far global communities. Despite the fact that Greece is a far away country and a small economy (generating only about 2 per cent of the European Union's output), its problems could easily represent the commencement of a greater global financial crisis. Greece represents the model of several modern countries which have increased their foreign borrowings, and despite its size, Greece could also represent the symptom of a greater crisis.

More explicitly, Greece has borrowed immense sums of money to cover its losses. Combined however with the emergent events and the unstable economic climate in the world, the sovereign risk in Greece has exponentially increased. It is in this order of ideas possible for the Greek officials to modify their fiscal policy in a means that decreases the value…… [read more]

Walmart Economic Trend General Environment Case Study

Case Study  |  3 pages (1,157 words)
Bibliography Sources: 5


Wal-Mart Economic Trend

Economic Trends

There are a number of different factors that will affect the economic trends of Wal-Mart over the next three to five years to include: interest rates, unemployment rates and inflation rates.

Interest Rates

When looking at the effect that interest rates will have on Wal-Mart, it is clear that it will have a dramatic impact on the company's bottom line. What happens is when interest rates are increasing; the overall amount of lending standards will become tighter. This makes it more difficult for consumers and businesses to arrange financing for large purchases / equipment. At which point, many businesses will begin to layoff workers and economic activity around the country will slow. (Seabury) This will have a positive impact upon Wal-Mart, as their overall costs are lower than their competitors. The reason why, is because Wal-Mart will seek to purchase the different products from the manufacturer / whole seller, at the lowest prices possible. This is the basic formula that has allowed the company to maintain low prices. While at the same time, seeking other ways to reduce prices such as: utilizing their supply chain management tools (to more quickly respond to the needs of different stores). These strategies have been used to reduce costs for the general public, as Wal-Mart is able pass the savings on to customers. During times of economic prosperity or challenges, many consumers will shop at Wal-Mart as way to keep their overall costs low. The effect that this has had on consumer prices has been dramatic. Evidence of this can be seen with a study that was conducted by IHS Global Insight. Where, they found that between 1985 and 2004, Wal-Mart was able to help consumers see a 3.1% reduction in prices. This is significant, because it shows that the lower prices offered to consumers, allows the company to prosper when interest rates are low or high. ("Measuring the Economic Impact of Wal-Mart on the U.S. Economy")


When unemployment rates begin to rise, is when consumers will be more inclined to go to Wal-Mart during times of economic challenge. What happens is, as the unemployment rate begins to increase, consumers will dramatically reduce spending. This is because the rising unemployment rate is having an effect on consumer confidence. Once this takes place, it means that many consumers will reduce spending and find ways to save money. One way to do this is to purchase more items at Wal-Mart, as their prices are more than likely to be cheaper than competitors. This will have an impact upon the overall bottom line of the company, as their earnings and sales will increase during times of economic contraction. An example of this can be seen when the company was reporting their earnings in February 2009. Where, they reported that fourth quarter 2008 earnings per share, were above expectations of $.94 cents coming in at $.98 cents. While during the same period, retail sales increased 1.7%. This is significant, because it shows… [read more]

Pakistan Economic System Research Paper

Research Paper  |  16 pages (4,110 words)
Bibliography Sources: 3


Pakistan Economy

Currently there is a great deal of economic instability throughout the world. Emerging markets are particularly susceptible to experiencing economic instability when global economies begin to falter. Emerging market economies are defined as "an economy with low to middle per capita income. Such countries constitute approximately 80% of the global population, and represent about 20% of the world's… [read more]

Contrarian Investment Strategies Thesis

Thesis  |  73 pages (26,080 words)
Bibliography Sources: 60


Contrarian Investment Strategies

Over the last several decades a number of different investment strategies have evolved. All of them were designed to help investors be able to successfully time the up and down moves, that occur on the world equity markets. However, the overall results have varied dramatically as investors, traders and analysts argue about which theory is the best… [read more]

Crisis Economics or the ED of the Free Market Book Review

Book Review  |  2 pages (508 words)
Bibliography Sources: 1


Crisis Economics by Nouriel Roubini

In his book titled "Crisis Economics" Nouriel Roubini skillfully unveils years before the red flags that would lead to the biggest financial crisis in the United States and in the world since the great depression. During his speech at the International Monetary Fund in Washington DC he warns us a long suffered housing bust, a brutal oil shock, a declining consumer confidence and inevitably a recession. The author states "As homeowners default on backed mortgages, the global financial system would shudder to a halt," triggering a crisis that cripple hedge funds, investment banks would go bust and other major firms would cease to be independent entities as a national economic illness becomes an international pandemic. The book clearly demonstrates how a global economy teeters on the edge of a potential deflationary spiral not seen since the great depression. He predicts the problems but also attempts to provide remedies. In chapter seven he points out how policymakers used government's power to arrest the spread of the crisis consequently with future implications stemming from theses radical measures. He asserts the need for a new rules and regulations to oversee major players and a new financial architecture to ensure transparency and stability to and for financial institutions. He explains just as the Great Depression swept away contradictions embodied by J. Edgar Hoover, the great recession promises to usher a new way of understanding and above all, a new manner of preventing crises. In an effort to advert complete ruin we often fall…… [read more]

Labor Economics Research Paper

Research Paper  |  10 pages (3,344 words)
Bibliography Sources: 7


Labor Economics -- the Ripple Effects of Unemployment

The litany of dry unemployment data read from a teleprompter by an attractive, well-groomed cable TV newsreader tends to go in and out of the ears of many Americans. Those out of work probably don't want to hear any more to contribute to their own personal misery. Those who are employed may… [read more]

Milestone 2 Business Recommendations Based on Economic Projections Research Paper

Research Paper  |  3 pages (1,032 words)
Bibliography Sources: 4


¶ … economic futures facing Larson Inc. are a U-shaped economy characterized by uncertainty; a V-shaped economy characterized by a sharp recovery and a W-shaped economy characterized by a double dip recession -- from the first of which we are just now emerging. The U-shaped economy is characterized by uncertainty -- the economy's future is relatively unknown. Economic recovery is delayed, leading to adverse consequences such as stagflation that gripped Japan in the early 1990s and lasted for several years. This possibility has the lowest probability of the three given that the GDP has increased strongly in each of the last two quarters, indicating that the economy has pulled out of the bottom of the U. already.

The GDP increases hint at a V-shaped recovery over the course of the next five years but do not guarantee it. Two quarters of economic growth does not a recovery make. However, the probability of a V-shaped recovery if high, for a couple of reasons. The first is that the credit crunch has eased. The second is that the Fed has kept interest rates at rock bottom in order to spur borrowing and investment (Federal Reserve Bank of New York, 2010). In addition, major American trading partners like China and Canada did not suffer the same intensity of downturn and are ahead of the U.S. In the recovery curve.

