...The Federal Reserve Bank As the United States moves towards a globally interdependent marketplace, the global monetary stakes have become much higher. The United States Congress established the Federal Reserve in the early 1900’s. A country’s debt can now become the world’s debt, and the role of the U.S. federal banking system is now considerably more under pressure and scrutiny than ever before. As we have been seeing with the current liquidity crisis in the U.S., and how it has affected U.K. and Asian markets, strong, comprehensive policy-making is now crucial to sustaining long-term economic viability. The American economy is a complex balance of services, financial, manufacturing, agricultural, and banking industries. For this reason, the U.S. is a global economy, relying upon foreign investments and trade to create and retain wealth. Over the years, America has evolved from farming-based, to industrial, to a services-based economy. As a result, the banking system from its inception has weathered the many growing pains associated with a new government and currency, instituting regulations and a centralized bank to examine the economy, and implementing policies intended to offset factors negatively affecting the general financial health of the country. Despite the growing need for quick, precise actions by the Federal Reserve System, the decision-making regarding the economy is often met with controversy. The recent bail out plan, passed by Congress...
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...Monetary Policy and the Federal Reserve: Current Policy and Conditions Marc Labonte Specialist in Macroeconomic Policy February 9, 2015 Congressional Research Service 7-5700 www.crs.gov RL30354 Monetary Policy and the Federal Reserve: Current Policy and Conditions Summary The Federal Reserve (the Fed) defines monetary policy as its actions to influence the availability and cost of money and credit. Because the expectations of market participants play an important role in determining prices and economic growth, monetary policy can also be defined to include the directives, policies, statements, and actions of the Fed that influence future perceptions. Traditionally, the Fed has implemented monetary policy primarily through open market operations involving the purchase and sale of U.S. Treasury securities. The Fed traditionally conducts open market operations by setting a target for the federal funds rate, the rate at which banks borrow and lend reserves on an overnight basis. Beginning in September 2007, in a series of 10 moves, the federal funds target was reduced from 5.25% to a range of 0% to 0.25% on December 16, 2008, where it has remained since. With the federal funds target at this zero lower bound, the Fed attempted to provide additional stimulus through unconventional policies. It provided forward guidance on its expectations for future rates, announcing that it “anticipates that, even after employment and inflation are near mandate-consistent levels, economic...
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...Instructor Introduction: In order to get the economy out of recession, federal government would engage in expansionary economic policies including expansionary fiscal policy and expansionary monitory policy. Under each of expansionary economic policies require different actions taken by the government. The subject study is aimed to conceptualize the concept of expansionary fiscal and monitory policies and to identify different actions and activities that a federal government may take under expansionary fiscal and monitory policies in order to take an economy out of recession (Larch, and Martins, 2009). Additionally order to identify and explain different actions the federal government would take engaging in expansionary fiscal policy have been discussed in term of necessary changes in taxes and governmental spending and the effect on demand, employment and overall GDP. On the other hand in order to discuss the expansionary monetary policy three tools available to Federal Reserve Bank while conducting monetary policy and explaining increase or decreasethe required reserve ratio, increase or decrease the discount rate and sell or buy the government securities when conducting expansionary monetary policy. Expansionary Monetary Policy: The expansionary monetary policy refers to the policy of central bank for instance the Federal Reserve employed its tools in order to stimulate the economy. Under this policy the Federal Banks usually lower their Fed Fund Rate in order increase the money...
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...Instructor Introduction: In order to get the economy out of recession, federal government would engage in expansionary economic policies including expansionary fiscal policy and expansionary monitory policy. Under each of expansionary economic policies require different actions taken by the government. The subject study is aimed to conceptualize the concept of expansionary fiscal and monitory policies and to identify different actions and activities that a federal government may take under expansionary fiscal and monitory policies in order to take an economy out of recession (Larch, and Martins, 2009). Additionally order to identify and explain different actions the federal government would take engaging in expansionary fiscal policy have been discussed in term of necessary changes in taxes and governmental spending and the effect on demand, employment and overall GDP. On the other hand in order to discuss the expansionary monetary policy three tools available to Federal Reserve Bank while conducting monetary policy and explaining increase or decrease the required reserve ratio, increase or decrease the discount rate and sell or buy the government securities when conducting expansionary monetary policy. Expansionary Monetary Policy: The expansionary monetary policy refers to the policy of central bank for instance the Federal Reserve employed its tools in order to stimulate the economy. Under this policy the Federal Banks usually lower their Fed Fund Rate in order increase the money...
