Under the arrangement, moreover, a country with efficient production and a favored competitive position (including as enhanced by new capital goods) is rewarded with rising income and reduced unemployment. No grand scheme of state or international planning and direct control is required. Exchange rates are for the most part fixed under the classical gold-flows mechanisms (say, $/£ const. within fixed limits), as stated, and adjustments to trade imbalances take place through price-level changes (e.g., PU.S. versus P. UK ) or product prices (and the special part of product prices called wages) (ullard & Christopher 2004 101). Faced with unemployment, a country's position can be improved by enhancing productivity and having prices on its real goods and services and wages adjust downward relative to those of other countries.
Another way to achieve adjustments in trade positions (or more generally balance of international payments positions) is to have exchange rate changes…...
mlaBibliography
Backus, David, and John Driffill (1985). Inflation and Reputation, American Economic Review 75, 530-538.
Barro, Robert, and David Gordon (1983). Rules, Discretion, and Reputation in a Model of Monetary Policy, Journal of Monetary Economics 12, 101-121.
Barro, Robert, and David Gordon (2003). A Positive Theory of Monetary Policy in a Natural Rate Model, Journal of Political Economy 91, 589-610.
Blinder, Alan S. (1997). What Central Bankers Could Learn from Academics and Vice Versa, Journal of Economic Perspectives 11, 3-20.
Instead of the "invisible hand" of the market creating an money supply/interest rate equilibrium, the Chinese government is doing so by requiring banks to hold more deposits on their balance sheets.
China's announcement will likely affect interest rates quite dramatically in that banks will have more cash on hand to help pad their balance sheets while the money supply stays relatively low. This helps to keep the potential for inflation low, where interest rates begin to rise. As long as there is less money to be lent, or in effect, more money tied up within the banking system that cannot be lent to borrowers, the interest rates will likely remain relatively low (McConnell, Brue, and Flynn, 2008). This helps to combat inflation, or the potential for inflation since other economies like the United States have been printing money to help boost their own economies. These actions by the U.S. will…...
mlaWorks Cited
McConnell, Campbell; Brue, Stanley; and Sean Flynn. (2008). Economics: Principles,
Problems, and Policies. New York: McGraw-Hill.
central banks in developing countries can influence their position on the exchange market through exchange rate interventions. The current exchange rate mechanics are based on a floating exchange rate that is valued based on the market conditions. Any intervention by a central bank should be short lived because the market equilibrium will return to the value of the expectations for the currency that were set in the market. However, many argue that the exchange rate interventions can represent a powerful policy tool for emerging market economies (EMEs).
Since the financial crisis of 2008, there has been a substantial higher volatility in the flow of capital. As a result many of the central banks in EMEs have intervened on a regular basis for the purpose of trying to manage their exchange rate on the global market. The argument is that economic agents, rather than rational expectations, can serve as the primary…...
mlaWorks Cited
Miyajima, K. (2013). Foreign exchange intervation and expectation in emerging economies. Monetary and Economic Department, 1-29.
26)
esearch using a -regression analysis of nations shows that the legal measures of the Central Bank have no relationship with inflation in developed countries, while on the other hand there is a positive relationship between inflation in developing countries and with the regulation of the bank. (Klomp; de Haan, 2010, p. 445) Some examples like ussia, Ukraine, Belarus and Moldova show that the central bank incentive approach, or the roles played by the central banks in ussia, Ukraine, Belarus and Moldova Seem to condone higher inflation rates based on fiscal pressures, and the process of their countries being globalized. Openness of the economy is a new aspect in these nations and the openness will itself reduce inflation and allow the central banks to pursue inflationary policies. And that proves that the Bank would have to play a crucial role in these countries regarding inflation policies. (Hammermann; Flanagan, 2009, p.…...
mlaReferences
Bernanke, Ben S; Laubach, Thomas; Mishkin, Frederic S. 2001., Inflation targeting: lessons from the international experience. Princeton University Press.
Hammermann, Felix; Flanagan, Mark. 2009., What explains persistent inflation differentials across transition economies? Economics of Transition, 17(2), p. 297 -- 328.
Heenan, Geoffrey; Peter, Marcel; Roger, Scott. 2006., Implementing inflation targeting: institutional arrangements, target design, and communications, Issues 2006-2278. IMF Working Paper. International Monetary Fund.
Jacome, Luis Ignacio; Vazquez, Francisco F. 2005., Any link between legal central bank independence and inflation?: Evidence from Latin America and the Caribbean. Issues 2005-2075. IMF Working Paper. International Monetary Fund.
