...experienced during the great depression. Because of two factors: the collapse of the housing bubble with a significant decline in housing price and a sharp contraction in the construction industry, caused sever Great Recession. In order to stimulus economics, the Federal Reserve took both conventional and un conventional actions, reducing interest rates ti record lows and providing recession (Did the American Recovery and Reinvestment Act of 2009 Create Jobs 146-147). While the ARRA did not achieve tis initial goals, many including President Obama, consider it a major success. Actually is it very hard to support the claim that the ARRA was responsible for the turnaround in GDP growth early last year. This is because the turnaround was from productivity growth, which is part of the supply side of the economy. The federal debt crisis is a contrived one; the real debt crisis is a household sector debt crisis, which is being resolved through a generational deleveraging process, which cut demand in the shot term and is effectively mitigated by necessary short-run federal deficits. The constraints for running large deficits, is inflation. In a deleveraging, inflation is desired, and vital in fact. So short-run deficits in a deleveraging recession are an important tool. However everyone agrees that the United States would be better off if it were able to reduce its deficit and eventually its debt, especially after the economy returns to more prosperous conditions. (Can U.SS deficit...
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...European M&A Construction Monitor Trends for 2011–2013: Defaults, Deleveraging, Diversification and DBFM Deloitte Real Estate – European M&A Construction Monitor 2012 December 2012 European M&A Construction Monitor is a publication edited and distributed by Deloitte. Director Jurriën Veldhuizen, partner Real Estate, The Netherlands Kees Zachariasse, M&A partner Real Estate, The Netherlands Coordinated by Harm Drent Hinse Boonen Steven Vrendenbarg Laurens Kil Contact Real Estate Department, Deloitte Netherlands Phone: +88 288 3281 Fax: +88 288 9752 December 2012 Contents 1. Introduction 2. Looking back 3. Going forward 4. European construction and infrastructure group contacts 5 6 12 19 European M&A Construction Monitor Trends for 2011–2013: Defaults, Deleveraging, Diversification and DBFM 3 4 1. Introduction Market trends: Defaults, deleveraging, diversification and DBFM The number of deals decreased in 2011 compared with 2010. Uncertainty in the market was a major factor for this decline. Although uncertainty remains omnipresent in 2012, M&A activity is expected to increase, even though the average deal size will be smaller compared with previous years. Small and medium-sized companies are the main targets, provided they are of interest to the limited number of larger construction companies active in the European M&A market. Survival techniques – including deleveraging, diversification and reorganisations – have been and will continue to be applied...
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...Recession In economics, a recession is a business cycle contraction. It is a general slowdown in economic activity.[1][2] Macroeconomic indicators such as GDP (gross domestic product), investment spending, capacity utilization, household income, business profits, and inflation fall, while bankruptcies and the unemployment rate rise. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock or the bursting of an economic bubble. Governments usually respond to recessions by adopting expansionary macroeconomic policies, such as increasing money supply, increasing government spending and decreasing taxation. Definition In a 1975 New York Times article, economic statistician Julius Shiskin suggested several rules of thumb for defining a recession, one of which was two down consecutive quarters of GDP.[3] In time, the other rules of thumb were forgotten. Some economists prefer a definition of a 1.5% rise in unemployment within 12 months.[4] In the United States, the Business Cycle Dating Committee of the National Bureau of Economic Research (NBER) is generally seen as the authority for dating US recessions. The NBER defines an economic recession as: "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment...
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...Good evening everyone! It is a pleasure to be here. This evening I will first briefly review the U.S. and global economic outlook. I will then discuss the basic rationale underlying the Federal Reserve's recent policy decisions and place these actions in an international context. what happens when there is a surplus of imports brought into the U.S.? what is a specific product with an import surplus, and the impact that has on the U.S. businesses and consumer involded. The U.S. economy has faced significant headwinds, and, although the economy has been expanding since mid-2009, the pace of our recovery has been frustratingly slow. The headwinds include the effects deleveraging by households, the still-weak U.S. housing market, tight credit conditions in some sectors, spillovers from the situation in Europe, fiscal contraction at all levels of government, and concerns about the medium-term U.S. fiscal outlook. In this environment, households and businesses have been quite cautious in increasing spending. Accordingly, the pace of economic growth has been insufficient to support significant improvement in the job market; indeed, the unemployment rate, at 7.8 percent, is well above what we judge to be its long-run normal level. With large and persistent margins of resource slack, U.S. inflation has generally been subdued despite periodic fluctuations in commodity prices. Consumer price inflation is running somewhat below the Federal Reserve's 2 percent longer-run objective, and...