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...ACCT567 Case Study I (Week 2) Part A City of Middleville General Fund General Journal 1. General Fund Debit Credit Estimated Revenues xxxxx Appropriations xxxxx Budgetary Fund Balance xxxxx 2. General Fund Encumbrances xxxxx Reserve for Encumbrances xxxxx 3. General Fund Taxes Receivable-Current xxxxx Estimated Uncollectible Current Taxes xxxxx Revenues-Property Taxes xxxxx Governmental Activities Taxes Receivable-Current xxxxx Estimated Uncollectible Current Taxes xxxxx General Revenues-Property Taxes ...
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...Quantitative Easing: Entrance and Exit Strategies by Alan S. Blinder, Princeton University CEPS Working Paper No. 204 March 2010 Acknowledgements: Paper prepared for the Homer Jones Memorial Lecture at the Federal Reserve Bank of St. Louis, April 1, 2010. I am grateful to Gauti Eggertsson, Todd Keister, Jamie McAndrews, Paul Mizen, John Taylor, Alexander Wolman, and Michael Woodford for extremely useful comments on an earlier draft, and to Princeton’s Center for Economic Policy Studies for research support. Apparently, it can happen here. On December 16, 2008, the Federal Open Market Committee (FOMC), in an effort to fight what was shaping up to be the worst recession since 1937, reduced the federal funds rate to nearly zero. 1 From then on, with all of its conventional ammunition spent, the Federal Reserve was squarely in the brave new world of quantitative easing. Chairman Ben Bernanke tried to call the Fed’s new policies “credit easing,” probably to differentiate them from what the Bank of Japan had done earlier in the decade, but the label did not stick. 2 Roughly speaking, quantitative easing refers to changes in the composition and/or size of the central bank’s balance sheet that are designed to ease liquidity and/or credit conditions. Presumably, reversing these policies constitutes “quantitative tightening,” but nobody seems to use that terminology. The discussion refers instead to the “exit strategy,” indicating that quantitative easing (“QE”) is looked upon as...
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...Monetary Policy in the United States: A Brave New World? Stephen D. Williamson This article is a reflection on monetary policy in the United States during Ben Bernanke’s two terms as Chairman of the Federal Open Market Committee, from 2006 to 2014. Inflation targeting, policy during the financial crisis, and post-crisis monetary policy (forward guidance and quantitative easing) are discussed and evaluated. (JEL E52, N12) Federal Reserve Bank of St. Louis Review, Second Quarter 2014, 96(2), pp. 111-21. en Bernanke chaired his last Federal Open Market Committee (FOMC) meeting in January 2014 and departed from the Board of Governors on February 3 after eight years as the head of the Federal Reserve System. So, the time is right to look back on the Bernanke era and ask how central banking has and has not changed since 2006. There is plenty in the macroeconomic record from 2006 to 2014 to keep economists and policy analysts busy for many years, so in this short piece we can only scratch the surface of what is interesting about the Bernanke era. I will focus on three issues: (i) inflation targeting, (ii) Fed lending and other interventions during the financial crisis, and (iii) post-crisis Fed policy, in particular experiments with forward guidance and quantitative easing (QE). B INFLATION TARGETING When Bernanke began his first term in 2006, I think the big change people expected was an inflation-targeting regime for U.S. monetary policy, similar to what exists in New...
