... to discuss their vision for rebuilding the world economy after the ravaging war. John Maynard Keynes, perhaps the biggest economist celebrity of his time, attended the conference with his own idea of how the post-war economy should shape up. Unfortunately for him, and perhaps for us all, his ideas were overruled in favor of American treasury secretary, Harry Dexter White’s plan, and was lost in the annals of history, before seeing renewed resurgence in the context of contemporary instabilities in the international monetary system, forcing a rethink of what was lost in the conference years ago. The Bretton Woods Conference was a defining event in world history, as it established the monetary system that we see today. Dollar hegemony and its status as a reserve currency has been called an ‘exorbitant privilege’, against which there have been voices time and again, but never has the wave been as strong as today. From a concern by economists, such as Triffin, Monbiot, Skidelsky, the overreaching impact of the economic recession of the late 2000s has led to significant doubts about the current system for policymakers and national leaders. In 2008, Monbiot recalled Keynes while analysing the financial instability of 2008, “John Maynard Keynes had the answer to the crisis we’re now facing; but it was blocked and then forgotten”. Skidelsky talks about reforming the ‘non-system’ by focusing on Keynes’ Clearing Union proposals and suggests that it is desirable to shift towards SDRs...
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...Economy Macroeconomics: The study of Our National Economy “Our new economic approach is rooted in ideas which stress the importance of macro-economics, post neo-classical endogenous growth theory and the symbiotic relationships between growth and investment, and people and infrastructure”. (Brown) As we have seen here in the past few years, but more so in the last year, the economy is ever changing. Macroeconomics is the backbone of America and without a stable economy we have serious hurdles in front of us to overcome. John Maynard Keynes developed the Keynesian Theory, which has become the foundation of our government’s economic decisions. During the course of this paper I will outline Keynesian Theorists and Monetary Theorists approach to promote long-run macroeconomic stability, the impact of persistent budget deficits on the trade deficit, options available to policy makers when national savings presents opportunity to improve the trade deficit, appraise the position of the supply side as it relates to government deficits and evaluate recent national economic policies as they relate to the magnitude of the trade deficit. In essence, the inner workings and use of macroeconomics as a financial tool of study to determine how a national economy is managed and sustained. To begin, Keynesian theorists approach to promote long-run macroeconomic stability is somewhat unique. Economist who agree with Keynes’ theories believe that we live in the short run, that what occurs in the...
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...this, the economy hit their lowest point in 1930. Around that time their president chose to design a dam which would be called the hoover dam.Hoover personally believed that by making the hoover dam, they will provide funding in America and make new jobs for people inn the country. America still use this kind of technique right now to expand their country. The idea to invest in the economy in order to increase their economic growth was John Maynard Keynes . John Maynard's Keynes theory thought if the government invested in it economy it would boost the economy. Ways to make sure this happens are opening new businesses so more people will have jobs, also he thought that the government must lower its interest rates because if they are low organisations can extract bank loans more easily and they can also use these loans to develop more outlets, if organisations continue to take out bank loans. This can be used to increase employees wages so employees can spend more and this will increase the money the economy makes. This is the main reason why John Maynard Keynes made this theory saying that in order for a country to expand, they will have to increase their value in investment. The second country that will be mentioned is Singapore, The economy in Singapore is strong because they have a free market because the government does not have any...
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...Unemployment: An evil necessity? 1. Introduction By definition economics is “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services.” And as with other types of sciences, economics contains many beliefs and theories that may be difficult to understand, yet are essential in the “day to day” decision making for many people. But also like other sciences, economics has evolved into what it is today. And it will continue to evolve as the practitioners of the science debate, test and discover better and more efficient way to “analyze the data.” Perhaps more than any other time in our nation’s history, people have personally seen the effects of economics. One of the most visible areas seen in the market place today is the economics of unemployment. Unemployment is currently 8.2% as measured by the United States Bureau of Statistics. I believe that most people are familiar with the term “Unemployment Rate”, but I imagine that only a handful understand the significance of what this “number” is telling us. Economics is similar to mathematics, physics and chemistry in the sense that all disciplines require thought, equations, observations and experiments to be performed in order to get an “observable” end result. And from that result we make conclusion about the very thing we are testing. So it is with unemployment; a “mathematical equation” that has the possibility of helping us understand the underlying...