This does not preclude the possibility of a W-shaped "double dip" pattern in the next couple of years. There are a couple of reasons why this could come about. The first is the problems with the euro -- especially Greece and Spain -- which could destabilize the European currency union (Kirschbaum, 2010). This would lead to a flight to the U.S. dollar, making American exports uncompetitive on world markets, exacerbating the trade deficit. In addition, instability in Thailand, while country-specific at the moment, could have a destabilizing effect on Southeast Asia (CNN, 2010), or all of Asia, to the detriment of global economic growth. Lastly, China's capitulation on its currency peg appears to be only partial, and may only be for show. If the yuan is kept high, gains in the U.S. economy could be offset by increases in the trade deficit and decreases in savings rates, evidence of which has already emerged -- down from 5.4% in Q2 2009 to 2.7% today (BEA, 2010). This is to say nothing of the jobless recovery. In short, there is substantial cause for concern about the course of the global economy recovery in the next couple of years, a double dip is a strong possibility, just behind the possibility of a V-shaped economy.

The economic climate has not affected demand for batteries, so Larson's sales have not been hit hard. However, if the economy improves, demand for new electronic products will increase. In tough economic times, people may still need batteries, but they are less likely to buy new equipment. With economic recovery, new equipment sales (computers, cell phones, mp3 players, smartphones, etc.) are expected to… [read more]

Keynesian and Classical Economic Schools of Thought Compare and Contrast Essay

Essay  |  3 pages (1,043 words)
Bibliography Sources: 2


Classical vs. Keynesian economic theory

Classical economic theory was the generally accepted economic paradigm until the Great Depression. Classical economics is said to have begun with the publication of Adam Smith's influential 18th century treatise the Wealth of Nations. In this text, Smith states that the 'invisible hand' of the market should be allowed to govern human economic decision-making. Producers supply their product to meet consumer demand, and the market arrives at a fair equilibrium price naturally. When consumers are willing to pay more, suppliers make more goods. As price goes up, demand goes down. As price goes down, demand goes up, but producer's willingness to produce more goods goes down as well. These assumptions were challenged by the spiraling downward of the economy after the 1929 stock market crash.

While classical economists did recognize that there were boom and bust cycles within the free market economy, they believed that these cycles would be naturally corrected if the business cycle was left to run its course. Eventually, prices would become so low during a recession consumers would begin to buy goods and services again. However, the great economist John Maynard Keynes stated this was not always the case. Consumers during a severe economic contraction would wisely fear for their jobs and 'hide their money' under the mattress, according to Keynes. This policy, while wise for the individual, was unwise for the economy, and would cause consumption to plummet still further. More individuals would be laid off, only intensifying the cycle. Even investors would 'hide their money' under the mattress -- i.e., not invest in commerce and infrastructure -- given the turbulent economic climate.

Ironically, wages that were too high may have intensified the Great Depression. Wages were supposed to plummet during a recession, according to conventional classical wisdom. However, wage rates were constant until 1931, which effectively meant in an environment of rapidly decreasing prices, wages had gone up. Wages proved to be 'sticky' to changes in the economy, yet consumers did not spend their additional money, and layoffs continued to increase. Adding to the problem was that the United States was still on the gold standard, which meant that the amount of money it could print was limited by its amount of gold reserves. The Federal Reserve was forced to adopt a deflationary economic policy to remain on the gold standard: to be fiscally responsible it increased its discount rate, the rate at which member banks could borrow from the central bank, effectively raising the interest rate the banks were forced to charge to consumers (Smiley 2008). The economy thus continued in its downward spiral of allowing less money for investment, decreased production, increased unemployment, and decreased consumer demand.

The solution to this spiral was government spending, according to the Cambridge-educated British economist John Maynard Keynes: "Keynes believed that consumption was the key to recovery and savings were the chains holding the economy down. In his models, private savings are subtracted from the private investment part of the national… [read more]

Development Economics Term Paper

Term Paper  |  3 pages (872 words)
Style: MLA  |  Bibliography Sources: 1


¶ … Economics: Still Rolling: China's GDP Hits 8.7%

Still rolling… (Song Shengxia and An Baije, 2010) focuses on the state of the Chinese economy in a context in which 2009 was a difficult year for most global economies. China however managed to capitalize on its protectionist policies and its production and export capabilities and as such maintain a positive growth trend. Still, in their attempts to minimize the negative impact of the internationalized financial crisis, the Chinese banking sector granted more loans than normally, creating as such a risky situation of massive debt -- the very core of the current economic crisis. Aside increasing debt levels, future problems could also be posed by overproduction and incremental inflationary levels.

Yet, these are just potential threats, and one should praise the Chinese economy for making such an astonishing recovery in times of global financial crisis. 2009 did not commence in the most positive manner for the Chinese economy, especially as the growth in the gross domestic product for the first quarter (6.1%) was significantly below the target imposed by the federal authorities (8%). The growth rates of the following quarters were of 7.9%, 8.9% and 10.7%. The trend is revealed throughout the chart below:

At this stage of the article analysis, it has to be noted that the piece is not the easiest one to read for the inexperienced reader. It assumes that the individual possesses sufficient economics background and does not introduce him to the core of the issue, but to a specific item. Probably the most relevant example in this sense is the factual and statistical discussion about the Chinese national output. Shengxia and Baije present the figures for 2009, but do not reveal the national trend in the Chinese GDP throughout the past years, with the intent of presenting the context. Yet, since this is necessary, the chart below reveals the evolution of the Chinese GDP throughout the past decade:

While it is clear that the article is intended for individuals with an economic background, it is also true that the topic is interesting and could attract the general public, but this general public would have difficulties understanding the terminology and the actual situation and implications, since they do not have knowledge of the actual context.

Shengxia and Baije present the growing Chinese GDP from yet another angle -- that of the regional role it played. By proving its stability, China created a favorable context for the other Asian countries, which were able to maintain their exports to the western regions of the globe. Additionally, the authors argue that the increase in Chinese output…… [read more]

Govern the Profitability of Banks Term Paper

Term Paper  |  23 pages (6,338 words)
Bibliography Sources: 30


This is evident in the various achievements in several areas of the banking sector. The introduction of the BIC principles coupled with the legislation of the central bank's independence and the introduction of transparency and accountability mechanisms into the financial framework have all added up in the list of achievements.

The level of success of the financial sector reform in… [read more]

Finance Necessity Never Made a Good Bargain Essay

Essay  |  3 pages (980 words)
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Necessity never made a good bargain

The idiom is attributed to Benjamin Franklin and it stands the most truth. What it virtually means is that a company or an individual in a desperate situation does not hold any ability to negotiate a higher position. Basically, he is obliged to accept whatever terms imposed by the other party. Consequently, it is more likely for him to give up part of his demands or desires, as requested by the other party. He is under no circumstances able to impose new conditions or stand by his initial requests. He is so desperate to close the deal that he will gradually agree to most, if not all, of the conditions imposed by the other negotiator. All these point out to the fact that, when in dire need for an agreement to be reached, the individual or organization will not be able to make a good bargain.

Cash in the bank

There are numerous ways in which the cash owned in bank accounts helps increase company performance. On the one hand, there is the example revealed by Urban Outfitters, in which the cash they held in banks helped increase their levels of liquidities, which then allowed the company to honor its short-term commitments -- namely the payment of the short-term debt. This reduces the pressures imposed by the internationalized financial crisis, but also supports organizational performance in other states of economy. Therefore, on the other hand, the increased levels of liquidity allow the organization to pay the counter value of the services and commodities received from their purveyors, meaning that no shortages will be encountered here and negatively impact production. The money could also be used to ensure the payment of the personnel salaries, and even other financial incentives such as premiums and bonuses, which further increase employee satisfaction, commitment to the organization and performances.

