Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Current Federal Reserve monetary policy will deter U.S. growth - Thesis Proposal Example

Comments (0) Cite this document
Abstract US has officially entered into recession by the end of 2007 and it also resulted into an increased support from the government in the form of equity injection from the government. In order to save the financial system, government injected new funds while at the same time also executed an expansionary monetary policy by cutting interest rates and increasing money supply…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.9% of users find it useful
Current Federal Reserve monetary policy will deter U.S. growth
Read Text Preview

Extract of sample "Current Federal Reserve monetary policy will deter U.S. growth"

Download file to see previous pages The overall debt position in US is also increasing thus making US Dollar as a less favorable global currency making it more difficult to make it preferred currency for conducting the global trade. All these factors therefore may render the effectiveness of the monetary policy as null and monetary policy alone may not result into desired results. Introduction US is going through the recovery phase of its business cycle after emerging from one of the worst economic crisis of modern history. What started as the subprime mortgage crisis soon emerged as a full fledge economic recession hampering almost all sectors of the economy besides resulting into depressed growth for the economy. The resulting collapse of the institutions therefore prompted government and federal reserve board to intervene into the economy and devise policies and procedures which could actually allow the US economy to resurrect on its own. Government injected money into different institutions in order to ensure that the liquidity position of the firms remain good while at the same time ensuring that the capital base of financial institutions is strong enough to sustain the losses. On the other hand, FED has also undertaken different policies in order to stimulate the economy while at the same time ensuring that the adequate aggregate demand is maintained in the economy. As a result of this, FED undertook steps such as slashing of the interest rates and quantitative easing as well as other measures to ensure that the economy is put back on track. However, these efforts may actually prove as detrimental for the overall growth prospects of the economy. This could be for number of reasons including commodity inflation which could result into higher core and headline inflation, inflation may be inevitable due to low interest rates thus effectively eroding the growth, higher debt burdens as well as the monetary expansion policy therefore may not serve the purpose. This paper will attempt to argue and discuss that the current policies of Federal Reserve may deter the economic growth in US. Commodity Inflation It has been argued that the correlation between the prices of different commodities is increasing over the period of time. Higher level of correlation between the prices of different commodities therefore suggests that the prices are interlinked and an increase in the prices of one commodity could lead to a chain event of increasing the overall price increase for other commodities. Stronger positive correlation between the prices of the commodities therefore suggest there are different factors which are effectively affecting the dynamics of different commodity markets and are creating a unifying impact on the market. (Derby) Commodities often serve as the input for the final goods and services therefore higher demand from the emerging economies such as China and India has actually fuelled the commodity prices also. Higher commodity prices therefore are resulting into higher prices for the finished products and therefore causing the inflation in the core and headline inflation also. It’s also because of this reason that food inflation is also increasing along with affecting inflation in other goods. (Calvo) Fed has adapted an inflationary monetary policy thus further fuelling the chances of having higher inflation. Higher inflation therefore can effectively ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(“Current Federal Reserve monetary policy will deter U.S. growth Thesis Proposal”, n.d.)
Retrieved from
(Current Federal Reserve Monetary Policy Will Deter U.S. Growth Thesis Proposal)
“Current Federal Reserve Monetary Policy Will Deter U.S. Growth Thesis Proposal”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Current Federal Reserve monetary policy will deter U.S. growth

The Current Protection in England and Wales

Vis-a-vis the burden of the prosecution of proving the elements of the offense, there is the set of human rights to which the suspect is entitled and which must be respected by the police having custody of the suspect. These human rights range from the investigation stage to that of the trial stage of the criminal prosecution process and are provided partly by the conventions of the Human Rights Act of 1998. [The Stationery Office, 1998]
There is a great difference in law between the fundamental rights and liberties of individuals and the enforceability of rights and safeguards. The safeguards could only be made available through legislation and the provision of sufficient resources to give meaning thereto as well as make the...
11 Pages (2750 words) Research Proposal

United States Foreign Policy from 1945-1991

American Presidents presiding over some key events in history, such as the Cuban Missile Crisis, The Cold War, The Vietnam War, etc., were hindered from acting as public representatives due to pressure from the military-industrial complex. John Kennedy, Lyndon Johnson, Ronald Reagan, George Herbert Walker Bush, and George W. Bush – all of them were subject to these opposing interests. But eventually, the corporate-government nexus proved too powerful; and in this sense, American Presidents after the Second World War were largely restricted and powerless to uphold their higher personal values. Most of the strategic moves on part of the United States after the end of the Great War were directly in response to an anticipated th...
11 Pages (2750 words) Essay

Comparison of the Cold War International System to the Current International System

An example is that of the Korean War (1950-53) which is said to transform the nature of the Cold War, while its initial impact was to solidify the division of the world into political, military, and economic spheres. Take Germany for instance where imperialism was a victim challenged by the historians for the destruction of the German Government along with its supporters used to conduct (Keylor, 2001, p. 44). That indicates economic expansion and territorial acquisition has always been a problem promoted since the First World War. Even in the 1920s, it was fashionable to declare the German empire on the threshold of the ‘Great War’ (Keylor, 2001, p. 44).