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...Demand and Supply Models Raquel Hernandez Adrian Diaz Maritza Medrano Lizette Estrada University of Phoenix Principles of Macroeconomics ECO/372 Mr. Daniel Rowe February 22, 2014 Economic Critique Aggregate demand and supply are two extremely important elements that must take into consideration in macroeconomics. Considering how numerous economic factors impact demand and supply which is very serious especially important to the government because during the time frame it determines the economic policy. Factors such as unemployment, expectations, consumer income, and interest rates include an interest on the aggregate demand and supply. Therefore, these factors will be explained from two perspectives which are the Classical and the Keynesian. Although the events of the past six years have undeniably left their mark on the supply side of the economy, the primary reason unemployment remains high is lack of demand (Williams, 2013, p. 1). The private labor force support rate was dropped by 0.2% and marked a 62.8% by December, balancing a transformation of the same degree in November of 2013. However, during December the employment population rate was constant at 58.6%. The private labor force support rate had weakened by 0.8%, during the year, although the employment population rate was constant. Economists attempt to explain or translate the information calmly to improve and determine what approach the government policy must force. The United Sates unemployment...
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...It is hard to imagine that the sustained economic prosperity of the Roaring Twenties was soon followed by a severe worldwide economic depression. In 1929, the Great Depression began in the United States. By the time the economy hit rock bottom in 1933, real GDP plunged nearly 30%. Real per capita disposable income sank nearly 40%. More than 12 million people were thrown out of work; the unemployment rate soared from 3% in 1929 to 25% in 1933. Some 85,000 businesses failed. Hundreds of thousands of families lost their homes (Wheelock 2008). The money supply had fallen 35%, prices plummeted by about 33%, and more than one-third of banks in the United States were either closed or taken over by other banks (Parker 2010) . Milton Friedman and Anna Schwartz, in their 1963 book A Monetary History of the United States, 1867–1960, call this massive drop in the supply of money “The Great Contraction.” Monetarists, including Friedman, argue that the Great Depression was mainly caused by this monetary contraction, poor policy-making by the American Federal System, and continued crisis in the banking system. While there are many credited theories that provide an explanation for the Depression, this essay will focus on Monetarism and John Maynard Keynes’s argument for government stimulus in order to combat the economic downturn. Causes For The Great Depression In their book A Monetary History of the United States, 1867–1960, Friedman and Anna Schwartz stated that the Depression began with...
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...Firms hold cash for different motives. According to Keynes (1936) these motives are: a transaction motive, precautionary motive and speculative motive. Based upon these three motives we explain why U.S. firms hold a lot of cash. The first motive for holding cash is the precautionary motive (Keynes, 1936), which tells us that firms hold extra cash to be prepared for sudden uncertainty - a risk which cannot be hedged. Bates et al. (2009) states that an increase in idiosyncratic risk leads to an increase in cash flow volatility. This volatility increase evolves in an increase in the volatility of unhedgeable risk. A reaction to unhedgeable risk is to hold more cash. You want to have some savings when you have to do unexpected expenses. Research (Bartram, 2009) shows that U.S. firms are more exposed to idiosyncratic risk than foreign firms. This is due to several country characteristics. Because U.S. firms face larger exposures to idiosyncratic risks than foreign firms do, they will have more cash holdings. Moreover, there has been an increase in earnings volatility for U.S. firms over the past decades (Boileau and Moyen, 2012). This increase in volatility and, thus, risk is compensated by an increase in cash holdings and credit lines. So one might say that U.S. firms are holding too much cash, but this is seems quite legit when looking at their exposures to unseen losses/ sudden risks. Another precautionary motive (Keynes, 1936), but also a speculative motive, to hold cash is...
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...Keynes, ‘love of money’ and the current crisis Paolo Paesani1 This version 1 October 2010 Preliminary version ABSTRACT Keynes saw ‘love of money’, love for the unlimited accumulation of liquidity as mark of personal success and shield against uncertainty, as a defining element of capitalism. This paper investigates connections between ‘love of money’ and the current crisis establishing two main linkages: bonus-based compensation mechanisms and hedge funds. Closer scrutiny and regulation both of bonuses and hedge funds can help prevent future crises. Permanent solutions to the problems posed by ‘love of money’ however will come only from new models of education and persuasion. Keywords: Causes of the financial crisis JEL: 1 University of Rome “Tor Vergata”, e-mail paolo.paesani@uniroma2.it. A previous significantly different version of this paper has been published in Italian in Il Ritorno dell’Economia Politica , G. Bonifati and A. Simonazzi (Eds.) Donzelli Editore, 2010, Roma. I would like to thank Annalisa Rosselli and Matteo Formenti for their helpful suggestions and comments. The usual disclaimer applies. “Whereas modern theory serves as a simulacrum of the economy – stylised and abstract to be sure – Keynes theory is a diagnostic instrument in the service of Doctor Keynes, consulting economic physician” (Hoover 2006, p. 78) “I also want to emphasise strongly the point about economics being a moral science. [A science that]…deals with introspection and with values...