3. Risky finance

As the economic crisis has shown, too many organizations became involved in risky financial operations and as a result had to declare bankruptcy, or at least put on a great struggle to survive. A first example is offered by the International American Group, or AIG, a leading insurance company. Their mistake revolved around the blind implementation of credit derivatives. Similar to other players in the financial sector, the AIG executives believed that these instruments would help protect against risks. They were introduced by the London offices, a subsidiary of the U.S. organization, handling financial services. Basically, what the offices did was to sell credit default swaps (a financial tool of credit protection) on collateralized debt obligations. However, the value of the assets held as guarantees gradually declined. The organization's credit rating was demised, and all these materialized in an impending necessity to upfront $15 billion as collateral with its business partners. This threw AIG into a liquidity crisis (Morgenson, 2008).

The second example is revealed by Lehman Brothers. Their situation is simpler to describe as the…… [read more]

Mobile Banking in Microfinance Research Proposal

Research Proposal  |  3 pages (839 words)
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Mobile Microfinance

Mobile Banking in Microfinance

Microfinance is greatly aided by developing mobile banking technologies. One of the great hindrances to microfinance had been the lank of institutions engaged in microfinancing operations; the advent of mobile banking allows for the same banks that already offer such services to bring them to a much larger proportion of the world's poorer populations (CGAP a 2009). Especially in rural and remote areas without adequate infrastructure even for point-of-sale or ATM microfinance transactions, wireless networks and satellite communications still make mobile banking possible. This gives the bank a broader pool of borrowers, decreasing the bank's costs per borrower and increasing both the bank's profits and its ability to make loans (CGAP b 2009). Costs to the borrower are also reduced in terms of travel time and expenses and the cost of time delays.

Microfinance itself is untraditional, but at first it followed traditional models of banking insofar as its transactions with banking customers. Experimentation with other delivery methods showed that point-of-sale and other branchless transactions conducted through third party agents reduced transaction costs by to as little as a thirtieth of the costs associated with branch-based transactions (CGAP a 2009). Initial results of mobile banking observations suggest that these drastically reduced costs are cut in half again when point-of-sale agents are cut out of the loop and mobile phones and other devices are introduced. In addition, this increases the amount of competition in microfinance, even in areas with an accessible branch location (WorldBank 2008). Though microfinance was never a profit-heavy venture, this competition could further reduce costs to borrowers.

Cash transactions, of course, still require a physical agent working on behalf of the banking institution, but even costs associated with these agents show a decline when mobile banking is made available (CGAP b 209). The essential strengths of mobile banking in microfinance, then, are the reduction in transactions costs to both banks and consumers, and the flexibility that mobile banking provides. This flexibility leads both to increased competition and increased utility, and the broader pool of lenders reached through mobile banking allows for a further reduction in transactional costs and an increased ability and willingness for banks to engage in microfinancing operation in more areas. The already noted effects of microfinance not only on direct participants but on communities where such services are available suggests that the widespread microfinance brought by mobile banking could help to establish economic growth and stability in wide regions of the world (CGAP a 2009).

The mechanisms for…… [read more]

Economics the Hong Kong Government Launched Essay

Essay  |  5 pages (1,517 words)
Style: Harvard  |  Bibliography Sources: 1+


¶ … Economics

The Hong Kong government launched the Wage Protection Movement in the month of October in 2006. Since its launch, the wage protection program and policy being implemented in Hong Kong has been going through a vigilant process of legislation and many have questioned whether its implementation and legislation will make the economics of the country better or… [read more]

Effects of Economic Recession Thesis

Thesis  |  5 pages (1,538 words)
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The recent economic downturn has impacted different nations in different ways. Each nation's specific characteristics contribute to the degree to which the recession impacts it. Canada, for example, has suffered because of its dependence on exports to the U.S., but at the same time it has not suffered much because strength in its financial system essentially eliminated the possibility… [read more]

Economics - How China's Economy Affects Global Essay

Essay  |  7 pages (2,387 words)
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¶ … Economics - How China's Economy Affects Global Economy

The label "Made in China" is popular across the entire globe. The reason behind this popularity is represented by the simple fact that, due to an increased population density and low-cost labor force, China has been able to attract numerous foreign investors, who have their products manufactured here and then… [read more]

Accounting - Corporate Finance Thesis

Thesis  |  1 pages (311 words)
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Accounting - Corporate Finance

How this finance and budgeting course has made an impact on you as a professional and describe the most valuable learning you will take with you.

Finance and budgeting are two of the most ethically difficult yet necessary areas for a university to address. No matter how high the ideas of an academic institution, these ideals must be paid for, and translated into real, financial terms through the budgetary process. Negotiating a budget is difficult because economics is the science of scarcity -- to finance a new program almost inevitably requires cutbacks in other areas, and sacrifices of time as well as money. Making budgeting decisions requires difficult moral choices that will hurt some people and reduce the effectiveness of the institution in some areas. For example, cutting the funding for under-utilized departments may make tuition more affordable, but can hamper the university's academic excellence and reputation for providing a well-rounded…… [read more]

Economics of Strategy Term Paper

Term Paper  |  4 pages (1,166 words)
Bibliography Sources: 1+


¶ … economic crisis -- bankers to blame?

Be it resolved that bankers in developed economies are responsible for the global economic downturn and have behaved without moral integrity.

To blame bankers for the global recession that has been steadily degridating assets values globally by the trillions of dollars from 2007 to 2009 (Corden, 2009) is to miss the broader and far more significant factors. The last series of scandals including Enron, Tyco and many other corporations had as their catalyst the complete lack of insight and compliance initiatives on the part of the U.S. Federal government. The same could be said of the world's governments as well. In reaction to the astounding lack of compliance with regard to financial institutions and the publicly-traded corporations they served, the U.S. Government in 2002 passed the Sarbanes-Oxley Act (Gerrish, 2002). Other nations followed this trend, enacting into law compliance initiatives that had been severely limited in the past. These compliance initiatives did little however to solve the more fundamentally broken areas of global economies when it came to ethics and reporting.

As a result the Sarbanes-Oxley Act did nothing to provide the U.S. Securities and Exchange (SEC) Commission with any insights into how the innate financial system reporting and transaction inaccuracies could be so easily manipulated by corporations and by government leaders as well. In addition, by ignoring these dynamics, economists in the larger western nations could continue to use interest rates to manipulate and re-define the value of their currencies to ensure a continued growth of Gross Domestic Product (GDP).

These two factors of a global financial system increasingly capable of being manipulated not by bankers, but by entire governments to alleviate any costly fluctuations in their currency, as China and the U.S. both did extensively during this time, and the deflation of interest rates drove down the cost of capital to levels never seen before. As a result, with many of the world's western nations flush with cash and interest rates at exceptionally low levels as a result, housing re-financing became the new Automated Teller Machines (ATM) for millions of homeowners globally. In addition, low interest rates made it possible for sub-prime lenders to create highly profitable business models that extended homeowner's mortgages with interest rate escalations that would initially have very low interest rate-based payments a typical working class family could afford, only to settle at three or four times the original amount in the majority of cases (Gerrish, 2002). This forced nearly all of these middle class families with sub-prime mortgages to default and eventually see their homes foreclosed upon.

