Research Topics: Money Supply

AN ESSAY ON MONEY

MONEY               Money plays a central role in determining the course of our everyday life. Prices and inflation are directly linked to the nation’s money supply, and many economists believe that changes in the quantity of money also have important effects on the real economic variable, such as unemployment and gross domestic product, especially in the short run. Yet many of the models that economists use to evaluate fundamental questions relating money and monetary policy to economic activity tend to gloss over the underlying characteristics of the economy that motivate the use of money. Economic models that simply assume currency is valued overlook these characteristics and possibly the important properties of money that influence the way its supply affects the economy. Understanding these properties will provide a better idea of not only the key features of money that associate it with “value” but also how those characteristics affect the link between the quantity of money and aggregate economic activity.             This distinction between the good and the just is prefigured by  distinction. One treats property always as a means to some further end; it treats it teleologically. The pursuit of money for its own sake is unnatural, but it provides an escape from the enslavement that is the necessary consequence of the perfectly natural association. To be natural, the city cannot be a perfect whole. The perfection of the whole would preclude the freedom of the parts. The household is what it is because it exists within a community; to attempt to model the community on the household is to make the mistake of thinking the household would remain what it is without the restraint of the society.  criticizes the explicit teaching of the Republic for not taking into account that, in a city where every woman of a certain age is your mother, you will in fact have no mother. There is no discoverable distinction between the good, understood as the useful, and the just. For,  according to whom nature never makes something with a dual purpose, does not mean to say that we have logos in order to make clear the useful and harmful and also the just and the unjust. He means, rather, that the purpose of logos is to make it possible to indicate the useful and the harmful so as also to indicate the just and the unjust. It is by indicating the use of things that we come willy-nilly to the question of justice and injustice. This is what it means for the household is the central ground of the good life.             ‘s terminology is very loose, and perhaps because of this the translations do not always distinguish carefully or consistently in ‘s “true wealth”, or wealth getting which aim at them respectively. This is a common fault, which often obscures  ‘s thought. There is another variety of the art of acquisition which is commonly and rightly called the art of making money, and it has in fact suggested the notion that wealth and property have no limit’.             gives us an account of nature in the Physics which is adequate for his immediate purposes there, but gives little indication of his broad deployment in the ethical and political works of the concept of the natural. He never systematically investigates nature as an ethical or political concept. Had he done so, he could not have failed to see that there are some tensions within the roles he assigns to the natural. He might thereby have avoided several problems, including one of his most unfortunate legacies that of reactionary political attitudes which have appealed to nature, often in  ‘s name, to uphold existing inequalities in society, such as slavery and the subordination of women. Some of this legacy has got attached to unfairly; appeals to his works to defend race based forms of slavery, for example, are patently specious. However, ‘s own lack of precision about the role of nature in his ethical and political arguments must bear some of the responsibility.             prepares the ground for his own account of happiness by saying that the good we are looking for must be an end with two special properties. First, it must be a specially end: it must to use a more traditional translation be perfect by comparison with other ends. That is to say, it must be something sought always for its own sake and never for the sake of anything else. Secondly, it must be self sufficient that is, it must be something which taken on its own makes life worth while and lacking in nothing.             Happiness as  says, has both these properties. What then is happiness? To elucidate this we must consider the function of man. Man must have a function because particular types of men (e.g. sculptors) do, and parts and organs of human beings do. What is it? Not life, not at least the life of growth and nourishment, for this is shared by plants, nor the life of the senses, for this is shared by animals. It must be a life of reason concerned with action: the activity of the soul in accordance with reason. So the good of man will be his good functioning: the activity of soul in accordance with virtue. If there are several virtues, it will be in accordance with the best and most perfect virtue.             