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...of the study …………………………………. 4 2. Statement of Problem……………………………………… 5 3. Hypothesis………………………………………………… 6 4. Research objective………………………………………… 6 5. Research Question………………………………………… 6 6. Significance of Study……………………………………… 7 7. Scope and Limitation of the Study………………………… 7 8. Research Methodology……………………………………. 7 II. Literature Review……………………………………………… 8-9 III. Discussion III.1. Interest rate versus exchange rate in Bank deposit……… 10 III.1.1 Appreciate US Dollar in Bank Deposit factor…10-11 III.1.2 Depreciate US Dollar in Bank Deposit factor….. 11 III.2. Interest rate affected in Stock market…………………... 11 III.2.1 Depreciate US Dollar in Stock Market………..11-12 III.2.2 Appreciate US Dollar in Stock Market..................12 IV. Conclusion……………………………………………………… 13 V. References…………………………………………………….14-15 Abstract In this paper, I use high frequency data to investigate the extent to which interest rate changes originated in the United States by the Reserve Federal Fund. More specifically, I am interested in understanding in effects of changes in the Federal Reserve Fund’s interest rates on differential between (short term) local currency interest rates. I also investigate how interest rate influences to the foreign exchange market when Federal set the interest rate. The result indicates that Federal Reserve’s rate can influence foreign exchange market in the bank deposit factor and in the stock market. Key words: U.S Federal Reserve, Federal...
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...Weekly Reflection Macroeconomics is a fascinating area of study. Students of economics learn about economic interactions between households, business, and government. They study gross domestic product and the effect inflation and unemployment has on the aggregate economy. Students add to their vocabularies terms, such as Keynesian, money wealth effect, and the principle of increasing marginal opportunity. They ponder issues, such as if a country is operating inefficiently and hence is at a point inside the production possibility curve because its lawns produce no crops, but occupy more land than any single crop, such as corn. In addition, students discover that AS/AD is an economic model, not a hard rock band. This week, rates of interest, the United States’ monetary policies, and the Multiplier Model are topics students have an opportunity to explore. Rates of Interest In the world of economic studies, the term, interest rates, inevitably comes up. Interest rates are key factors within the financial sector. Economists define interest rates as the process charged for the use of financial assets. Interest rates fluctuate almost daily. The largest contributing factor is the current economy of the country. When the economy is growing, people are getting more employment, and more saving and lending occurs. Interest rates tend to increase as the demand for money increases. The opposite holds true when the demand for money falls. As the demand falls, interest rates will fall. Another...
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...Title: JOURNEY TO SAKHALIN: ROYAL DUTCH/SHELL IN RUSSIA (A) CASE STUDY REPORT Contents Page 1. Executive Summary……………………………………………………………….…………………..3 2. Introduction…………………………………………………………………………….………..……….3 3. Analysis…………………………………………………………………………………..…………….……3 3.1 Foreign Direct Investment…………………..…………………………………….……………...3 3.2. Sakhalin………..……………………………………………………………………………………….…..4 3.3. Production-Sharing Agreement……………………………………………………………..….4 3.4. Approvals-TOEC…………………………………………………………………………………..…….5 3.5. NGO’s and the Environment………………………………………………………………..…...5 3.6. SEIC’s strategic moves……………………………………………………………………..………..6 4. Recommendations……………………………………………………………………………..……..7 1. Executive Summary: In the following report the case study titled “Journey to Sakhalin: Royal Dutch/Shell in Russia” will be examined. A summary of the main issues that SEIC came across with, is analyzed including issues with the PSA and the political usage of Sakhalin II project, as means to an end. Other issues including late approvals, TOEC acquisition and nongovernmental organizations’ influence to potential buyers and lenders are also mentioned. Conclusively a recommendations section is created for the future of Sakhalin II project, that emphasizes on the PSA matter and the TOEC acquisition. 2. Introduction In the period of 1997-1999 Russia faced a great economic decline with a massive fall in GDP...
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...Fall 2012 [pic] ECO 212 – Macroeconomics Yellow Pages ANSWERS Unit 3 Mark Healy William Rainey Harper College E-Mail: mhealy@harpercollege.edu Office: J-262 Phone: 847-925-6352 Consumption and Saving Functions Y C S APC MPC APS MPS _____________________________________________________________________________________ 0 40 - 40 -- -- -- -- _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 100 120 - 20 1.2 .8 -0.2 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 200 200 0 1 .8 0 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 300. 280 20 .93 .8 .07 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 400. 360 40 .90 .8 .10 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 500. 440 60 .88 .8 .12 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 600. 520 80 .87 .8 .13 .2 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ ...
