...past recessions, should be going forward and getting better, but is it? According to statistics from Bureau of Economic Analysis (BEA), the United States is still trying to recover. The gross domestic product rate keeps going up and down; it does not keep going up, as it did in past recessions. What is to become of the United States if President Obama cannot get us out of the recession? EXPECTED U.S. GDP GROWTH RATE GOING FORWARD The gross domestic product (GDP) growth rate is an important indicator of the U.S. economic health. The slope of the yield curve – the spread between long and short - term interest rates – is a good predictor of future economic activity. As these slopes shift, you will get periods of high and low growth in GDP. There are three different methods of determining GDP. The first one is estimating each industry’s gross output and subtracts intermediate inputs from other industries to derive each industry’s residual value-added, which is sometimes called the production approach (Wells and Krugman, 2009). The second method is the income approach, which measures the income earned by the different factors of production (Wells et al). The third method is the final expenditures approach, which shows what is happening across different types of spending throughout the economy, usually done annually (Wells et al). The calculation is GDP = C (Consumption) + I (Investment)...
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...Threats to the Colombian Market 9 5.4.1 Risks of the fluctuation of the Colombian Peso interest rate 10 5. 3 scenarios 11 5.1 Scenario 1 11 5.2 scenario 2 14 6.3 Scenario 3 15 6. Advice 16 7. Bibliografy 17 1. Introduction The two currencies that have been chosen for this report are the Colombian peso and the US Dollar. The bank of Utrecht will consider the possible investing situations based on the 3 scenarios presented on these reports with the different hedging techniques and the possible return on investment the project can make against the risk taken. The 3 scenarios used will display what could possibly take place in the countries the bank of Utrecht will partake in. The two currencies will be borrowed from one country and lent to other on the basis that the currency will appreciate on the long term and the interest rate that will be compounded will help the bank of Utrecht make the decision to how exposed it will want to be when running the risks in those countries. There will be a macro-analysis of the USA and Colombia, analyzing the possible the economic, political and the yield curve of the interest the currency will be that is invested in. 2. Why the Currencies The reason why the Colombian Peso and the United States Dollar was chosen, was because the Colombian currency is showing signs of appreciating in the future. The prime interest rate in the South American country, Colombia, is approximately 8,7% right now and it is continuing to...
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...In normal times, a 3.2 percent GDP growth rate for the United States is good. In the 1980’s the U.S. suffered another severe recession. During that recovery, GDP grew at a 7 to a 9 percent rate for more than one year. A 3.2 percent GDP annual growth rate barely creates enough jobs to keep up with the expanding population. It does nothing for all those who lost their jobs and are looking for work. The U.S. unemployment rate is 9.7 percent and the underemployment rate, a more accurate measure of the true unemployment situation is running at the 16.5% level. What can we learn from the Bureau of Economic Analysis (BEA) report on the GDP growth rate that might be helpful to investors? Jobless growth “Okun’s rule of thumb” points toward an economy that must grow at the 3.0 – 3.5 percent level to maintain current employment levels. If the U.S. economy was operating at full employment status, a 3.0-3.5 percent growth rate works just fine. The problem is the U.S. has 9.7% unemployment and 16.5% underemployment. We will get another look at the employment situation when the Bureau of Labor statistics (BLS) releases the number for April on May 7, 2010. The chart below from the BLS report for March 2010 shows that the total employment for the U.S. is back where it was at the end of the recession that ended in January 2003. If the U.S. GDP only achieves growth at 3.0 to 3.5 percent growth rate, the level of employment will only cover the expansion of the population, leaving 7.5 million...
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...industry and research institutions. The survey participants were asked to provide their forecast for key macro economic variables for the year 2011-12 as well as for Quarter 1 (Apr-June) and Quarter 2 (July-Sep) of 2011-12. In addition to these, views were sought on two topical issues – whether RBI should be prepared to deal with the possibility of another global slowdown and the expected stance of RBI in the forthcoming monetary policy review on July 26th, 2011. The feedback received from the survey participants was aggregated and analyzed. The results obtained are presented in the following pages. The findings of the survey represent the views of respondents and do not reflect the views of FICCI. 2|P a g e FICCI Economic Outlook Survey – July 2011 EXECUTIVE SUMMARY Annual forecasts for 2011-12 GDP growth – 7.9 percent Agriculture & allied activities growth – 3.8 percent Industry growth – 7.3 percent Services growth – 9.4 percent Fiscal Deficit – 5.1 percent of GDP WPI Inflation rate (end March 2012) – 6.6 percent IIP growth – 7.3 percent Trade Balance – (-) 7.5 percent of GDP Current...
