Monetary Policy (Macroeconomics) - Research Paper Example

Download file to see previous pages... One of the impacts could result from a spike in Treasury yield, creating a need to raise government spending. This has a direct impact on social development as it involves spending more tax-payer’s money (http://www.ny.frb.org, n.p).
In relation to societal issues impacted by the policy, the article indicates that such changes could spike up credit excesses leading to a scenario of financial instability as witnessed during the period of the Great Recession (http://www.ny.frb.org, n.p). The financial instability could be as a result of jeopardized debt ratios as well as increased amount of internal debts.
On the other hand, scaling back the Federal Reserve’s Economic value has a great impact on Emerging Market Economies (EME’s). To begin with, it would lead to the reduction of the Federal Reserve’s Liquidity Cushions on foreign exchange creating a scenario whereby foreign investors withdraw their investment capitals. In addition, it would lead to a scenario of jeopardized financial stability within foreign markets thus creating vulnerability in their levels of development (http://www.ny.frb.org, n.p).
"U.S. Monetary Policy and Emerging Market Economies - Federal Reserve Bank of New York." U.S. Monetary Policy and Emerging Market Economies - Federal Reserve Bank of New York. N.p., n.d. Web. 20 July 2014. ...Download file to see next pagesRead More