Europe in the global context remained tense and divide...
8 Pages (2000 words) Article

The Role of Telecommunications in Growth

If information is significant to advancement, then telecommunications, as a way of sharing information is not only a relationship between people, although a connection in the sequence of the advancement processes itself. The role of telecommunications in broadcasting information can be predominantly important in rural regions where other methods of acquiring and transmission information for instance personal contact, transport, and postal services are expected to be less available.
Distance signifies time, in an all the time more time-conscious world. In economies that rely forcefully upon agriculture or the mining of resources, remoteness from urban markets has usually been improved only with the setting up of enhanced trans...
23 Pages (5750 words) Assignment

The Growth of the Service Industry

The expansion of the service sector has unquestionably generated economic prosperity, but it has eminently contributed to social injustice and inequality. Consequently, I believe that while the growth of the service industry has great economic intuition, it is eventually socially detrimental and distancing society from achieving paradigms of social equilibrium.
Service, by definition, is the exchange of a commodity that has no tangible form; whereas industry is described as the people or organizations engaged in a particular type of enterprise. The service industry is then simply defined as an aggregation of commercial entities that provide services rather than physical objects. The non-material nature of services can be dist...
9 Pages (2250 words) Case Study

Innovation and Growth

Although there is a large amount of literature about innovation in organizations, there is very little on the management style that should promote innovation. (Amar, 2002, p. 14) While innovation is a subject that has evoked keen interest, it is also a subject that has failed to uncover the secrets of what fires innovation in an organization. Researchers have focused on three major areas in relation to innovation in an organization.
For example, the adverse external environment has been found to encourage creativity and innovation. This, along with organizational structure, is likely to play a role in determining the level of innovation that exists in an organization. A study by Russell(1990) has revealed that innovation requ...
14 Pages (3500 words) Coursework

How Does the US Media Effects Evolve in Singapores Current Media

Lewis and Slade (2000, p. 223) in their critical evaluation of the effects of media communication on the audience argue that media effect is achieved incongruent with social context. Their study recounts the experiment on the influence of television on identity in Singapore indicates that US social values and Singaporean values greatly differ from each other. The sharp differences in program content have a negative influence on the audience because Chinese raised Singaporeans value marriage, social values, and collectivism whereas US social culture involves career, family and the struggle to balance the two. Therefore the question of US media's influence to destabilize Singaporean national identity is limited. This view is emphasi...
6 Pages (1500 words) Assignment

Organization and Functions of Federal Law Enforcement Agencies

Threats may either appear in the form of terrorism or from other intelligence groups or from the espionage. It may arise within the country, against the existing government or social systems. Though most of the federal law enforcement groups are investigative groups, they are not only focused on investigations but stand for the people. One can see that the importance of the federal agencies is growing day by day because the threats from militants and others have considerably increased. Such kinds of federal law enforcement agencies include Federal Air Marshalls, Secret Service, FBI, Untouchables, C.I.A and Federal Corrections etc. The organization and functions of these agencies vary in different fields and can be cited in the fol...
7 Pages (1750 words) Case Study

Current Trends in the Marketing Communications Environment

Traditional marketing communication functions such as advertising and public relations have also extended over the internet, as companies utilize the web to reach target audiences. One example of this is Toyotas marketing campaign of its Scion brand in 2006 in, a website is set up to for kids age 8-15 in order to encourage greater interaction and induce brand loyalty (Cousineau & Scurry 2006). According to Cousineau & Scurry, with websites such as these where consumers can try the brands, in the kid's case—test driving the Scion—consumers interests are aroused which make them seek out [a] brand and interact with it on an ongoing basis rather than actively avoid it (2006, 37).

An e-mail h...
13 Pages (3250 words) Assignment

Information Security Policy of Organization

In the modern age of information technology, there are many threats created for organizational information. Organizations need a security model that has the capability to handle and secure our information reserves. Technical administrative safety /security measures like security plans, actions and procedures are the general practices for the organizational information security procedures. The attentiveness of producing actions is concerned by the organizations to an appreciably smaller level, on the other hand at the same time these are weighed up as being further efficient organizational actions than technical administrative ones. Information security encompasses organizational features, officially authorized aspects, institution...
6 Pages (1500 words) Research Paper
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Thesis Proposal on topic Current Federal Reserve monetary policy will deter U.S. growth for FREE!

Contact Us