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...The United States of America (USA or U.S), commonly referred to as the United States is a federal republic [1][2] consisting of 50 states and a federal district. The 48 contiguous states and Washington, D.C., are in central North America between Canada and Mexico. The United States is a developed country and has the world's largest national economy.3 The economy is fueled by an abundance of natural resources and high worker productivity.4 While the U.S. economy is considered post-industrial, it continues to be one of the world's largest manufacturers.5 The country accounts for 37% of global military spending,6 being the world's foremost economic and military power, a prominent political and cultural force, and a leader in scientific research and technological innovations.7 Economy The United States has a capitalist mixed economy which is fueled by abundant natural resources and high productivity.8 According to the International Monetary Fund, the U.S. GDP of $16.8 trillion constitutes 24% of the gross world product at market exchange rates and over 19% of the gross world product at purchasing power parity (PPP).9Its national GDP was about 5% larger at PPP in 2014 than the European Union's, whose population is around 62% higher.10 However, the US's nominal GDP is estimated to be $17.528 trillion as of 2014, which is about 5% smaller than that of the European Union.11 From 1983 to 2008, U.S. real compounded annual GDP growth was 3.3%, compared to a 2.3% weighted...
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...You are the newly appointed President of the local Chamber of Commerce. You are making your first presentation to the Chamber and want to make a good first impression.Your presentation will be based on the following topic, purpose, and audience. * Topic: Expected U.S. GDP growth rate going forward * Audience: Local chamber of commerce * Purpose: To give business leaders an idea of what the economy may look like based on recent history and expected future conditions Part IWrite a 600-750 word research paper given the topic, purpose, and audience information above. In addressing GDP, consider the following: * Trends, forecasts, and statistics * How GDP is determined * Interpreting GDP Part IIPrepare a PowerPoint presentation, consisting of at least 15 slides, to supplement your research paper and be presented to the Chamber of Commerce of an area of your choice. As with any effective presentation, the PowerPoint should be in color, have at least one chart, and clip art on other slides.PowerPoint - Presentation GuidelinesThe following guidelines for your PowerPoint presentation will be used to grade your work as well: * Limit the number of words on slides. Slides are designed to supplement your presentation—not to be your presentation (in this assignment, it is to supplement your research paper). * Avoid paragraphs * Use bullet points * Use succinct phrases instead of sentences * Limit each slide to 6 bullet points * Simple fonts * Fonts...
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...|Your presentation will be based on the following topic, purpose, and audience. | | |Topic: Expected U.S. GDP growth rate going forward | | |Audience: Local chamber of commerce | | |Purpose: To give business leaders an idea of what the economy may look like based on recent history | | |and expected future conditions | | |Part I | | |Write a 600-750 word research paper given the topic, purpose, and audience information above. In | | |addressing GDP, consider the following: | | |Trends, forecasts, and statistics | | |How GDP is determined | | |Interpreting GDP...
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...There were silent funs on Greek banks, with capital flight; people are pulling their money out of the Greek banks and sending it elsewhere, making the Greek economy worse. The common currency zone escalates the problems. There are also capital and trade imbalances. Germany is exporting a great deal more than it imports, causing capital flows into Germany. Spain and Greece import more than they export so capital flow is out of the country. They need to become more productive at exporting, which is not always easy. In the 2000’s money flowed into periphery countries, borrowing rates were low and capital inflow brought rising standards of living. By 2010’s money was flowing out of the periphery countries and back into Northern Europe. Periphery economies were starved for investment borrowing at high rates. The problems are made worse by belonging to a common currency area. There is no exchange rate to adjust. The fiscal crisis came about because some governments in the Euro zone have run up bills that now need to be repaid. They spent more money than they have been taking in, in terms of tax revenue. Greece’s band spending behavior was the upfront problem that led to...