On a more aggregate level the subprime loans were then bundled together into investment packages and re-sold, with bankers not having any visibility into the quality of the loans purchased in the bundles. Today there is still confusion over these loan investment bundles.

From this analysis it is clear that the U.S. government and its reliance on interest rate reductions as a means to spur economic development actually… [read more]

Economics When the U.S. Economy Plunged Term Paper

Term Paper  |  7 pages (2,364 words)
Style: Harvard  |  Bibliography Sources: 1+



When the U.S. economy plunged into recession in the second half of 2008, there was considerable concern north of the border in Canada about the prospects for that nation's economy. The two countries are the largest trading partners in the world, and it has long been viewed that the Canadian economy depended on exports to the United States. Indeed,… [read more]

Economic Impacts of the Following on Canada Thesis

Thesis  |  5 pages (1,374 words)
Bibliography Sources: 5


¶ … economic impacts of the following on Canada

Impact of Inflation on the Canadian Economy

Regarded as an economic phenomenon, inflation is perceived as a generalized, long-term increase in the level of prices and a reduction of the purchasing power of the currency in the respective country. Inflation has significant effects over the economy and over the interests of all economic agents, over the social and political climate, and over international economic relationships.

The size of the effects depends on the intensity of inflation and on the status of each economic agent. Some clearly lose something, while others may find themselves to have certain benefits from inflation.

Some of the elements that represent direct effects of high inflation represent wealth redistribution, social convulsions, decreased living standards for certain categories, economic information may lose some of its value, decreased savings and investments, production losses, and increased unemployment rate. Regarding income redistribution, any price modification implies modification of incomes for at least two economic agents, therefore a distribution modification and another income configuration for the economic agents in case (Phelps, 1970).

In order to better understand the economic impact of inflation, it is necessary to present the current economic situation that characterizes Canada. The country is a high-tech industrial society, with a market-oriented economic system. Over the past few decades, Canada experienced continuous economic growth, becoming one of the most stable and secure economies in the world.

However, the economic and financial crisis did not leave the Canadian economy untouched. In 2008, Canada's economic growth was significantly slower than before. The most affected sectors are the housing and the auto sector. It is expected that public finances will deteriorate in the following period.

In 2008, Canada's GDP purchasing power parity reached $1.307 trillion, with a GDP real growth rate of 0.6%. GDP growth rate reached 2.7% in 2007 and 3.1% in 2006. The unemployment rate reached 6.1% for a labor force of 18.18 million. Public debt reached 62.3% of GDP (CIA, 2009).

Inflation reached 1% in January 2009, but global macroeconomic conditions might determine an increase of inflation's level. However, the ideal inflation level is 2%, which means Canada's economy might benefit from an inflation increase, depending on its level.

Bank of Canada's policy is to target an inflation rate between 1-3%. The ideal pursued scenario involves a 2% inflation rate, which is considered to be core inflation for Canada.

But Canada has not always been in this monetary situation. Over the past decade, the country experienced several types and levels of inflation. Obviously, each of them had different repercussions on the country's economy.

Between the 1970s and the 1980s Canada's inflation was high and unstable. The impact consisted in significantly large and rising public deficits and debt. These were unsustainable at that point. The matter caused future economic turmoil and instability.

But things took a different turn since 1990s. The country's monetary policy started to focus around an inflation-control target. But controlled inflation was not enough. The situation had to… [read more]

Economics Optimal Currency Area Essay

Essay  |  7 pages (2,259 words)
Style: Harvard  |  Bibliography Sources: 10



Optimal Currency Area

An Optimal Currency Area (OCA) is a geographic area that is best suited to share the same currency because it would optimize the region's economic efficiency. It sets up a description for what distinct qualities it would take for an area to become an OCA and either merge currencies or have a new currency. The OCA… [read more]

Economic and Trade Development Thesis

Thesis  |  8 pages (2,664 words)
Style: MLA  |  Bibliography Sources: 8


Economic and Trade Development

The economic situation of Western Europe was faring extremely well in the first thirteen years of the 20th century following the Industrial Revolution. However, the growth of Nazism and Fascism followed by the World Wars and the Great Depression plunged most of the major European states particularly Germany and France into a seemingly irretrievable economic situation.… [read more]

Wto/Imf International Economic Cooperation Without a Doubt Thesis

Thesis  |  2 pages (451 words)
Style: Harvard  |  Bibliography Sources: 0


¶ … Wto/Imf

International Economic Cooperation

Without a doubt, the most important factor in the Group of Eight nations (G8), the World Trade Organization (WTO) and the International Monetary Fund (IMF) are the fact that they are all in the hands of developed first world. These organizations have no real motive (other than altruism and goodwill) to aid the developing nations of the world economically. Though it is in the long-term interest of the first world countries of the world to aid the developing world and so produce a better class of consumer and forestall major global crises that demand attention, and even though this fact is acknowledged (or at least given lip service) by these organizations and the countries of which they are comprised, the actions and policies they carry out are not in line with their stated beliefs and intents. Instead, such organizations create short-term profits for the banks and nations that constitute the organizations.


There are many things that prevent the International Monetary Fund from acting as the economic savior of the developing world, which is how the fund has been touted. Dedicated to giving short-term loans and considered a "last resort" of lending to nations, the countries that owe the most to the fund are also those with the least say in how the fund is run. The weighted voting…… [read more]

Economics Minsky's Moment "Stable Economies Sow Research Proposal

Research Proposal  |  1 pages (354 words)
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Minsky's Moment

"Stable economies sow the seeds of their own destruction" (Buttonwood, 2009). This is the basic philosophy of Hyman Minsky, an economist of the mid-20th century. Minsky argues that our financial system plays a big role in amplifying the economic cycle. He says that investors, banks, companies and consumers all tend to make the same mistake. They all assume that the future will look a lot like the past. After seeing several years of growth and low inflation, people develop an erroneous confidence that the good times will last for a long time. This encourages people to begin to borrow, banks begin to lend and the riskiness of the whole system begin to rise (Buttonwood, 2009).

Minsky says that the process has three phases. The first phase consists of investors taking on little enough debt that they have no trouble meeting their capital and interest payments. The second phase consists of investors stretching their finances so they can only afford the interest payments. And the third phase is where investors take on debt levels that…… [read more]

Decline in Housing Prices and Economic Consequences Housing Bubble Essay

Essay  |  5 pages (1,836 words)
Style: MLA  |  Bibliography Sources: 1+


Decline in Housing Prices and Economic Consequences of the Housing Bubble

The Origin and Factors Responsible:

The origin of the crisis can be ascribed to 4 features. (i) the first and foremost relates to the immense growth in the financial products as well as financial practices that included high levels of leverages which were being sustainable only under situations of… [read more]

Analyzing the Text Everyday Economic Statistics Essay

Essay  |  4 pages (1,160 words)
Bibliography Sources: 0


¶ … Economic Statistics

Guide to Everyday Economic Statistics

By Gary E. Clayton and Martin Gerhard Giesbrecht

Gary Clayton and Martin Giesbrecht's a Guide to Everyday Economic Statistics is a useful addition to one's library due to a multitude of reasons, among which two are the most prominent. First of all, the book offers the reader an insight into the economic mechanisms of important matters such as employment and unemployment, international trade, interest rates, national output, imports and exports, profits, expenditures, expected gains or financial markets. And it does this by revealing real life examples from the American economy which make the issues discussed even more so relevant. A Guide to Everyday Economic Statistics uses information that is otherwise available to the reader on other sources, such as the website of the United States Census Bureau, making as such one more step in bringing the reader closer to the book and the reality and relevance of the information presented.