does not maintain that a happy man is self sufficient he makes this plain when he discusses the question whether a happy man needs friends but he does think that contemplation alone is sufficient to make a man happy, and he gives as a reason for identifying happiness with contemplation that the contemplative approaches self sufficiency more closely than the pursuer of the active life. The contemplative, no less than the just man, will need the necessities of life, but he will not need beneficiaries of his well doing, and he will be able to theorize alone, even though he will do it better with colleagues. Simple Living and American Dreams             The American dream was never meant to be a zero sum solution: the goal has always been to end up with more than you started with. Even the Puritans, whose dream in its purest formulation was about as selfless as any in American history, and who were as skeptical of human will as any people in the Western world of the last five hundred years, nevertheless acted from this premise. There’s really no other way to understand their migration except as motivated by a belief that it could procure some gain, if not for themselves in providing a reassuring sense of purpose, then at least for the good of their children and community, who might yet be saved even if they themselves were not. Other believers then and since were not nearly as circumspect about their errands in the wilderness, acting with confidence that they could secure their futures in the next world through good works in this one. In all these cases, however, this was the dream of the good life as a spiritual affair.             The idea of the american dream has been attached to everything from religious freedom to a home in the suburbs, and it has inspired emotions ranging from deep satisfaction to disillusioned fury. Nevertheless, the phrase elicits for most americans some variant fantasy of a new world where anything can happen and good things might.             Millions of immigrants and internal migrants have moved to America, and around within it, to fulfill their version of the american dream. By objective measures and their own accounts, many have achieved success. Probably just as many have been defeated and disillusioned. Millions of other immigrants were moved to America despite their preferences and have been forced to come to terms with a dream that was not originally theirs. How they have done so, and how their experiences compare with those who came to America to seek their dream.             But one cannot address that subject, nor eventually move beyond it to evaluate the future of the American dream and its society, without knowing what the dream is and how it operates.             The pursuit of success warrants so much fervor because it is associated with virtue. “Associated with” means at least four things: virtue leads to success, success makes a person virtuous, success indicates virtue, or apparent success is not real success unless one is also virtuous.             That quintessential American, , conversely, Proverbial sentences, chiefly such as inculcated industry and frugality as “the Means of procuring wealth and thereby securing virtue, it being more difficult for a man in want to act always honestly, as it is hard for an empty sack to stand upright.” Finally, mere wealth may actually impede true success, the attainment of which requires a long list of virtues. Americans have learned  ‘s lessons well: they distinguish between the worthy and unworthy rich, as well as the deserving and undeserving poor. For example, most Americans characterize “yuppies” as people who “play fashionable games” and “eat in trendy restaurants,” and on the whole they enjoy watching such forms of conspicuous consumption. But they also characterize yuppies as selfish, greedy, inclined to flaunt their wealth, and imbued with a false sense of superiority.             There is no doubt where  stands in the confrontation between spiritual and material values. He tells us that “wealth itself is a curse because, it enslaves us” Trade and money are unequivocally deprecated as measures of worth. Thoreau contrasts the miserly legal owner of the land with persons like himself, whose love and enjoyment of it are not profit oriented. He plays off multiple meanings dazzlingly, noting that any un-saleable aspect of the landscape is worthless to the farmer: “there was nothing to redeem it, forsooth, in his eyes.” In the word “redeem” we hear both economic and religious reverberations. Combining the values of a pawnbroker with those of a preacher, the farmer reveals that for him monetary and religious “redemption” are one and the same. Speaking of this same farmer,  it was no privilege to him to behold, i.e., he does not exercise the real and inherent “privilege,” or advantage, of living on the land, but merely holds his legal “privilege,” or title. On this man’s farm nothing grows free, nothing grows unconstrained and unregulated because nothing is without its price.             Certainly, it is no secret that concerns spending. To discover how to earn and spend our wakeful hours whatever we are doing is the task of as a whole. does not permit these terms to rest drowsily in a context of financial loss and gain. Rather, he wakes them, makes them metaphors for forgotten spiritual and organic values. He subverts both the business ethic and the dull round of language itself. Each economic word contains within it an alarm of meaning that prevents us from falling into a sleepy discourse with the surface of the text. Credit:ivythesis.typepad.com

AN ESSAY ON MONEY

MONEY Money plays a central role in determining the course of our everyday life. Prices and inflation are directly linked ...