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...the liberalization, but with Chinese characteristics, of five determining factors in becoming a country who’s currency is a global reserve currency. These factors are as follows: economic size, macroeconomic policies, flexible exchange rates, financial market development, and finally having an open capital account, and will ultimately prove the China is not quite the rising economic power some believe it to be (citation, 2012). Market Liberalization… with Chinese Characteristics In China, it is currently the year of the dragon, a symbol of good fortune and sign of intense power. With this symbol of fortune and power many Chinese are hoping for a year of economic prosperity, especially for the growth of the Renminbi, or more commonly known as the Yuan. In recent years, China has maintained that it’s “special” economy is pursuing a “market economy, but with Chinese characteristics”. Some of these characteristics include encouraging more of an international use of the currency, while being famous for their inflexibility with exchange rates, and not fully opening up the economy to the free flow of capital. However, the Yuan’s acceptance as a reserve currency will be based on China’s economic size, macroeconomic policies, flexible exchange rates, financial market development, and finally having an open capital account. It seems that with time, it is inevitable that China’s Yuan will one day become a global reserve currency. Depending on the development of these five criteria...
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...The Index The Index | 1 | The Introduction | 2 | Financial Subprime Mortgage Crisis Causes | 3 | Introduction & Background to the Situation of the Egyptian Economy prior to the Global Financial crisis | 10 | Financial Subprime Mortgage Crisis Impacts on Egypt | 13 | The Egyptian Economy & the crisis | 21 | The Conclusion & Solutions | 23 | The References | 27 | The Introduction In the second half of 2008, the world economy went through a serious financial upheaval that sparked off in the United States and spread to Europe and the rest of the world. The negative consequences of this financial crisis had bitten the Egyptian economy in many fields. Egypt’s growth rate witnessed setbacks and may have posted its slowest annual growth in half a decade in 2008–2009 as the global crisis hit revenue from tourism, migrant labor remittances, the Suez Canal, export revenues, and investment. The severity of the crisis and its uncertainties demonstrated the need for urgent action to restore financial stability, lead the economic recovery and secure a sustainable future for the country. This paper therefore critically discusses the current global financial crisis and its impact on Egypt. It presents an overview of the Egyptian economy prior to the crisis, followed by an assessment of the depth and impact of the crisis on sectors of the Egyptian economy. Additionally, the paper highlights the actions taken by the Egyptian government to weather the effects...
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...Deficits, National Saving, and Interest Rates William G. Gale and Peter R. Orszag September 2004 Brookings Institution and Tax Policy Center. This paper was prepared for the Brookings Panel on Economic Activity, September 9-10, 2004. We thank Emil Apostolov, Matt Hall, Brennan Kelly, and Melody Keung for outstanding research assistance; Alan Auerbach, William Brainard, Robert Cumby, Bill Dickens, Doug Elmendorf, Eric Engen, Laurence Kotlikoff, Thomas Laubach, Maria Perozek, George Perry, Frank Russek, Matthew Shapiro, and David Wilcox for helpful discussions; and Eric Engen, Jane Gravelle, and Thomas Laubach for sharing data. ABSTRACT This paper provides new evidence that sustained budget deficits reduce national saving and raise interest rates by economically and statistically significant quantities. Using a series of econometric specifications that nest Ricardian and non-Ricardian models, we obtain evidence of strong non-Ricardian behavior in aggregate consumption. Consistent with several recent studies, we find that projected future deficits affect longterm interest rates, but current deficits do not. Our estimates suggest that each percent-ofGDP in current deficits reduces national saving by 0.5 to 0.8 percent of GDP. Each percent-of-GDP in projected future unified deficits raises forward long-term interest rates by 25 to 35 basis points, and each percent-of-GDP in projected future primary deficits raises interest rates by 40 to 70 basis points. Budget...