The second reason which makes the book a valuable addition to the library is given by the style used in its writings. Scholars and academicians in the field of economics often make the mistake of using pompous words and getting lost in the specific terminology. While this reveals thee highly professional levels of preparation of the writer and captures the interest of the experienced reader, it does however fail to attract the novice economist. Clayton and Giesbrecht understood that economic matters often preoccupy the mind of the simple individual or the persons specialized in other fields. As a result then, they wrote their book using a simple and common style, making as such the concepts more comprehensible for the readers.

While the first reason in support of purchasing and reading the book is generally to be praised, the second one could generate controversies. The most prominent con argument of writing a book for inexperienced economists is that it requires the presentation of extensive introductory information. The experienced economists are already familiar with the terminology and the basic concepts and might find the introductory parts rather redundant and useless. The pro argument seems however to weigh more in balance and is based on the idea that the basic economic principles should be understood by all individuals, simply because this knowledge is compulsory in leading an appropriately informed life. This approach to introducing the inexperienced to the art and science of economic principles supports the intellectual development of the contemporaneous society.

The previous lines suggested that reading a Guide to Everyday Economic Statistics would help the average individual gain a better perception of the world and become better informed. This information is necessary for him to properly live his life. To best explain this statement, as well as the utility of the book, take the most simplistic example of a mechanic watching the eight o'clock news. Say that the man is currently employed at Ford Motors Corp and has been their loyal employee for the previous ten years.

The anchor man is discussing… [read more]

Economic Growth GDP Comparison: Italy Essay

Essay  |  2 pages (708 words)
Style: APA  |  Bibliography Sources: 3


Economic Growth

GDP Comparison: Italy vs. The United States

The global economic crisis has been affecting almost all of the nations of the developed world. However, despite the fact that the source of the downturn is largely thought to have begun in the United States credit market, all of the countries of the European Union have become mired in the recession more quickly and more deeply than the nation from which the crisis originated (Pfanner 2009)."The economy of the 16 countries sharing the euro currency declined by 1.5% in the fourth quarter, according to the European Union's statistics office. That is even worse than the 1% decline in the United States economy during that period, compared with the previous quarter" (Pfanner 2009). On an annualized basis, "the 1.5% decline in output would amount to a drop of roughly 6% -- a significantly bigger fall than the 3.8% annual rate of contraction in the United States during the fourth quarter" computed in a similar fashion (Pfanner 2009).

While the economic powerhouse that was the EU has been reeling as a whole, one of the worst-affected countries is Italy (Pfanner 2009). Italy's fourth quarter output contracted by 1.8% (Pfanner 2009). Even more disturbingly, the forecast for Italy's gross domestic product (GDP) in 2009 is projected to contract by 2.5% rather than the previously anticipated 0.8%. "The international crisis has hit... An economy that was already weaker than the others," in the EU particularly hard (Italy 2009 GDP to shrink 2.5 pct, 2009, Reuters). Nations that experienced the most rapid growth from a lower point of economic development such as Italy, Spain, and Greece, have suffered the most in recent months. Tens of thousands of workers have been marching through the streets of the Italian capital "snarling traffic and demanding action to ameliorate the crisis" (Pfanner 2009).

According to the U.S. Bureau of Economic Affairs, the fact that the United States is in 'less bad shape' than the European Community nations such as Italy should not be a source of consolation. The "real gross domestic product -- the output of goods and services produced by labor and…… [read more]

Economics of Peru Thesis

Thesis  |  10 pages (2,862 words)
Style: MLA  |  Bibliography Sources: 3


Economics of Peru

The focus of this work is examining Peru's economic state and to conduct an analysis which determines the optimal direction that Peru should take in country development in the near future to optimize the country's economy. This study reviews an extensive base of literature and states suggestions and indications for the country of Peru and the initiative… [read more]

Convenience Banking Thesis

Thesis  |  10 pages (2,868 words)
Bibliography Sources: 1+


Convenience Banking

BB&T - Convenience Banking

The contemporaneous banking system is extremely dynamic, facing increased competition not only nationwide, but on a global level as well. In order to strengthen and maintain their competitive position, banking institutions strive to increase the levels of customer satisfaction, while in the same time increasing the internal operational efficiency. A most relevant means of… [read more]

Corporate Social Responsibility From an Islamic Law Essay

Essay  |  5 pages (1,660 words)
Bibliography Sources: 10


¶ … Corporate Social Responsibility from an Islamic Law Perspective

The concept of Corporate Social Responsibility (CSR) is at its very basis an exercise in Utilitarian ethics (Lynch-Wood, Williamson, Jenkins. 2009, 53, 54), egalitarianism (Stephenson, 2009, et.al), and concept of inculcating high ethical standards of reciprocity at the highest levels of an organization (McDonald, Pak, 1996, 973) which have been… [read more]

Washington Mutual Thesis

Thesis  |  5 pages (1,661 words)
Style: MLA  |  Bibliography Sources: 6


¶ … banking and the current fiscal crisis. Specifically it will discuss the failure of Washington Mutual (WaMu). The financial crisis in the United States is mounting, and it shows no signs of ending anytime soon. The American automakers are seeking a financial bailout, Congress passed a massive bailout for the banking and financial industry that seems to have stalled,… [read more]

Finance There Are Several Key Considerations Thesis

Thesis  |  2 pages (706 words)
Bibliography Sources: 5



There are several key considerations to take into account when deciding whether or not to invest in China. The Chinese federal government and many provincial governments encourage foreign direct investment, which last year totaled $75 billion. A decision on approval to set up a wholly-owned subsidiary will be rendered within 90 days. One exception are the two principle trading cities of Guangdong Province, Guangzhou and Shenzhen, both located to the immediate north of Hong Kong.

China's economy depends on exports, so trade restrictions are relatively minimal. The country is a member of the World Trade Organization (WTO), which has resulted in the removal of most barriers. The country has a well-developed transportation infrastructure in order to get goods to Western markets. There are no export taxes. There are import taxes, however, if some raw material needs to be importer to our facility. In terms of taxation, the foreign enterprise will be subject to a VAT on the increased value of commodities at different stages of production. The amount of the VAT depends on the size of the firm and their accounting system.

With regards to foreign exchange, the yuan is loosely pegged to the dollar. A rigid pegging system was ended in 2005. The yuan is not considered to be a fully convertible currency; yuan is seldom taken outside China, and is not removed from the country on a large scale. Settlement of foreign exchange transactions is conducted through designated banks. Foreign firms are allowed to open the necessary accounts in order to conduct the necessary foreign exchange business. Acquisition of capital within China can be conducted through the domestic banking industry. China has a burgeoning investment banking industry to meet long-term capital needs; the domestic banking system can meet short-term lines of credit through any of a number of large banks. The China Merchant Bank offers several funding options for foreign firms and their suppliers. Because of the lack of convertibility of the yuan, firms will want to keep as much of their earnings in dollars.