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...expansion strategies – notably borrowing in foreign capital markets to finance the aggressive international expansion of Icelandic investment companies – that made them vulnerable to the deterioration in global financial markets. They had also grown to be too big for the government to rescue. When access to foreign capital eventually closed, the banks failed. Non-financial firms and households were also vulnerable to the deterioration in global financial conditions, having taken on a lot of debt in recent years based on inflated collateral values. In some cases, the debt was foreign-currency denominated, without matching foreign-currency assets or revenues. This essay examines the Iceland Financial Crisis and analyzes the cause, effect, and recovery. Effects The current situation of the economy has severely affected many Icelandic business and citizens in the country. The replacement of Nyi Laandsbanki for the old Landsbanki , has caused the loss of 300 employees due to a radical restricting of the organization which intended to minimize the bank's international operations. Similar job losses happened at Glitnir and Kaupthing. The job losses or unemployment are compared with the 2,136 registered and 495 advertised vacancies in Iceland at the end of August 2008. There are also other company affected in...
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...July 2011 European growth and renewal: The path from crisis to recovery The McKinsey Global Institute The McKinsey Global Institute (MGI), the business and economics research arm of McKinsey & Company, was established in 1990 to develop a deeper understanding of the evolving global economy. Our goal is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions. MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our “micro-to-macro” methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy. MGI’s in-depth reports have covered more than 20 countries and 30 industries. Current research focuses on four themes: productivity and growth; the evolution of global financial markets; the economic impact of technology and innovation; and urbanization. Recent reports have assessed job creation, resource productivity, cities of the future, and the impact of the Internet. MGI is led by three McKinsey & Company directors: Richard Dobbs, James Manyika, and Charles Roxburgh. Susan Lund serves as director of research. Project teams are led by a group of senior fellows and include consultants from McKinsey’s offices around the world. These teams draw on McKinsey’s global network of partners and industry...
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...McKinsey Global Institute July 2013 Game changers: Five opportunities for US growth and renewal The McKinsey Global Institute The McKinsey Global Institute (MGI), the business and economics research arm of McKinsey & Company, was established in 1990 to develop a deeper understanding of the evolving global economy. Our goal is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions. MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our “micro-to-macro” methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy. MGI’s in-depth reports have covered more than 20 countries and 30 industries. Current research focuses on six themes: productivity and growth; natural resources; labor markets; the evolution of global financial markets; the economic impact of technology and innovation; and urbanization. Recent reports have assessed job creation, resource productivity, cities of the future, the economic impact of the Internet, and the future of manufacturing. MGI is led by two McKinsey & Company directors: Richard Dobbs and James Manyika. Michael Chui, Susan Lund, and Jaana Remes serve as MGI principals. Project teams are led by the MGI principals and a group of senior fellows, and include consultants from...
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...Secular Stagnation: Facts, Causes and Cures Edited by Coen Teulings and Richard Baldwin CEPR Press a A VoxEU.org Book Secular Stagnation: Facts, Causes, and Cures A VoxEU.org eBook Centre for Economic Policy Research (CEPR) Centre for Economic Policy Research 3rd Floor 77 Bastwick Street London, EC1V 3PZ UK Tel: +44 (0)20 7183 8801 Email: cepr@cepr.org Web: www.cepr.org ISBN: 978-1-907142-77-2 © CEPR Press, 2014 Secular Stagnation: Facts, Causes, and Cures A VoxEU.org eBook edited by Coen Teulings and Richard Baldwin CEPR Press abcde Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research (CEPR) is a network of almost 900 research economists based mostly in European universities. The Centre’s goal is twofold: to promote world-class research, and to get the policy-relevant results into the hands of key decision-makers. CEPR’s guiding principle is ‘Research excellence with policy relevance’. A registered charity since it was founded in 1983, CEPR is independent of all public and private interest groups. It takes no institutional stand on economic policy matters and its core funding comes from its Institutional Members and sales of publications. Because it draws on such a large network of researchers, its output reflects a broad spectrum of individual viewpoints as well as perspectives drawn from civil society. CEPR research may include views on policy, but the Executive Committee of the Centre does not give prior...