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...Groupthink in a Family Trust This is a concept application paper of the term groupthink as applied to the decision making process of a family trust. The paper is broken into to three major parts. First section of the paper is to explain the concept of groupthink, what it is defined to be. The second part of the paper is an analysis of my personal experience with groupthink within a family trust. The third part of the paper proposes a remedy other than argument and debate which would act as a “group antihistamine” against this phenomenon called groupthink. Defining Groupthink Groupthink as defined by Irving Janis in his book entitled Victims of Groupthink, in it is stated to be “the tendency of a group to conform to ideas simply because the general sense of the group has moved in a particular direction and members of the group feel committed to continue in the same unchallenged line of thought.” Consequently it is the practice of thinking and making decisions in a group in a way that discourages creativity or individual responsibility. Groupthink is an occurrence where by a group comes to a unanimous decision about a possible action despite the existence of facts that points to another more fruitful corrective course of action. In groupthink the members of the group place emphasis on everyone agreeing therefore there is a threat when a member is not in consensus. Unfortunately it results in more optimum solutions not being fully considered because of intimidation tactics...
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...cartoons play a critical role on important issues that are historically facing the country. Through a formal analysis, the paper looks at political cartoons in three levels; individual, state and system level. 1. Individual level From the cartoon, a man in a black suit is seated. A lady peeps eagerly waiting to hear from the boss. The man instructs the lady to write a press release aimed at stopping Pope from touching issues to do with scientists. The above cartoon depicts an event which took place recently where republication leaders order Pope Francis to stop discussing issues to do with climate change. Practically, Jeb Bush, the Florida governor claimed that scientific experts are the online people who can give reliable information regarding global temperature changes (Iserbyt & Charlotte 2011). They have designed crooked ways of shutting down the utterances of Pope Francis one of which is to hire scientists to disapprove the Pope’s utterances. 2. State Level The Hart City Council has introduced Hartford commuter tax whereby business owners must book a ticket costing $5. In essence, the council looks forward to punish Hartford residents who supported dearly Luke Bronin’s Mayoral Campaigns. It remains symbolic as they claim that this is a fine for investors who established large businesses with more 70 employees in the State (Falcocchio, John and Levinson 2015). The council seems to be in financial problems and the surest way of fixing such problems is by introducing...
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...Free Essays Home Search Essays FAQ Contact Search: Related Essays - Economics of Information - Introduction There have been discussions among scholars in developed countries regarding economics of information. Developed countries includes Australia, New Zealand, United States, Ireland, Germany...[ view ] - Economics and Growth - The demand curve is likely to change upwards or rise as a result of changes in a number of factors. One, if there is a move up in the price of an alternative commodity, or decrease in price of the giv...[ view ] Classical Economics vs. Keynesian Economics :: 5 Works Cited Length: 1187 words (3.4 double-spaced pages) Rating: Red (FREE) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - My research of Classical Economics and Keynesian Economics has given me the opportunity to form an opinion on this greatly debated topic in economics. After researching this topic in great lengths, I have determined the Keynesian Economics far exceeds greatness for America compared to that of Classical Economics. I will begin my paper by first addressing my understanding of both economic theories, I will then compare and contrast both theories, and end my paper with my opinions on why I believe Keynesian Economics is what is best for America. Classical Economics is a theory that suggests by leaving the free market alone without human intervention; equilibrium will be obtained. This theory...