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”?   Introduction               Income is the most important determinant of how much money a person has because it is measurable. It is one of the bases of an individual and a household’s quality of life. There is a positive relationship between income and quality of life, which means that the more money a person has the higher the measures of quality of life. This is because money is the means by which individuals provide for their needs and wants. The determinant of the issue on income equality is the corresponding equality in the opportunity provided to individuals to earn the amount of money they desire. Settling the issue on equal opportunity to earn money involves the consideration of the differing views and the synthesizing the different points to derive a conclusion.   Views on the Issue                           There are two perspectives on the equality of opportunities to earn money. First, the naturalist perspective propounds that that all people have equal opportunities because of common natural characteristics and inclinations.  shows that the fear of death and the desire to survive characterize all men so that when faced with impending death, man naturally develops the instinct to survive.  states that all men are equal and independent in the state of nature .  states that in the state of nature men enjoy equality in the opportunity for survival . Contemporary view on the nature of man shows that every person has equal opportunities to engage in activities to earn money.   Every person has the physical and mental ability to determine moneymaking opportunities and to take advantage of that opportunity. However, this view does not belie the fact that there are physical and mental differences expressed by society’s distinctions of the physically and mentally challenged relative to the general population. There are also differences underlying the issues of gender and racial discrimination. Regardless of these differences, this view proposes that equal opportunities to make money persist because of the basic inclination of man to survive. The drive to survive constitutes the equalizing factor among all people regarding the opportunity to earn money.   However, this perspective looks at the ideal man and does not consider real specific conditions of different people. Income earnings of people exemplify the real situation of people in terms of opportunities to earn money. Current data shows that there is a gap between the rich and poor, which is continuously widening. The aggregate wealth of the top 50 riches individuals in the world exceeds the income received by 416 million poor people. There are 2.5 million people receiving only an income of a day constituting 40 percent of world population and 5 percent of global income while 10 percent of the world’s population receives 54 percent of global income.  In the United States, there is a distinct difference in average income based on race. The average income for whites reached ,964 while the median income for blacks is ,177.   Thus, the facts show that in actual human experience there is a difference in the income received by individuals. The difference in income correlates to the factors preventing people from having equal opportunities to own money.   Second, the relativist perspective proposes that there is no equal opportunity to earn money because of the inequality in human relations. Differences in the physical and psychological characteristics of man determine the opportunities open to them. The view is originates from developing countries experiencing the difference in the income they earn from other states translating to the differences in income of their respective citizens. The core argument of the relativists is that opportunities are created , relative to the natural existence based on naturalist perspective, by the innate inequalities in human relations in society.   Social values determine the opportunities open to people to earn money. Traditional perspective allots greater opportunities to men relative to women to study and find high-income jobs. Prior to the abolition of slavery in the United States and many years after that, white people were given greater opportunities to study and work in high-income professional jobs relative to colored people. These inequalities in opportunities are expressed in other relations. In reality the opportunities to make money depends upon the extent that society permits individuals to take advantage of these opportunities. Regardless of the physical and mental ability of person to determine opportunities and take advantage of these opportunities social norms may prevent people from earning money equally. There are many people with the physical and psychological ability to go to work but these people are unemployed. There are also people willing to work who are terminated due to financial considerations of their firm. These examples show that the opportunity to earn money is not equally present among different people.   Conclusion               People create opportunities to make money but the actualization or realization of opportunities is limited by societal norms because of the inequalities in human relations. The naturalist view that the natural drive of individuals to survive and the physical and mental abilities of people to take advantage of opportunities commonly exist among individuals cannot be supported by real conditions of different people. The relativist view that people create opportunities but are limited by societal norms captures more actual situations. The inequality in opportunities to earn income is expressed by inequality in income and standard of living among different people. Credit:ivythesis.typepad.com

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”? Introduction Income is the most important determinant of how much money ...