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...(2009). Presentation design. T+D, 63(3). Retrieved from Academic Search Premier database. Assignment Type: Individual Project Deliverable Length: Research Paper + at least 15 PowerPoint slides Points Possible: 110 Due Date: 1/20/2013 11:59:59 PM CT You are the newly appointed President of the local Chamber of Commerce. You are making your first presentation to the Chamber and want to make a good first impression. Your presentation will be based on the following topic, purpose, and audience. Topic: Expected U.S. GDP growth rate going forward Audience: Local chamber of commerce Purpose: To give business leaders an idea of what the economy may look like based on recent history and expected future conditions Part I Write a 600-750 word research paper given the topic, purpose, and audience information above. In addressing GDP, consider the following: Trends, forecasts, and statistics How GDP is determined Interpreting GDP Part II Prepare a PowerPoint presentation, consisting of at least 15 slides, to supplement your research paper and be presented to the Chamber of Commerce of an area of your choice. As with any effective presentation, the PowerPoint should be in color, have at least one chart, and clip art on other slides. PowerPoint - Presentation Guidelines The following guidelines for your PowerPoint presentation will be used to grade your work as well: Limit...
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...The US economy is expected to grow at a really slow pace given the fiscal outlook and government cuts in spending. It is unlikely that there will be a government stimulus package in 2012 and the reason being a divisive politics in congress and also the piling up of the public debt. Fiscal policy in the past years helped to stimulate the economy especially after the inauguration of Barack Obama. Obama signed into law 787 billion dollar stimulus package in 2009 and helped the economy to gain a boost. The following year the economy stayed kind neutral and in 2011 it was slowing down and losing points gained in the previous years. In 2012 economists are looking forward to the decisions made by government. If the Obama stimulus package that’s about creating jobs, cutting taxes on the middle class people and taxing the rich more will help to neutralize the economy. But that’s unlikely and it will have dragged the current economy to its lowest in three years. The European Debt Crisis The Economic health of Europe is important to the prosperity of US. Europe's ills already have damaged some U.S. interests, from multinational companies to major exporters. Individual investors have many reasons for concern, as the enthusiasm from earlier debt agreements has given way to pessimism and stock market dives. If the U.S. economy takes such a turn into 2012, Europe's financial troubles could wind up affecting the U.S. presidential election. Big American banks have outstanding loans...
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...projections for the future. Key words: Economy Economic Damage to the State There had been descending times in New Jersey, their GDP dropped from $482.1 billion in 2008 to $470.35 billion in 2009 during the Great Recession, and has rebounded slowly, climbing back to $480.4 billion in 2010 and hitting $486.99 billion in 2011. In both years, New Jersey ranked 47th nationally in economic growth (Magyar, 2013). Then a major disaster in Hurricane Sandy happened, and packed a bigger economic punch than most people had thought. In its sweep through the Northeast, the storm halted sales at major retailers at the start of the crucial holiday shopping season, closed factories and slowed home sales in one of the most densely populated areas of the country. Target and Macy's blamed the storm for weak sales in November. Macy's and Nordstrom Inc. reported their first monthly sales drop since late 2009, when the U.S. economy was just emerging from the Great Recession. The government said that new-home sales plunged 32 percent in the Northeast last month and nearly 12 percent in the South. By contrast, sales surged nearly 63 percent in the Midwest and nearly 9 percent in the West. Sandy is being blamed for about $62 billion in damage and other losses in the U.S., most of it in New York and New Jersey (Matthews, 2012). It's the second-costliest storm in U.S....
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...IMF Country Report No. 15/58 MALAYSIA March 2015 2014 ARTICLE IV CONSULTATION—STAFF REPORT; PRESS RELEASE; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR MALAYSIA Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2014 Article IV consultation with Malaysia, the following documents have been released and are included in this package: The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on February 13, 2015, following discussions that ended on November 24, 2014, with the officials of Malaysia on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on January 23, 2015. An Informational Annex prepared by the IMF. A Press Release summarizing the views of the Executive Board as expressed during its February 13, 2015 consideration of the staff report that concluded the Article IV consultation with Malaysia. A Statement by the Executive Director for Malaysia. The document listed below has been or will be separately released. Selected Issues Paper The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information. Copies of this report are available to the public from International Monetary Fund Publication Services PO Box 92780 Washington, D.C. 20090 Telephone: (202)...
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