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... OF INDUCTIVE INFERENCE Pascal Peters 3960463 The Perseverance of Inductive Inference: A battle led by Robert Sugden Pascal Peters Utrecht University School of Economics 3960463 1 THE PERSEVERANCE OF INDUCTIVE INFERENCE Pascal Peters 3960463 Abstract This paper will be a supportive commentary on Robert Sugden’s article ‘credible worlds: the status of theoretical models in economics’. We consider the choice of Sugden to peel away the layers of two very famous models in economics; the ‘market for lemons’ model by George Akerlof and the ‘checkerboard city for racial segregation’ mode by Thomas Schelling. We consider the role of logical empiricism and the econometric revolution on how these two models...
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...International Economics Paper Hercillia C. Henderson ECO/372 October 21, 2015 Professor Watson Ragin The Role of the President and Congress in Stimulating and Contracting the Economy Both the President of the United States and the United States’ Congress are capable of enacting policies that may have the effect of either stimulating or contracting the economy. The President is able to stimulate the economy in a variety of ways. One is to propose a Congressional budget that includes increases in spending for the purpose of creating a stimulus, or proposing tax cuts that likewise are intended to have a stimulus effect. The President may also issue executive orders in certain areas that have the effect of creating a stimulus or contracting the economy. These might include appointing like-minded people to the Federal Reserve Board, adjusting certain tax rates by means of changes in revenue collection policy, adjustments to trade policy, and the like. Congress possesses similar powers in that Congress may appropriate spending for purposes of a imposing a stimulus package, adjusting rates of taxation for the purpose of generating economic growth, adjusting trade policy, such as lowering tariffs, for a similar purpose, and creating public works programs. Budgets and legislation that are proposed by the President must ultimately be approved by Congress, although the executive branch of the federal...
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...Credible Keynesianism?: New Labour Macroeconomic Policy and the Political Economy of Coarse Tuning Ben Clift & Jim Tomlinson The article has been accepted for publication in the British Journal of Political Science © Cambridge University Press, 2006. Forthcoming, Volume 36 (2006). Material on these pages is copyright Cambridge University Press or reproduced with permission from other copyright owners. It may be downloaded and printed for personal reference, but not otherwise copied, altered in any way or transmitted to others (unless explicitly stated otherwise) without the written permission of Cambridge University Press. Hypertext links to other Web locations are for the convenience of users and do not constitute any endorsement or authorisation by Cambridge University Press. Ben Clift, University of Warwick b.m.clift@warwick.ac.uk http://www2.warwick.ac.uk/fac/soc/pais/staff/clift Jim Tomlinson, University of Dundee j.d.Tomlinson@dundee.ac.uk Abstract This article questions prevailing interpretations of New Labour’s political economy. New Labour’s doctrinal statements are analysed to establish to what extent these doctrinal positions involve a repudiation of Keynesianism. Although New Labour has explicitly renounced the ‘fine tuning’ often (somewhat problematically) associated with post-war Keynesian political economy, we argue that they have carved out policy space in which to engage in macroeconomic ‘coarse tuning’ inspired by Keynesian thinking. This capacity...
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...EFFECTS OF INTEREST RATES ON BUSINESS PERFORMANCE A CASE STUDY: MUKWANO INDUSTRIES (U) LTD BY KATENDE EMMANUEL REGISTRATION NO: 11/2/332/D/645 SUPERVISOR: MR. AMPEREZA MILTON A RESEARCH PROPOSAL SUBMITTED IN PARTIALFULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF A BACHELOR IN BANKING AND INSURANCE AT NDEJJE UNIVERSITY KAMPALA CAMPUS SEPTEMBER, 2012 CHAPTER ONE 1.0 Introduction This study aims at establishing the effects of interest rates on Mukwano industries (U) ltd. This chapter presents background of the study, statement of the problem, purpose of the study, objectives of the study, research questions or hypothesis, scope of the study, significance or justifications to the study and Theoretical framework. 1.1 Background of the study Mukwano Industries (U) Ltd was established in the early 1980s and has evolved to be one the fastest growing fully integrated manufacturer of Fast Moving Consumer Goods (FMCG Products) in Sub Saharan Africa. With the Group's headquarters located on Mukwano Road in Kampala, Uganda's capital city, this multi-activity industrial/trade organization is a family business made up of several associate companies whose current operations include manufacture, sale and distribution of a wide range of consumer products. The associate companies falling under the Mukwano Group include the following: Mukwano Industries (U) Ltd., Mukwano Enterprises (U) ltd, A.K. Plastics (U) ltd, A.K. Oils & Fats (U) ltd, A.K. Detergents (U) ltd, A...
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