The Canadian Bankers Association Chief Executive Officer Nancy Hughes Anthony stated on June 8, 2010 that the G-20 policy proposals are "too onerous" and "could potentially choke the banking industry (Deslongchamps & Quinn, 2010).
hat is very interesting about all of this rancor is that it appears that Canada's interests are getting sacrificed to benefit Europe. Exactly what is "Canadian" about the bank of Canada or "Federal" about the American Federal Reserve? The author one time heard a joke about the Federal Reserve. hen asked what was federal about it, the punch line was that it was about as federal as FedEx. hile this joke may seem funny, it does make clear a big fact about central banks: they are private institutions that reflect the agenda of larger, non-state actors such as the G-20 that have become bodies that make defacto decisions that affect their member nations (of which Canada…...
mlaWorks Cited
Deslongchamps, Alexandre, & Quinn, Greg. (2010, June 10). Canada's carney says bank rules won't hurt recovery. Bloomberg Businessweek, Retrieved from http://www.businessweek.com/news/2010-06-10/canada-s-carney-says-bank-rules-won-t-hurt-recovery-update2-.html
Fournier, Chris. (2010, July 5). Loonie weakens for second day on reduced rate-rise expectations. Bloomberg Businessweek, Retrieved from http://www.businessweek.com/news/2010-07-05/loonie-weakens-for-second-day-on-reduced-rate-rise-expectations.html .
Rosenberg, David. (2010, May 30). Memo to mr. carney: hold your fire on rate hikes.
Globe and Mail, Retrieved from http://www.theglobeandmail.com/globe-investor/investment-ideas/features/experts-podium/memo-to-mr-carney-hold-your-fire-on-rate-hikes/article1586386/ .
Studies along with archived information will help in terms of data collection methods. I expect to understand in detail the inner workings of certain central banks. I also will be able to determine if central banks are necessary. I also plan and finding what central banks have done to help or deter economic prosperity.
Introduction
entral banks like the Federal Reserve play a crucial role in monitoring and regulating the economy of a country. For the central bank to exist within this role it must have several methods and strategies in place to carry out its purpose, which is to provide financial stability for the country. What is a central bank? What kinds of strategies should be adopted to generate regulation and effective monitoring?
Although the initial role of central banks was developed more than several centuries ago, it was not until the mid-nineteenth century that the power of monopoly came into effect…...
mlaCentral banks like the Federal Reserve play a crucial role in monitoring and regulating the economy of a country. For the central bank to exist within this role it must have several methods and strategies in place to carry out its purpose, which is to provide financial stability for the country. What is a central bank? What kinds of strategies should be adopted to generate regulation and effective monitoring?
Although the initial role of central banks was developed more than several centuries ago, it was not until the mid-nineteenth century that the power of monopoly came into effect for central banks. Central banks could issue banknotes and act as lender of last resort. From that point on the role of central banks was that of liquidity provider and lender of last resort. The intention was to "allow a proper functioning of the payment system, so financial stability was implicitly a major concern for central banks." (Gregorio 2013)
Gradually central banks evolved and began having goals of price stability through controlling inflation. Financial stability took secondary importance. "Moreover, some scholars and practitioners argued that price stability should be the only objective of central banks, so that the goal would be more credible and monetary policy more effective in achieving stability. " (Gregorio 2013) Although there is merit in price stability, it decreases the power overall of the central bank
However, the role of the governments to put their finances in order have taken a new twist with the recent election results where the anti-austerity candidates have won with a sweeping majority. This has put the ECB in the spotlight again because the bank wants the governments to make tough choices to reduce its debt. ECB wants Greece to implement its agreed restructuring plan because it does not want to intervene again until the governments take steps. The ECB does not want the banks and governments to get addicted to the funding it receives and wants them to do their role in the debt crisis as well (Buell, 2012).
The ECB cannot mandate governments to act in a certain way because of the limitations that come with the European Union Treaty. The role of the ECB is highly limited because it does not have over-reaching powers like the Federal eserve in…...
mlaReferences
Kulish, Nicholas. 2012. Central Bank becomes an unlikely hero in Euro crisis. The New York Times. [Online]. 20, January. Available at: [Accessed 9 May 2012].
Buell, Todd. 2012. Political Turmoil throws ECB back in the spotlight. The Wall Street Journal.[Online]. 9, May. Available at:
As a result of the draft, the unemployment rates which had been at record low levels, was able to right itself. Once again, the U.S.'s industry-based economy was able to flourish with new needs to produce and manufacture goods and products to be used globally. The secular tendencies in economic policy responsible for this revival would be continued for several years to come.