Importance of Money

Money               The importance of money is expressed and manifested in different ways. By looking and analyzing into its economical, political, social and cultural images we can easily have the grasp of its importance. By focusing our attention into these factors we can clearly underline its significance.             Money in the Marxian tradition represents the value of labor by the workers exploited by the capitalist society. The claim is that money is the image that reflects the value of man’s labor.             In sociological perspective, what man strives to acquire money is to gain a social status in the society. The importance of such acquisition of money to gain status is essential to the development of one’s relationships with others and one’s development of self-esteem.             Yet, more than a social status is the political behavior of gaining power for control and manipulation. In this view, one who accumulated enough monetary resources is tantamount of gaining enough power for influence, control, and manipulation.             Essential to money is its economic function for exchange of goods, services, and products. Fundamental to the human living is the circulation and use of money compared to other kinds of resources.             The offshoot of money is manifested and portrayed on how society becomes progressive and developed by taking more advanced action for technological development and scientific researches. One of the best examples is the creation of a global economy in which business sector runs its machine. Credit:ivythesis.typepad.com

Importance of Money

Money The importance of money is expressed and manifested in different ways. By looking and analyzing into its economical,...

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”?   Introduction               Income is the most important determinant of how much money a person has because it is measurable. It is one of the bases of an individual and a household’s quality of life. There is a positive relationship between income and quality of life, which means that the more money a person has the higher the measures of quality of life. This is because money is the means by which individuals provide for their needs and wants. The determinant of the issue on income equality is the corresponding equality in the opportunity provided to individuals to earn the amount of money they desire. Settling the issue on equal opportunity to earn money involves the consideration of the differing views and the synthesizing the different points to derive a conclusion.   Views on the Issue                           There are two perspectives on the equality of opportunities to earn money. First, the naturalist perspective propounds that that all people have equal opportunities because of common natural characteristics and inclinations.  shows that the fear of death and the desire to survive characterize all men so that when faced with impending death, man naturally develops the instinct to survive. ()  states that all men are equal and independent in the state of nature (). states that in the state of nature men enjoy equality in the opportunity for survival (). Contemporary view on the nature of man shows that every person has equal opportunities to engage in activities to earn money.   Every person has the physical and mental ability to determine moneymaking opportunities and to take advantage of that opportunity. However, this view does not belie the fact that there are physical and mental differences expressed by society’s distinctions of the physically and mentally challenged relative to the general population. There are also differences underlying the issues of gender and racial discrimination. Regardless of these differences, this view proposes that equal opportunities to make money persist because of the basic inclination of man to survive. The drive to survive constitutes the equalizing factor among all people regarding the opportunity to earn money.   However, this perspective looks at the ideal man and does not consider real specific conditions of different people. Income earnings of people exemplify the real situation of people in terms of opportunities to earn money. Current data shows that there is a gap between the rich and poor, which is continuously widening. The aggregate wealth of the top 50 riches individuals in the world exceeds the income received by 416 million poor people. There are 2.5 million people receiving only an income of a day constituting 40 percent of world population and 5 percent of global income while 10 percent of the world’s population receives 54 percent of global income. () In the United States, there is a distinct difference in average income based on race. The average income for whites reached ,964 while the median income for blacks is ,177. () Thus, the facts show that in actual human experience there is a difference in the income received by individuals. The difference in income correlates to the factors preventing people from having equal opportunities to own money.   Second, the relativist perspective proposes that there is no equal opportunity to earn money because of the inequality in human relations. Differences in the physical and psychological characteristics of man determine the opportunities open to them. The view is originates from developing countries experiencing the difference in the income they earn from other states translating to the differences in income of their respective citizens. The core argument of the relativists is that opportunities are created (), relative to the natural existence based on naturalist perspective, by the innate inequalities in human relations in society.   Social values determine the opportunities open to people to earn money. Traditional perspective allots greater opportunities to men relative to women to study and find high-income jobs. Prior to the abolition of slavery in the United States and many years after that, white people were given greater opportunities to study and work in high-income professional jobs relative to colored people. These inequalities in opportunities are expressed in other relations. In reality the opportunities to make money depends upon the extent that society permits individuals to take advantage of these opportunities. Regardless of the physical and mental ability of person to determine opportunities and take advantage of these opportunities social norms may prevent people from earning money equally. There are many people with the physical and psychological ability to go to work but these people are unemployed. There are also people willing to work who are terminated due to financial considerations of their firm. These examples show that the opportunity to earn money is not equally present among different people.   Conclusion               People create opportunities to make money but the actualization or realization of opportunities is limited by societal norms because of the inequalities in human relations. The naturalist view that the natural drive of individuals to survive and the physical and mental abilities of people to take advantage of opportunities commonly exist among individuals cannot be supported by real conditions of different people. The relativist view that people create opportunities but are limited by societal norms captures more actual situations. The inequality in opportunities to earn income is expressed by inequality in income and standard of living among different people. Credit:ivythesis.typepad.com

