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

U.S. Monetary Policy and International Implications - Essay Example

Comments (0) Cite this document
Summary
This paper talks that the effects of the headwinds experienced by the U.S. economy include different aspects of the country’s economy as well as the economy of other countries in the European continent. The effects of crisis have been intensified by the activities of the households and business groups…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.6% of users find it useful
U.S. Monetary Policy and International Implications
Read TextPreview

Extract of sample "U.S. Monetary Policy and International Implications"

Download file to see previous pages e economy is growing seems insufficient to initiate and sustain considerably large up-gradation in the current job market, the FOMC has decided to take measures and modify its financial policies to bring significant changes in the employment levels. The rate of unemployment has been recorded at a high 7.8 percent in 2012, which is much higher than the projections made by analysts as the normal level of unemployment in the long run (Bernanke). There is a large level of slack in resources in the U.S. and it is being persistently maintained with high margins. This supports the restrained rates of inflation in the U.S. although there are short term fluctuations in prices of goods and services in the economy. Consumer price inflation at present shows lower than the expected level that is required to achieve the long run objective of 2 percent as set by the Federal Reserve (Press Release). Federal Reserve's Recent Policy Actions The monetary policy strategies of the Federal Reserve are steered by the dual mandate of promoting maximum level of employment and achieving stability in prices (Mayer 184). With the inadequate progress found in the US job markets coupled with subdued inflationary pressures, the Federal Open Market Committee (FOMC) has taken certain important actions in 2012 with the aim of providing “additional policy accommodation” (Bernanke). In September of 2012 information collected from reliable sources continued to let out weak signals regarding labor markets. There were also no sign of noteworthy inflation pressures. This induced the FOMC to take additional steps for making provisions of policy accommodation. The span of time over which the FOMC has kept its expectations “to maintain exceptionally low levels of the federal funds rate” (Bernanke) has...
This essay stresses that while the asset purchase program of the FOMC is aimed at increasing employment levels and improve job market conditions along with stabilizing the price of commodities in the U.S. economy, this policy action also has certain significant negative impacts. In my opinion, although the quantitative easing puts a positive influence on the economic performance of the country, the government has to increase subsidy on labor wages and increase demand for labor by the producers. An increase in wages would improve demand conditions in the economy which would increase productivity levels. While improving demand conditions in the economy, this process would take care of the problem of excess liquidity in the economy.
This paper makes a conclusion that mixed views have been provided in the debate revolving around the asset purchasing by the FOMC. In terms of efficiency of the quantitative easing program, most of the members of the Committee have agreed that this policy creates a meaningful result by easing financial circumstances thereby accelerating the process of economic growth. According to these observers, less credit constraints and lower rates of interest would increase investment by investors. On the other hand, some members of the Committee consider this policy as having a diminishing impact on the economic condition of the country. This is because quantitative easing lessens the financial stress in the short term, but, no consensus has yet been reached with regard to the long term effects of the assets purchasing policy. ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“U.S. Monetary Policy and International Implications Essay”, n.d.)
U.S. Monetary Policy and International Implications Essay. Retrieved from https://studentshare.org/macro-microeconomics/1478683-us-monetary-policy-and-international-implications
(U.S. Monetary Policy and International Implications Essay)
U.S. Monetary Policy and International Implications Essay. https://studentshare.org/macro-microeconomics/1478683-us-monetary-policy-and-international-implications.
“U.S. Monetary Policy and International Implications Essay”, n.d. https://studentshare.org/macro-microeconomics/1478683-us-monetary-policy-and-international-implications.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF U.S. Monetary Policy and International Implications

Implications of Mobile Communication on Society

Lifestyle has changed and the mobile phone is gradually becoming a part of the culture of modern societies (Hulme & Peters).
Voice transmission is no longer the only way that mobile phones are used. It is a multi-purpose device. Mobile phone networks have become a new platform through which data, information and transactions are exchanged. It serves as an alarm clock, an address book, an entertainment device through games, and to a text message.
At the end of 2003, there were 1.35 billion mobile subscribers worldwide compared to 1.2 billion fixed line users (Shaping the Future Mobile Information Society). It has undoubtedly changed the lives of the people and the biggest factor which induces the purchase of mobile ph...
6 Pages(1500 words)Essay

International Trade Theory

 Further to this, it is also believed that international trade can bring substantial economic welfare to the countries however still most of the countries do not view it as a favorable thing. Despite having a very promising and bright outlook, international trade has been largely viewed with suspension and it is because of this that governments impose barriers to restrict international trade. There can be many reasons behind this act of imposing restrictions or blocking international trade however there are also benefits on the other side too.