China lacks strong labor laws. The weakest parts of Chinese labor law are implementation and…… [read more]

Japan's Economic Crisis Thesis

Thesis  |  3 pages (914 words)
Style: MLA  |  Bibliography Sources: 3


Japan's Economic Crisis

The economic crisis had a profound effect on the Japanese economy. When the real estate bubble burst, real estate values plummeted, economic growth stopped, spending slowed and the country eventually became caught in a deflationary spiral. Moreover, government debt increased, consumer savings increased and eventually the economic system was overhauled to spur a return to growth.

Initially, the most significant impact on the economy of the crisis was the steep reduction in real estate values. The collapse of the real estate market brought real estate values down 85% from their peak levels at the height of the bubble. This resulted in a loss of an estimated $15 trillion in wealth (Kuhn, 2008). The Japanese had invested freely prior to the bubble bursting, with the sense that more money could always be acquired. However, the crash brought about a credit crunch.

One outcome was that the Japanese people stopped spending, and started saving instead. Asset values had plummeted so much that consumers felt the only way to preserve wealth was to save it. Consumer savings rates increased significantly over this period, adding $14 trillion to savings. Private consumption rates dropped from an average of 3.6% growth between 1983-92 to an average growth rate of 1.2% from 1993-2001.

The government had already lowered interest rates to near zero. By 1996 the discount rate was 0.5% and by 1999 3-month paper paid just 0.1%.

However, the credit crunch had rendered lenders unwilling to lend (Burkett, et al., 2003). Even if they had been willing to lend, there was little demand even at the low rates. The real estate bubble, fuelled in part by low rates, had made Japanese hesitant to invest. The result was a deflationary spiral and a liquidity trap.

The traditional means of spurring investment - the lowering of interest rates - had failed in Japan. Deflation had spurred savings. Consumers expected prices to drop, so put off purchases waiting for this to happen. Moreover, they had low expectations of future earnings (Krugman, 1998). Part of this lack of confidence arose from concerns about Japan's aging population, which threatened to suppress future output to levels below the current ones.

Yet, Japan's economy did not collapse entirely. Demand was soft, but GDP did not fall below levels at the peak of the real estate bubble (Kuhn, 2008) on account of government spending and the export market. Domestic demand, however, had softened, which was a sufficient blow to the economy. Massive government spending kept the unemployment rate below 6% throughout the crisis, and this softened the decline in domestic demand (Burkett et al., 2003).

As the crisis dragged onwards, it became apparent that significant economic restructuring was necessary to spur a renewal of growth. The old keiretsu…… [read more]

Managerial Economics - Should I Start Thesis

Thesis  |  8 pages (2,353 words)
Style: APA  |  Bibliography Sources: 2


MANAGERIAL ECONOMICS - Should I Start a New Business?

In today's world, more and more employees become emancipated and are granted more rights and responsibilities. However, at the end of the day, they still have to answer to their hierarchical superior. Several forces of the micro and macroenvironments have motivated the employee to become his own boss. This materialized in… [read more]

Economic Situation Essay

Essay  |  3 pages (1,030 words)
Bibliography Sources: 1


Economic Situation

Cobb, Halstead and Rowe outline a system of economic measurement called the Genuine Progress Indicator (GPI). They argue that the traditional measure of GDP is not an accurate reflection of genuine progress as a society. The GDP measures the value of transactions, but Cobb et al. argue that GDP does not include value judgment. In other words, by focusing on the GDP society and the politicians place emphasis on generating transactions rather than on generating that which is valuable to society. The GPI is essentially an adjustment of GDP to factor in activities that are counted in the GDP calculation but are do not contribute to the betterment of society; and does count those activities that are not counted in GDP but do contribute to the betterment of society. To examine the economic performance over the past eight years we will consider the GDP and then make adjustments to fit the GPI. We will then analyze the merits of the different systems as a means of measuring economic progress.

The GDP has grown in the past eight years. The pace of growth is higher than that of other developed nations, but was lower than in the previous eight years. This is because of two key shocks to the economic system. One was the bursting of the dot-com bubble, which was followed quickly by 9/11. The other is the emerging subprime crisis. These two events have suppressed GDP growth recently, but the economy has still grown.

The first adjustment that we shall make to the GDP for GPI purposes is to consider wealth transfer. The GDP has grown because of an increase in the value of our transactions. However, the net result of those transactions can be found in the current account deficit. This has grown steadily over the past thirty years, the past eight being no exception. What the transfer of wealth overseas represents is a loss of wealth enjoyed here at home. This can be seen in a number of economic statistics. For example, it can be seen in the decline of the manufacturing sector and rising unemployment rates. Those jobs have shifted overseas. We still buy the products, but instead of having the benefits of those purchases travel entirely down the economic chain domestically, the value of those purchases leaves the country. The net transfer of wealth outside of the country is therefore a loss in GPI terms, even though the transactions are considered a gain in GDP terms.

Contributing to this is the increase in consumer debt. Consumers were already increasing their debt in the 1990s and that trend has continued in the past eight years. Consumer debt is included in the GDP not just in terms of the sales that are recorded, but in the interest recorded by the financial services industry. In GDP terms, interest represents wealth creation. Yet GPI argues that the true value of a country is not in paper wealth but in resources. Therefore, the GPI decreases as consumer debt… [read more]

Global Economics and Policies Research Proposal

Research Proposal  |  3 pages (883 words)
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Global Economics

What has caused the U.S. To run a merchandise trade deficit since the early 1980s?

Since 1981 the merchandise trade deficit has expanded due to a rapid expansion of imports. In 1982, the first year for which full statistics are available, the ratio of imports to exports on a census basis was 1.127. By 1994, halfway through the survey period, the ratio was 1.329. In 2006, the ratio was 1.788.

Imports grew 659% from 1982 to 2006.

Among import categories, the largest gainer in terms of raw numbers is Industrial Supplies and Materials. However, the percentage growth in that category was actually less than the growth of Imports overall. Two import categories dramatically outpaced Imports as a whole. They were Capital Goods (except automobiles) at 1081% growth and Consumer Goods (except automobiles) at 1014% growth. All categories of exports grew slower than the Import growth rate.

Is the current account a deficit problem?

The current account deficit is generally considered to be a problem. The current account deficit is essentially financed by foreign entities and they have the ability to choose where they invest their money. Should these entities decided to pull their money out of the U.S. And invest it elsewhere, this could have disastrous consequences for the economy. Additionally, being so highly leveraged leaves the U.S. exposed to shifts in interest rates.

However, the Pitchford Thesis holds that as long as current account deficits are the product of reasonable private market decision-making they are not a problem. The Pitchford Thesis was developed in and has generally been applied to Australia. With regards to the U.S., it is thought that this thesis will also hold true and no catastrophe will occur.

Is the trend of international investment position of U.S. problematic?

The trend is problematic simply because of the size of the deficit. It is unlikely that the world would call in its debts from the U.S., so catastrophe of that nature will not occur. However, the present deficit is not sustainable. The increase in consumer goods imports has been funded largely by consumer debt and the American consumer is reaching debt saturation. Moreover, the government's deficit spending places more burden on public funds. This increase in public deficit in the 00s could potentially negate any Pitchford effect. Also, the size of the U.S. current account deficit means that any structural readjustments will have a significant impact on the world economy.