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”? Introduction Income is the most important determinant of how much money ...

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”?   Introduction               Income is the most important determinant of how much money a person has because it is measurable. It is one of the bases of an individual and a household’s quality of life. There is a positive relationship between income and quality of life, which means that the more money a person has the higher the measures of quality of life. This is because money is the means by which individuals provide for their needs and wants. The determinant of the issue on income equality is the corresponding equality in the opportunity provided to individuals to earn the amount of money they desire. Settling the issue on equal opportunity to earn money involves the consideration of the differing views and the synthesizing the different points to derive a conclusion.   Views on the Issue                           There are two perspectives on the equality of opportunities to earn money. First, the naturalist perspective propounds that that all people have equal opportunities because of common natural characteristics and inclinations.  shows that the fear of death and the desire to survive characterize all men so that when faced with impending death, man naturally develops the instinct to survive. ()  states that all men are equal and independent in the state of nature (). states that in the state of nature men enjoy equality in the opportunity for survival (). Contemporary view on the nature of man shows that every person has equal opportunities to engage in activities to earn money.   Every person has the physical and mental ability to determine moneymaking opportunities and to take advantage of that opportunity. However, this view does not belie the fact that there are physical and mental differences expressed by society’s distinctions of the physically and mentally challenged relative to the general population. There are also differences underlying the issues of gender and racial discrimination. Regardless of these differences, this view proposes that equal opportunities to make money persist because of the basic inclination of man to survive. The drive to survive constitutes the equalizing factor among all people regarding the opportunity to earn money.   However, this perspective looks at the ideal man and does not consider real specific conditions of different people. Income earnings of people exemplify the real situation of people in terms of opportunities to earn money. Current data shows that there is a gap between the rich and poor, which is continuously widening. The aggregate wealth of the top 50 riches individuals in the world exceeds the income received by 416 million poor people. There are 2.5 million people receiving only an income of a day constituting 40 percent of world population and 5 percent of global income while 10 percent of the world’s population receives 54 percent of global income. () In the United States, there is a distinct difference in average income based on race. The average income for whites reached ,964 while the median income for blacks is ,177. () Thus, the facts show that in actual human experience there is a difference in the income received by individuals. The difference in income correlates to the factors preventing people from having equal opportunities to own money.   Second, the relativist perspective proposes that there is no equal opportunity to earn money because of the inequality in human relations. Differences in the physical and psychological characteristics of man determine the opportunities open to them. The view is originates from developing countries experiencing the difference in the income they earn from other states translating to the differences in income of their respective citizens. The core argument of the relativists is that opportunities are created (), relative to the natural existence based on naturalist perspective, by the innate inequalities in human relations in society.   Social values determine the opportunities open to people to earn money. Traditional perspective allots greater opportunities to men relative to women to study and find high-income jobs. Prior to the abolition of slavery in the United States and many years after that, white people were given greater opportunities to study and work in high-income professional jobs relative to colored people. These inequalities in opportunities are expressed in other relations. In reality the opportunities to make money depends upon the extent that society permits individuals to take advantage of these opportunities. Regardless of the physical and mental ability of person to determine opportunities and take advantage of these opportunities social norms may prevent people from earning money equally. There are many people with the physical and psychological ability to go to work but these people are unemployed. There are also people willing to work who are terminated due to financial considerations of their firm. These examples show that the opportunity to earn money is not equally present among different people.   Conclusion               People create opportunities to make money but the actualization or realization of opportunities is limited by societal norms because of the inequalities in human relations. The naturalist view that the natural drive of individuals to survive and the physical and mental abilities of people to take advantage of opportunities commonly exist among individuals cannot be supported by real conditions of different people. The relativist view that people create opportunities but are limited by societal norms captures more actual situations. The inequality in opportunities to earn income is expressed by inequality in income and standard of living among different people. Credit:ivythesis.typepad.com