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...Quantitative Easing and the American Economy: How Saving is Saving Us From Inflation Mark Nasca „12 Colgate University April 30th, 2012 Abstract Following the Great Recession (2007-09), the Federal Reserve (Fed) utilized monetary policy instruments that had never been used in previous economic recoveries. With interest rates near zero, the Fed undertook rounds of quantitative easing (QE), a non-standard policy, in an attempt to stimulate the economy and help bring the nation out of the recession. In this study, the theoretical model presented by Nasca (2011) will be expanded to show that price level can be stabilized when saving and the money supply increase in tandem, all else constant. Following the theoretical discussion, this study will then utilize an intertemporal model with heterogeneous agents to describe the U.S. economy in order to analyze factors affecting consumer saving decisions when QE policies are enacted following an economic crisis. The goal of this model is to show how the saving decision is affected by the enactment of QE in a crisis environment, given the lower prevailing interest rate scenario and elevated levels of economic instability. This study finds that the increase in saving rate observed in the unfavorable rate environment can potentially be attributed to the increased uncertainty in future income expectations and heightened levels of risk aversion that are characteristic of a post-crisis economy. This serves as a theoretical justification for...
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... | Sep | 0.42 | | Oct | 0.40 | | Nov | 0.40 | | Dec | 0.40 | | * Interest rates at the end-period are as at the end of the year or month or at the date indicated. * Interbank rates are the closing offer rates quoted by money brokers. * Rate is quoted as % p.a. https://secure.mas.gov.sg/dir/domesticinterestrates.aspx Further Details On Singapore Economy: • The economic outlook for Singapore remains uncertain, at best, as we enter into 2012. European debt debacles, sluggish US job market recovery, potential slowdown of the Chinese economy may continue to be drag factors this year. Domestically, concerns amidst rising costs of accommodation and transportation are likely to render inflationary pressures somewhat well supported in 1H 12. Nevertheless, we are keeping our 3.0% real GDP growth forecast for 2012 (MTI has a growth forecast of 1-3% this year) supported by the services and pharmaceutical sectors. In addition, we think Singapore could still avoid a technical recession in 1Q 12. Henceforth, we do not expect inflation to remain high throughout 2012 as slowing economic growth might trickle down into slower wage growth and thus restraining some purchasing power for the high end durables...
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...assumption that debt sustainability can be achieved through a mix of austerity, forbearance and growth. The claim is that advanced countries do not need to resort to the standard toolkit of emerging markets, including debt restructurings and conversions, higher inflation, capital controls and other forms of financial repression. As we document, this claim is at odds with the historical track record of most advanced economies, where debt restructuring or conversions, financial repression, and a tolerance for higher inflation, or a combination of these were an integral part of the resolution of significant past debt overhangs. JEL Classification Numbers: E6, E44, F3, F34, G1, H6, N10 Keywords: Financial crises, sovereign debt crises, deleveraging, credit cycles, financial repression, debt...
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...equipment manufacturing company, which vertically integrated the subsidiaries operations. Over the next 67 years the company increased revenues and profits. Unfortunately, with the recent downturn in the American economy coupled with several natural disasters, FGI has for the first time experienced a decline in profits and was forced to lay off one-third of its workforce. Although residential home sales have dropped the health care industry is still experiencing healthy demand. The purpose of this paper is to provide recommendations to TMS for increasing revenue, achieving ideal production levels, determining how fixed and variable costs should be adjusted to maximize products and finally to identify methods to reduce costs. Since the economic decline FGI has repossessed more than 500 pieces of equipment. FGI has bundled the pieces together and has determined an average price for each piece. The present selling price is $1,732. At that price FGI could sell 182 units for an aggregate purchase price of $315,224. If FGI lowers the price to $1,634.3 they could sell 350 units for an aggregate purchase price of $572,005. Based on the data provided by...