Predictably, the end of fascism which concluded with Adolph Hitler's defeat in World War II (in 1945) brought about the reign of a new international terror: communism. The "red scare" would be utilized both domestically and abroad to fuel United States economic interests that would prove influential to the country's history. The relation of the United States' capitalist attempts to combat communism can again be traced back to its central bank, the Federal eserve System, if not in actual case of point then at least symbolically, since…...
mlaReference List
Rockoff, Hugh. (2008) "U.S. Economy in World War I." In Robert Whaples (Ed.), EH.Net Encyclopedia. Retrieved from http:/ / the.net/encyclopedia/article/Rockoff.WWI
Ceccheti, Stephen (1998) "Understanding the Great Depression: Lessons for Current Policy." In Mark Wheeler (Ed.), The Economics of the Great Depression.
Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
Ikenberry, John. (1992) "A World Economy Restored: Expert Consensus and the Anglo-American Postwar Settlement." International Organization 46 (1), 289.
History Of Central Banking in the United States of America
History of Central Banking
This paper discusses the history of central banking system in the United States of America. It analyses the establishment, operations and functions of the central banks that existed in the history of the United States of America. The closing of these historic central banks is also being discussed in the preceding paper. It also puts light on the main functions of the central banks.
History of Central Banking in the United States of America
A central bank can be defined as an authority that is responsible for formulating strategies that directly affect the supply of money and credit in a country. In specific terms a central bank uses its monetary policy tools, including open market operations, discount window lending and changes in reserve requirements, in order to adjust the rates of interest and the monetary base in the short run…...
mlaReferences
Bordo, M.D. Federal Reserve Bank of Cleveland, (2007).A Brief History of Central Bank. Retrieved from Federal Reserve Bank of Cleveland website: http://www.clevelandfed.org/research/commentary/2007/1207.pdf
Broz, J.L. The Massachusetts Institute of Technology, (1998). The Origins of Central Banking: Solutions to the free-rider problem. Retrieved from The Massachusetts Institute of Technology website: http://dss.ucsd.edu/~jlbroz/origins_CBs_IO.pdf
Federal Reserve Bank of Philadelphia, (2009). The First Bank of United States of America. Retrieved from Federal Reserve Bank of Philadelphia website: http://www.philadelphiafed.org/publications/economic-education/first-bank.pdf
Federal Reserve Bank of Philadelphia, (2010). The Second Bank of United States of America. Retrieved from Federal Reserve Bank of Philadelphia website: http://www.philadelphiafed.org/publications/economic-education/second-bank.pdf
Investing
The premise of Modigliani and Miller, that dividend policy is basically irrelevant in that if a firm is growing then an internal dividend is created and the investor may sell shares to capture this dividend, is based on the idea that in today's market fundamentals matter. They do not. Today's market is driven by central bank policy. Quantitative Easing (QE) has so altered the market and eradicated true price discovery that a simple comparison of charts -- one of a global economy that is collapsing and one of a U.S. stock market at all-time highs -- is enough to persuade any rational person that an examination of central bank balance sheets is warranted. Such an examination would uncover trillions in exposure. The Bank of Japan for instance was a top 10 holder of 90% of the Nikkei in April and has only increased its stake since then (Durden). The ECB…...
mlaReferences
Durden, T. (2016). In shocking finding, the Bank of Japan is now a top 10 holder in
90% of Japanese Stocks. Zerohedge. Retrieved from http://www.zerohedge.com/news/2016-04-25/stunning-finding-bank-japan-now-top-10-holder-90-japanese-stocks
Ehrhardt, M., & Brigham, E. (2011). Financial management: Theory and practice (13th
ed.). Mason, OH: Cengage Learning.