How is the current account related to a country's business cycle?

The current account is related to the business cycle in many ways. One is that the types of imports and exports will be affected by the…… [read more]

Finance Cambodia's Acleda: From Microfinance to Banking Research Proposal

Research Proposal  |  3 pages (702 words)
Style: Turabian  |  Bibliography Sources: 2


¶ … Finance

"Cambodia's ACLEDA: From Microfinance to Banking" relates that the 'Association of Cambodian Local Development Agencies' was first established as an NGO in 1993. ACLEDA was formed."..as a part of the Small Enterprise and Informal Sector Promotion project" and was initiated by the United Nations Development Program and the International Labor Organization. The focus of the project is stated to have been the "...rehabilitation of Cambodia as it faced decades of civil war and internal conflicts, which destroyed the economy." (nd)


The work of Channy (2003) states that three criteria had to be met before the transformation could take place and first ACLEDA had to be "fully sustainable in four aspects: (1) Programming; (2) Technical; (3) Organizational; and (4) Financial Viability. Secondly, ACLEDA "needed to achieve at least financial break even." (p. 2) Third, ACLEDA "needed to meet the National Bank of Cambodia's criteria to qualify for a banking license..." (Channy, p. 3) Transformation of ACLEDA into a bank is stated to have been "enabled through the technical assistance provided by the Mekong Project Development Facilities financed by the UNDP." (p. 4) Resulting were upgrades to the: (1) existing policies; (2) existing practices; and (3) organizational structure; to ensure that these were "in tune with the international accounting and banking standards." (p.4) the following shows the transactions that took place during the course of this transformation.


Transferred assets and liabilities Received assets and liabilities

Received 45% of capital worth $4 million Transferred 45% of capital worth $4 million

6% equity stake purchased by ACLEDA Staff Association; and Remaining 49% stake shared in equal parts by the IFC, DEG (subsidiary of Germany's Kff) FMO (the Netherland's Development Finance Company) and Triodos Bank, the Netherlands.

The following chart illustrates the holding following the ACLEDA NGO to ACLEDA Bank Limited Transformation.

ACLEDA NGO to ACLEDA Bank Limited Transformation

Source: Cambodia's ACLEDA: From Microfinance to Banking (nd)


It is related that balance was achieved between the banking function and the NGO through "segregation of functions." (Cambodia's ACLEDA: From…… [read more]

International Trade Finance Research Proposal

Research Proposal  |  2 pages (624 words)
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International Finance

Conflict and Free Trade: A Primary Issue in International Finance

In Patrick J. McDonald's article, "Peace through Trade or Free Trade?" The author introduces the connection between conflict or peace and international trade as the primary international finance issue. Citing previous scholarship that suggests the connection between international trade and peace, McDonald challenges the accepted theory by suggesting that states need not only participate in international trade in order to avoid conflict, but that those states that participate in free trade with other states are the most likely to avoid going to war. McDonald reasons that free trade reduces a state's likelihood to go to war because the economic system reduces the amount of power stored with the state in addition to promoting interdependence between states. Free trade, McDonald argues, promotes peace by removing an important foundation of domestic privileged -- protective barriers to trade -- that enhances the domestic power of societal groups likely to support war, reduces the capacity of free-trading interests to limit aggression in foreign policy, and creates the mechanism by which the sate can build supportive coalitions for war" (549).

Thus, McDonald's use of an international economic and financial concept -- free trade -- had numerous implications for international relations and conflict theory.

In fact, the economic issue of free trade is of great importance to the area of international finance. It is the economic structure of a country that allows international trade and the international market to operate, and free trade has historically boosted that international market, allowing the laws of supply and demand dictate the flow of goods and services rather than submitting to the limited economy created by protectivism and trade barriers. A complimentary relationship, conflict, or war, and trade have long been seen as adequate predictors of international camaraderie and alliances. Thus, the issue of conflict between nations has a similarly…… [read more]

Personal and Family Finance Research Paper

Research Paper  |  2 pages (848 words)
Bibliography Sources: 1+


Personal and Family Finance: The Debt Trap savvy consumer only needs to turn on the local news or open up a national newspaper to hear that Americans are burdened with ever-increasing amounts of debt. The reason for this, according to Elizabeth Warren, is not due to a recent phenomenon, like the 'credit crunch' or the fall-out of the subprime mortgage market, but a long-standing issue that relates to what she calls the Two-Income Trap. Warren states that as more women began going to work, rather than use the money to supplement necessities, instead the extra disposable income made luxurious versions of basic necessaries, like larger houses, SUVs, vacations, and going out to eat seem more accessible and desirable. Instead of a small home, a car, a vacation near the home, and home-cooked meals, families used the money coming from the wife's second income to buy pricier versions of shelter, food, entertainment, and transportation.

Because of the new infusion of money into the middle-class, the cost of college educations went up, and families, willing to pay for what has traditionally functioned as the securest route to staying in the middle-class, faced with even higher expenses for their children's tuition than ever before. Then, when ordinary American families suffered a financial crisis, they were saddled with expenses they could not afford. The increase in what Warren calls fixed costs, like a mortgage, is especially damaging, because if one partner loses a job then the family's means of supporting its lavish but seemingly 'normal' middle-class lifestyle can easily collapse, and there is little the family can do to get back on its feet, because it cannot pay the bank or its credit card companies.

The rapid injection of women into the workforce increased the standards and also the demand and thus the cost from everything from houses to college. Also, having two parents work drives up family expenses. Two cars are required, with gas for both commutes. Day care is an expense, and often so is the need to hire a housekeeper, to go out to eat more frequently -- even to dress for the office. But parents do not want to sacrifice an extra salary or a home in a nice area, often rationalizing that they need to stay in places they can ill-afford for the sake of their children's education.

Once upon a time, if the father in a household lost his job or faced a financial setback, the mother could go to work to offset the financial crisis, but now couples are 'addicted' to…… [read more]

Economic Impact of Katrina Impact of Hurricane Term Paper

Term Paper  |  20 pages (6,883 words)
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Economic Impact of Katrina

Impact of Hurricane Katrina on Job Market and Economy Both Locally and Federally

What is the overall impact of Hurricane Katrina on labor markets in affected areas and how that affected both local and the national economy?

When Hurricane Katrina slammed into the Gulf coast, it left behind many lasting affects. Aside from the horrendous loss… [read more]

History of Economic Thought Term Paper

Term Paper  |  8 pages (2,494 words)
Style: MLA  |  Bibliography Sources: 12


¶ … John Maynard Keynes's contributions to economic thought.