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...Printer Version - Board of Governors of the Federal Reserve System http://www.federalreserve.gov/newsevents/speech/bernanke2008041... 1 of 6 4/26/2008 8:02 PM Speech Chairman Ben S. Bernanke At the World Affairs Council of Greater Richmond's Virginia Global Ambassador Award Luncheon, Richmond, Virginia April 10, 2008 Addressing Weaknesses in the Global Financial Markets: The Report of the President's Working Group on Financial Markets In recent months, the Federal Reserve has been intensely focused on the continuing strains in financial markets. Healthy, well-functioning financial markets are essential to sustainable growth. In particular, much experience shows that economies cannot perform at their full potential when financial conditions are such as to restrict the supply of credit to sound borrowers. We are addressing these financial strains and their potential economic consequences with a number of tools, including the provision of extra liquidity to the system and reductions in our target for the federal funds rate. Even as we have worked to resolve the current crisis, however, the Federal Reserve has also been part of a national and international effort to draw at least some preliminary conclusions about the sources of the current turmoil as well as the implications for public policy. In my remarks today I will discuss some of these conclusions and, in the process, identify some measures that should be taken to strengthen the global financial system in...
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...NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS ANTHRAX VACCINE AS A COMPONENT OF THE STRATEGIC NATIONAL STOCKPILE: A DILEMMA FOR HOMELAND SECURITY by Thomas L. Rempfer December 2009 Thesis Advisor: Second Reader: Stanley Supinski Dean Lynch Approved for public release; distribution is unlimited THIS PAGE INTENTIONALLY LEFT BLANK REPORT DOCUMENTATION PAGE Form Approved OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington DC 20503. 1. AGENCY USE ONLY (Leave blank) 4. TITLE AND SUBTITLE 2. REPORT DATE December 2009 3. REPORT TYPE AND DATES COVERED Master’s Thesis 5. FUNDING NUMBERS Anthrax Vaccine as a Component of the Strategic National Stockpile: A Dilemma for Homeland Security 6. AUTHOR(S) Thomas L. Rempfer 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) Naval Postgraduate School Monterey, CA 93943-5000...
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... This chapter discusses the form and function of the global capital market. The market is attractive because its size lowers the cost of capital for borrowers, and allows investors to diversify their portfolios, thereby reducing their risk. Advances in information technology, and the deregulation of financial services and the relaxation of regulations on cross-border capital flows have contributed to the growth of the global capital market. The chapter then goes on to explore the Eurocurrency market, the global bond market, and the international equities market. The opening case describes how ICBC, China’s largest bank, raised $21 billion in the international equities market. The closing case examines how China Mobile raised capital in international markets through a stock offering and a bond issue. OUTLINE OF CHAPTER 11: THE GLOBAL CAPITAL MARKET Opening Case: Industrial and Commercial Bank of China Introduction Benefits of the Global Capital Market Functions of a Generic Capital Market Attractions of the Global Capital Market The Borrower’s Perspective: Lower Cost of Capital The Investor’s Perspective: Portfolio Diversification Growth of the Global Capital Market Information Technology Deregulation Global Capital Market Risks Management Focus: Deutsche...
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...McKinsey Global Institute November 2013 QE and ultra-low interest rates: Distributional effects and risks Discussion paper 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 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 five themes: productivity and growth; the evolution of global financial markets; the economic impact of technology and innovation; urbanization and infrastructure; and natural resources. Recent research covers job creation, infrastructure productivity, a new wave of disruptive technologies, trends in resource markets, and the shifting global company landscape. MGI is led by McKinsey & Company directors Richard Dobbs, James Manyika, and Jonathan Woetzel. Yougang Chen, Michael Chui, Susan Lund, and Jaana Remes serve as MGI principals. Project teams are led by a group...
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