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...Understanding Financial Crises: Causes, Consequences, and Policy Responses Stijn Claessens, M. Ayhan Kose, Luc Laeven, and Fabián Valencia By now, the tectonic damage left by the global financial crisis of 2007-09 has been well documented. World per capita output, which typically expands by about 2.2 percent annually, contracted by 1.8 percent in 2009, the largest contraction the global economy experienced since World War II. During the crisis, markets around the world experienced colossal disruptions in asset and credit markets, massive erosions of wealth, and unprecedented numbers of bankruptcies. Five years after the crisis began, its lingering effects are still all too visible in advanced countries and emerging markets alike: the global recession left in its wake a worldwide increase of 30 million in the number of people unemployed. These are painful reminders of why there is a need to improve our understanding of financial crises. This book serves this purpose by bringing together a number of innovative studies on the causes and consequences of financial crises and policy responses to them. Although there is a rich literature on financial crises, there has been no publication since the recent financial crisis providing in one place a broad overview of this research and distilling its policy lessons. The book fills this critical gap. It covers a wide range of crises, including banking, balance-of-payments, and sovereign debt crises. It reviews the typical patterns prior to...
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...Existing Business Proposal ECO/561 June 21, 2012 Dr. Jill Trask Business Proposal It is very significant to comprise a business plan in the shifting world business to stay ahead. The changes in the economy will create or shatter the business. In this paper Adnan will discuss the existing goods or services business proposal of Thomas Money Services Inc. The reason to have a business plan for the organization is to restore or generate more profits for the business. Elasticity of Demand and Market Structure Thomas Money Service Inc. (TMS) has been in business since 1940. TMS started out as an end user funding company giving way loans for domestic wants. The company prolonged over the next five years by granting business loans, business acquirement financing, and business real estate loans. In 1946 executive made a choice to expand into gear financing. This proved very lucrative for the company. With the end of the World War II, society experienced increased demand for construction and forestry equipment. In 1951, the equipment financing subsidiary, Future Growth Inc. (FGI) purchased and equipment manufacturing company, which vertically integrated the subsidiaries operations. TMS Inc has a monopolistic competition market; elasticity of demand is how much demand varies for manufactured goods in connection to a transformation in price. This transformation is measured as a percentage. For TMS Inc the elasticity is that it can offer the monetary support...
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...Positive and Negative Effects of the Global Financial Crisis Harlita H. Tomlinson Capella University BMGT8114: Accounting in the Global Era Dr. Wendy Achilles June 8,2014 Table of Contents Abstract 3 Positive and Negative Effects of the Global Financial Crisis 4 Background on the Global Financial Crisis 5 Global Financial Crisis and Its Negative Effects 9 Lack of Financial Sector Regulation and Oversights 9 Increase in the Number of Bankruptcies 11 Global Financial Crisis and Its Positive Effects 12 Designing Regulations to Monitor the Financial Sector 12 Global Governance as a Side Effect of the Global Financial Crisis 13 Lessons Learned 16 Domestic Lessons Learned 16 Global Lessons Learned 17 Lessons from Romania. 18 The Role of Financial Executives in GFC 19 Conclusions 21 References 24 Abstract The first financial crisis of the twenty-first century has not yet ended, according to Gorton and Metrick (2012), the wave of research on the crisis has already exceeded any single reader’s capacity, with the pace of new work only making this task harder. The Global Financial Crisis is considered by many economists to be the worst financial crisis since the Great Depression. Global Financial Crisis resulted in the threat of the total collapse of large financial institutions, the bailout of banks by national governments, and market downturns around the world. In the aftermath of this crisis, the housing market declined significantly and has not...
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