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”? Introduction Income is the most important determinant of how much money ...

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”?   Introduction               Income is the most important determinant of how much money a person has because it is measurable. It is one of the bases of an individual and a household’s quality of life. There is a positive relationship between income and quality of life, which means that the more money a person has the higher the measures of quality of life. This is because money is the means by which individuals provide for their needs and wants. The determinant of the issue on income equality is the corresponding equality in the opportunity provided to individuals to earn the amount of money they desire. Settling the issue on equal opportunity to earn money involves the consideration of the differing views and the synthesizing the different points to derive a conclusion.   Views on the Issue                           There are two perspectives on the equality of opportunities to earn money. First, the naturalist perspective propounds that that all people have equal opportunities because of common natural characteristics and inclinations.  shows that the fear of death and the desire to survive characterize all men so that when faced with impending death, man naturally develops the instinct to survive. ()  states that all men are equal and independent in the state of nature (). states that in the state of nature men enjoy equality in the opportunity for survival (). Contemporary view on the nature of man shows that every person has equal opportunities to engage in activities to earn money.   Every person has the physical and mental ability to determine moneymaking opportunities and to take advantage of that opportunity. However, this view does not belie the fact that there are physical and mental differences expressed by society’s distinctions of the physically and mentally challenged relative to the general population. There are also differences underlying the issues of gender and racial discrimination. Regardless of these differences, this view proposes that equal opportunities to make money persist because of the basic inclination of man to survive. The drive to survive constitutes the equalizing factor among all people regarding the opportunity to earn money.   However, this perspective looks at the ideal man and does not consider real specific conditions of different people. Income earnings of people exemplify the real situation of people in terms of opportunities to earn money. Current data shows that there is a gap between the rich and poor, which is continuously widening. The aggregate wealth of the top 50 riches individuals in the world exceeds the income received by 416 million poor people. There are 2.5 million people receiving only an income of a day constituting 40 percent of world population and 5 percent of global income while 10 percent of the world’s population receives 54 percent of global income. () In the United States, there is a distinct difference in average income based on race. The average income for whites reached ,964 while the median income for blacks is ,177. () Thus, the facts show that in actual human experience there is a difference in the income received by individuals. The difference in income correlates to the factors preventing people from having equal opportunities to own money.   Second, the relativist perspective proposes that there is no equal opportunity to earn money because of the inequality in human relations. Differences in the physical and psychological characteristics of man determine the opportunities open to them. The view is originates from developing countries experiencing the difference in the income they earn from other states translating to the differences in income of their respective citizens. The core argument of the relativists is that opportunities are created (), relative to the natural existence based on naturalist perspective, by the innate inequalities in human relations in society.   Social values determine the opportunities open to people to earn money. Traditional perspective allots greater opportunities to men relative to women to study and find high-income jobs. Prior to the abolition of slavery in the United States and many years after that, white people were given greater opportunities to study and work in high-income professional jobs relative to colored people. These inequalities in opportunities are expressed in other relations. In reality the opportunities to make money depends upon the extent that society permits individuals to take advantage of these opportunities. Regardless of the physical and mental ability of person to determine opportunities and take advantage of these opportunities social norms may prevent people from earning money equally. There are many people with the physical and psychological ability to go to work but these people are unemployed. There are also people willing to work who are terminated due to financial considerations of their firm. These examples show that the opportunity to earn money is not equally present among different people.   Conclusion               People create opportunities to make money but the actualization or realization of opportunities is limited by societal norms because of the inequalities in human relations. The naturalist view that the natural drive of individuals to survive and the physical and mental abilities of people to take advantage of opportunities commonly exist among individuals cannot be supported by real conditions of different people. The relativist view that people create opportunities but are limited by societal norms captures more actual situations. The inequality in opportunities to earn income is expressed by inequality in income and standard of living among different people. Credit:ivythesis.typepad.com