Outline: Should Digital Currency eplace Paper Currency in the United States?1. Introductiona. Hooki. Imagine a world where everyone uses electronics or cards to conduct financial transactions? A world where no one exchanges cash or coins for payment for service but a swipe of a fob or press a button, and currency is transferred.b. Preliminary Thesis statementi. In the United States, replacing paper money with digital currency as legal tender will eliminate the requirement for government insurance on deposits with financial institutions while maintaining the currencys liquidity.ii. Some feel that digital currency increases the danger of cyberattacks and weakens the foundation of financial security; however, an increase in Cybersecurity professionals and user privacy protection guidelines will reduce those concerns.2. Body Paragraphsa. History of currency in the U.S.b. Global Impact of U.S. Currencyc. ArgumentDigital currency should replace paper currency as legal tender Argument#1: Digital Currency risk-free liability of the Fed removes…...
mlaReferencesAdrian, T. & Mancini-Griffoli, T. (2021, June). A new era of digital money. International Monetary Fund. Retrieved from 06/online/digital-money-new-era-adrian-mancini-griffoli.htm.Bertaut, C., Beschwitz, B. V. & Curcuru, S. (2021, October 6, 2021). The international role of the U.S. dollar. FEDS Notes. Retrieved from https://www.federalreserve.gov/ econres/notes/feds-notes/the-international-role-of-the-u-s-dollar-20211006.htm.Campbell, C. (2021, August 23). Cash-free society. Time: Innovation, 91-94.FDR takes United States off gold standard, 2021 History. Retrieved from https://www.history.com/this-day-in-history/fdr-takes-united-states-off-gold-standard Ney, J. (2020). The case for the digital dollar: Security at home and abroad. Harvard Kennedy School Review, 20, 74-77.Timberlake, R. H. (2012). From Constitutional to Fiat Money: The U.S. Experience. CATO Journal, 32(2), 349–362.2021 findings from the Diary of Consumer Payment Choice. (2021, June 15). The Federal Reserve. Retrieved from https://www.frbservices.org/news/fed360/issues/061521/cash-2021-findings-diary-consumer-payment-choice .https://www.imf.org/external/pubs/ft/fandd/2021/
In 2003, new procedures were created and they state that "companies accredited with receiving money relating to public subscription in securities must take all necessary measures to ensure the legality of the sources of the money used in the payment of such securities, in compliance with the provisions laid down in the Prevention and Prohibition of Money Laundering and its Implementing egulations" (Terterov and euvid, 2005).
Banking institutions are also focused on reducing money laundering and the principal actions they implement in this endeavor are those of fully complying with the regulations imposed by the central banks and the legislations in their home countries. More recently, the banks can access technological innovations to fight money laundering, such as LexisNexis's Bridger Insight XGTM (Tech 4 Law). But since the access to technologies is different at each bank, a conclusion is drawn that the internal reactions to money laundering are different. The…...
mlaReferences:
Minaeva, T., Aksenova, M., Anti-money laundering in Russia, White & Case, last accessed on July 14, 2010http://www.whitecase.ru/articles/moneylaundry.pdf
Terterov, M., Reuvid, J., 2005, Doing business with Estonia, GMB Publishing Ltd.
Walker, J., 1998, Modeling global money laundering flows -- some findings, last accessed on July 13, 2010http://www.johnwalkercrimetrendsanalysis.com.au/ML%20method.htm
1999, Ten years of combating money laundering, OECD Observer, last accessed on July 13, 2010http://www.oecdobserver.org/news/fullstory.php?aid=63
From its creation to 1988 it undertook banking functions and opined generally on the international banking system.
2. Starting in 1988 it began to assume the role of an unofficial international bank regulator. Although it had no official international status, its members -- central banks of the major banking countries -- were obligated by the nature of their membership to abide by its edicts and the rest of the world took them seriously.
3. Starting in the late 1990s, it began to consider itself the equivalent of an international bank regulator. Every subject of significance was within its jurisdiction and, although its legal powers were no greater, it assumed that it had a right to make rules for local banks to observe in the conduct of their businesses.
4. Sometime in the future there is a widespread anticipation that it will be given, through some treaty mechanism, the power to enforce its…...
mlaBibliography
Baker, James Calvin. The Bank for International Settlements: Evolution and Evaluation. Santa Barbara, CA: Greenwood Publishing Group, 2002.
Birdsall, Nancy. "Whither the IMF in the Current Crisis? Invite the Big Emerging Economies to the Table." 2 October 2008. Center for Global Development. 26 February 2009 http://blogs.cgdev.org/globaldevelopment/2008/10/whither_the_imf_in_the_current.php.
BIS. Bank for International Settlements (BIS). n.d. 25 February 2009 http://www.bis.org/about/index.htm .
Carl Felsenfeld, Genci Bilali. "The Role of the Bank for International Settlements in Shaping the World Financial System." January 2004. Social Science Research Network Electronic Library. 26 February 2009 http://ssrn.com/abstract=496022 .