John Maynard Keynes is considered to be one of the most prominent figures in economic thought of the 20th century. Keynes's ideas had a deep influence on economics and political theory as well as on theory of government fiscal policies. Keynes supported idea of economic intervention of government, as to his… [read more]

Securitization and Bank Liquidity Term Paper

Term Paper  |  17 pages (4,798 words)
Style: Harvard  |  Bibliography Sources: 15


Securitization and Bank Liquidity

The objective of this work is to examine securitization and how it is currently used in the banking industry with a focus on real estate and the current problems banks are facing recently regarding mortgages and how that banks lend easy money to anyone and then are unable to recover the money. This work seeks to… [read more]

Microeconomics the Science of Economics Term Paper

Term Paper  |  4 pages (1,400 words)
Style: APA  |  Bibliography Sources: 2



The science of economics is based on several principles that support companies and aid them with increasing the efficiency of their operations. These principles often refer to the proper allocation and usage of resources, in order to retrieve the best results. In addition, a major economics axiom is the tendency to use fewer resources and retrieve better outcomes; in… [read more]

Economics Theory Popular Concept Term Paper

Term Paper  |  5 pages (2,089 words)
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Economics Theory popular concept that is used both in macro economic theory, as well as in micro economic theory is that of marginal change. Marginal analysis is therefore one of the most important principles of economic theory, and one must study a few concepts of economic theory before one can proceed. Marginal change can be explained as a small addition… [read more]

Economics Is "The Social Science Concerned Term Paper

Term Paper  |  4 pages (1,354 words)
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Economics is "the social science concerned with the efficient use of limited resources or scarce resources to achieve maximum satisfaction of human material wants" (McConnell, p3, 2004). Although in neoclassical times resources were considered unlimited, today people know that we exist in a finite environment where resources, time and technological means are limited and only through their proper use, we can make sure that most of our needs are satisfied.

This is where the notions of scarcity, choice and opportunity cost intervene. Due to the fact that commodities and services are scarce, choices are required. Scarcity has become a world wide problem as the available resources are insufficient to gratify people's requirements. The resources can be classified into 4 categories: land, labor, capital and entrepreneurial ability. The opportunity cost is the true cost of any scarce good. The opportunity cost is defined as being the value of the thing you give up in order to obtain a good. For example, "the opportunity cost of an action is the highest valued alternative forgone" the Production Possibilities Frontier (PPF) demonstrates the different ways in which we can combine a variety of commodities that can be manufactured given the accessible resources and present technology. The PPF delimitates the frontier among combinations of commodities and services that can be manufactured and amalgamations that cannot. On the PPF, the opportunity cost of manufacturing more of one commodity is the output of the other commodity that has to be forgone. The three coordination tasks of an economy are: How to make use of its resources proficiently, what mixture of commodities and services to manufacture and how much of every commodity to allocate to every individual. This is when the notions of specialization and comparative advantage appear. Specialization is "the concentration on the production of only one good or service, or a few goods or services." The principle of comparative advantage sustains that each state (or individual) should specialize in the manufacturing of the commodity or service in which it is more efficient (or less inefficient).

The demand of a commodity or service is the amount customers are ready and able to acquire in a defined period of time at a specific cost. The law of demand states that "the higher the price of a good, the smaller is the quantity demanded, other things remaining the same." The supply of a commodity or service is the amount producers are ready to produce and release on the market in a defined period of time at a specific price. The law of supply states that "the higher the price of a good, the higher is the quantity supplied, other things remaining the same." We can also encounter the notions equilibrium price and the equilibrium quantity, as presented in the above figure. "An increase in demand causes an increase in both the equilibrium price and the equilibrium quantity. A decrease in demand causes a fall in both the equilibrium price and the equilibrium quantity. A rise in supply causes a… [read more]

Dollar Depreciation Economic Effects of U.S Term Paper

Term Paper  |  11 pages (3,472 words)
Bibliography Sources: 5


Dollar Depreciation

Economic Effects of U.S. Dollar Depreciation

News on the effects of the deprecation of the U.S. dollar depends on the source. Opinions on the effects of U.S. dollar depreciation range from gloom and doom to hardly any effect at all. The depreciation of the U.S. dollar has an effect on the willingness of people to incur major debt… [read more]

Ici Bank: A Growth Stock Term Paper

Term Paper  |  11 pages (2,899 words)
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ICI Bank: A Growth Stock for the Future

There are many unknown factors in the U.S. economy that will determine the success of any stock. The year 2007 is over 1/4 of the way complete and it is too early to see forecasts for 2008. We cannot determine the growth rate of the U.S. economy. Trends up to this point… [read more]

Finances Critical Book Reviews "America's Oligarchy" Johnson Book Review

Book Review  |  10 pages (2,634 words)
Bibliography Sources: 10



Critical Book Reviews

"America's Oligarchy"

Johnson, Simon., & Kwak, James. (2010). The wall street takeover and the next financial Meltdown. New York: Pantheon Books.

Paperback: $15.95

ISBN: 030747660X

Knopf Doubleday Publishing Group

Simon Johnson is one of the most frequently cited economists of the 21st century and was considered a "go to guy" during the recent economic meltdown. Simon… [read more]

My Internship in SCFB Term Paper

Term Paper  |  12 pages (3,958 words)
Bibliography Sources: 0


Internship at SCFB

I worked in the Standard Chartered First Bank in Seoul, Korea. At the bank's headquarters, I worked in the Risk Finance Department. The Standard Chartered first Bank began its existence in the year 1929 as Chosun Savings Bank. In 1930, it introduced the first installment deposit product in Korea. In 1950, the bank changed its name to… [read more]

Economic Theory Since the Great Research Paper

Research Paper  |  5 pages (1,748 words)
Bibliography Sources: 5


This is significant, because it is a sign that various protectionist policies are ineffective at addressing the underlying challenges facing the nation. ("Hawley Smoot Tariff," 2011) (Griswold, 1998)

Clearly, Keynesian economic policies can stabilize the economy. Yet, they are not the end all solution to different economic challenges. While, supply side economics can help to address certain aspects of the different issues facing the nation. However, in both cases they have played a role in helping to contribute to the consistent amount of trade deficits. As a result, some individuals have called for protectionist policies to deal with these challenges. The problem is that this will only make the underlying economic situation worse. Therefore, an approach needs to be taken that will look at the different views and create some kind of balanced approach when dealing with these kinds of issues. (1,651 words)


Hawley Smoot Tariff. (2011). Info Please. Retrieved from: http://www.infoplease.com/ce6/history/A0823033.html

New Keynesian Economics. (2011). Investopedia. Retrieved from: http://www.investopedia.com/terms/n/new-keynesian-economics.asp

Griswold, D. (1998). America's Maligned Trade Deficit. Cato. Retrieved from: http://www.cato.org/pub_display.php?pub_id=3655

Lipsey, R. (2007). The Keynesian Approach. Oxford University Press. Retrieved from: http://www.oup.com/uk/orc/bin/9780199286416/01student/interactive/lipsey_extra_ch25/page_03.htm

MacEnzie, B. (2011). U.S. Trade Deficit. IIP Digital. Retrieved from: http://iipdigital.usembassy.gov/st/english/article/2011/07/20110713153813eiznekcam0.4696314.html#axzz1T1KLxiAJ

Roubini, N. (1997). Supply Side Economics. NYU. Retrieved from: http://pages.stern.nyu.edu/~nroubini/SUPPLY.HTM… [read more]

Economic History of America Research Paper

Research Paper  |  8 pages (2,584 words)
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¶ … United States Central Bank

The economic history of the United States from the time since the Reconstruction period of the Civil War has certainly varied through epochs of both prosperity and of despair. Analysis of the trends which influenced and have been made manifest during this time period indicate the interrelation of several events, people, agencies and structures… [read more]

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