International trade has driven the attention of many of the brilliant minds in economics therefore the origins of the economic theory on international trade owe much to the c...
6 Pages(1500 words)Case Study

Globalization and International Business: Starbucks Corporation

The Small Business Encyclopedia defines globalization as the process by which the economies of countries around the world become increasingly integrated over time. This integration occurs as technological advances expedite the trade of goods and services, the flow of capital, and the migration of people across international borders (globalization, Answers.com).
The shreds of evidence of globalization are all around us. For example, Hill (2005) cites an example of an American driving a car designed and produced in Germany that was assembled in Mexico from components made in Japan fabricated by Korean steel and Malaysian rubber. The car is filled with gasoline from oil pumped from off the coast of Africa, at a service station o...
12 Pages(3000 words)Case Study

Potential Benefits of International Trade

Conditions set for international trade have also changed in various nations. Today, interdependent is evident due to various global distributions. Examples are; transportation systems, the internet as well as satellite communication systems.
The establishment of WTO (World Trade Organisation) promoting equity in nations’ status, the international monetary Fund (IMF) besides the World Bank, has made stronger the anchorage of international trade. These organisations aid in reducing the trade barriers across boundaries. Nelson (2000). This is a study set out to make a comprehensive and vivid answer to the question, “Which are the benefits of international trade and why are trade restrictions imposed by countries?&rdq...
6 Pages(1500 words)Coursework

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

International Security Studies: Examination

Globalization affects international security in the sense that problems involving terrorism, the environment, religious extremism, weapons of mass destruction, and the economic crises have become more universal and widespread in character (Ivanov “Article”). As a result, these issues pose a greater threat to national and international stability and safety. More lives are now affected by threats to international security; these threats did not seem too ominous before the entry of globalization. Consequently, some extremists justify the use of mass weapons of destruction in order to guarantee their security. And as globalization continues to expand and to grow bigger as a phenomenon, threats to international security are...
7 Pages(1750 words)Assignment

International Law: Child Soldiers

Using children to fight wars is not only morally abhorrent but very bad very the physical and mental health of the children in question. That is in part why a series of international laws and treaties have come into effect to try to deal with this scourge. But the issue is more complicated than that. While child soldiers are victims of war crimes, they too can also perpetrate serious breaches of the law of armed conflict. Under normal circumstances, individuals who commit such acts, be they combatants or not,2 would be vulnerable to prosecution. However, because children in such situations are victims as well as perpetrators and because of the special protections afforded to children under international law, many have questioned w...
8 Pages(2000 words)Case Study

International Affairs v. Liberalism

As a matter of fact, Hoffman’s statement that “international affairs is the nemesis of liberalism” has a grain of truth in it and this is especially so after the 9/11 incident.
There are two schools of thought or perspectives that are used to view international affairs: liberalism and realism. The study of these two perspectives is significant to the idea posed by Stanley Hoffman because they determine the reasons why international affairs, according to him, does not only see eye-to-eye with liberalism but seems to stand on the opposing side of it.
Liberalism can be defined as having four elements: citizens; the legislature; property rights, and; a market-driven economy (Dunne 186). Realism, on the othe...
6 Pages(1500 words)Assignment

European Union Policy: Turkey

...Running Head: European Union.... Topic: European union policy Order#: 377392 Topic: European union policy Profile of Turkey-history, geography and population: “Area: Approx 780,000 sq km (300,000 sq miles) Population: 71.9m (July 2008 est) Capital city: Ankara People: Majority Turks. Minorities recognised under the Turkish Constitution: Jews, Armenians and Greeks. Other ethnic peoples include Kurds, Circassians and Bosnians. Language: Turkish (official), Kurdish Religion: Muslim Currency: Turkish Lira (TL) Government: Parliamentary republic. Membership of international...
9 Pages(2250 words)Case Study

International Business: World Economic Forum and Davos 2010

... sense power consumption and power quality. A modest sheet of paper, 50,000 thinner than human hair, when stacked, nets a material 500 times stronger than steel and is changing the way airplanes, automobiles and electronics are made (Alpern, 2009). International Technological collaborations are taking place in the form of strategic alliances, joint ventures and intimate supplier-producer relationships. Such collaborations include activities such as joint development agreements, technology sharing and R&D contracts amongst others (Rycroft, 2002). ICT has pervaded every aspect of business and today the value chain depends on the use of technology to link the customers and suppliers. In the current dynamic and global markets, technology...
7 Pages(1750 words)Coursework
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 Essay on topic U.S. Monetary Policy and International Implications for FREE!

Contact Us