Bank for International Settlements
The inception of the Bank for International Settlements
The Bank for International Settlements was created in 1930 pursuant to the Young Plan, also known as the Dawes Plan under the Hague Agreement (Baker 2). At its inception, the Bank for International Settlements (BIS) was to assume the responsibilities of the Agent General for Reparations in Berlin which consisted of collecting, administrating and distributing the annuities that were payable as reparations (BIS History -- Overview 1). These original responsibilities were the source of the BIS' name (BIS History- Overview 1). According to the BIS eb site, "The BIS was also created to act as a trustee for the Dawes and Young Loans (international loans issued to finance reparations) and to promote central bank cooperation in general" (BIS History -- Overview 2). As these original responsibilities were satisfied, the purpose of the BIS has also changed as discussed further…...
mlaWorks Cited
About BIS. (2014). The Bank for International Settlements. [online] available: http://www.bis.
org/about/index.htm.
Baker, James C. The Bank for International Settlements: Evolution and Evaluation. Westport,
CT: Quorum Books, 2002.
The increase in profits (at certain points) highlights the overall risks vs. rewards, as they can see substantial growth of 5% each year. Moreover, the performance of various strategies used in management of hedge funds experienced a greater feat, despite having less asset classes to choose from.
Over the years, the hedge fund industry has shown consistent growth and increase in its regulatory issues. This is because managers are using strategies that: increase the overall amounts of risk, while offering the possibility of greater financial rewards. As a result, the odds improve that investors could experience significant losses in these areas (which increases the overall amounts of regulatory scrutiny).
Hedge funds will experience more changes that will lessen its variance in comparison with mutual funds. Where, it will determine its investors and techniques of management without being greatly influenced by: institutionalization or regulation of the finance industry. In 2005, Ibbotson and…...
mlaBibliography
Hedge and Pension Funds, 2011.
Ackermann, C, McEnally R. & Ravenscraft, D 1999, "The performance of hedge funds: Risk, return and incentives." Journal of Finance, 54 (June), pp. 833-874.
Adrian, T 2007, "Measuring risk in the hedge fund sector," Current Issues in Economics and Finance, 13, Federal
Reserve Bank of New York, pp. 1 -- 7.
The money multiplier is a ratio between central bank and commercial bank money and looks at how much commercial bank money can be created with a unit of central bank money. The monetary authorities can influence the supply of money by printing more, but that leads to devaluing of the currency. It is also possible to lower interest rates and make other changes that will lead to an adjustment of the ratio, thus increasing the supply of money and helping the economy. For an essay on this topic, it would be possible to focus on a specific way the economy....
1. The potential impact of central bank digital currencies on the future of cryptocurrency
2. The role of blockchain technology in shaping the future of cryptocurrency
3. Regulatory challenges and opportunities in the development of cryptocurrency
4. The future of cryptocurrency adoption and integration into traditional financial systems
5. The evolving relationship between cryptocurrency and privacy concerns
6. The environmental impact of cryptocurrency mining and sustainable solutions for the future
7. The future of cryptocurrency in global financial markets and economic systems
8. The potential for cryptocurrency to disrupt traditional industries and create new economic opportunities
9. The role of decentralized finance (DeFi) in shaping the future of....
1. The impact of social media sentiment on cryptocurrency prices
2. The role of government regulation in shaping the crypto market
3. Cryptocurrency adoption in developing countries
4. The potential for decentralized finance (DeFi) to revolutionize traditional financial systems
5. Cryptocurrency market manipulation and its implications
6. The environmental implications of cryptocurrency mining
7. The future of stablecoins and their role in the crypto market
8. The rise of non-fungible tokens (NFTs) and their impact on the art market
9. The influence of institutional investors on the cryptocurrency market
10. The challenges and opportunities for mainstream adoption of cryptocurrencies
11. The psychological factors influencing investor behavior in the crypto market
12.....
## Crypto Market Dynamics and Emerging Trends
### 1. Decentralized Finance (DeFi)
- Growth and Innovation: DeFi protocols offer a range of financial services, such as lending, borrowing, and trading, without the need for intermediaries.
- New Tokenomics: DeFi introduces innovative token designs that reward liquidity providers and community members.
- Interoperability: Cross-chain bridges allow users to transfer assets across different blockchains, facilitating DeFi activities.
### 2. Non-Fungible Tokens (NFTs)
- Digital Collectibles and Art: NFTs represent unique and verifiable digital assets, enabling the ownership and trading of digital art, collectibles, and other items.
- New Markets: NFTs create new markets for digital creators, artists, and collectors.
-....
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