Do we all get an “equal crack at the dough

Do we all get an “equal crack at the dough”? Introduction Income is the most important determinant of how much money ...

US CURRENT ACCOUNT DEFICIT

US CURRENT ACCOUNT DEFICIT               In line with the economic situation of the United States, it can be said that the US dollar had been declining in the past three years while the current account deficit of the nation has expanded. This paper will give emphasis to the current account deficit faced by the US ( 2005). It can be said that Deficit can emerge if the currency moves above the sustainable real exchange rate and only a real depreciation can eliminate such a deficit. It is noted that the US current account deficit has been increasing enormously since the early 1990s. In year 2000, the US CAD have surpasses even those of the era and in the year 2004 such deficit has been projected to set a new record. A current account deficit has been defined as the difference between the nations’ saving and national investments. The deficit can be perceived as sustainable or unsustainable depending on the source of the discrepancies. It can also be noted as productive or unproductive. The factors that affect the USCAD have been coined to change in recent years. In the early years of 1990s, it is noted that there is only moderate national savings having a large inflows of foreign savings.  Such event sustained the rising investment. The rising current account deficits of the United States had been noticed by the media and regarded as one of the problems which should be given attention by the federal government.             In order to solve such issue the federal government of the US must be able to implement effective and long-term approaches.  To finance the CAD, the federal government must import about trillion of foreign capital each year and approximately billion per working day. However, this suggestion is unattainable and impossible to reach, specifically for Hence, if the federal government could not solve such problem in a long-term solution, it would be more helpful to consider short-term plan.  Herein, the federal government can use a three part packaged approach which include credible, reliable, sizable reduction in the budget deficit of the US, a gradual and continuous but substantial rearrangement of exchange rates and the expansion of domestic demand in larger and stable economies outside the US. Having good relation with other nation is another factor to reduce current account deficits.             The federal government must also look for alternative solutions on how to acquire capital investments in a slow but sure manner.  In addition, the federal government should be able to maximise its resources and use this effectively. It is also a possible that the federal government fiscal accounts can be reduced for the reduction of current account deficits.             And most especially, to be able to solve such problem regarding current account deficit, it can be concluded that responsible and efficient policies should be implemented before encountering bigger problems caused by such deficits.     Credit:ivythesis.typepad.com

US CURRENT ACCOUNT DEFICIT

US CURRENT ACCOUNT DEFICIT In line with the economic situation of the United States, it can be said that the US dollar had...

Control of Money Supply and the Bank of England

Control of Money Supply and the Bank of England Introduction             By definition, money pertains to any medium that enable trade or exchange of goods between people. The history of money dates back to the time when the barter system was still practiced. In this trade system, commodities are directly exchanged for other goods; for instance, farms animals are exchanged for fabric. Considering that commodities have different value, different countries developed standard values for each commodity for easier trade deals. These commodities are then valued according to their durability, divisibility and scarcity. Through this new practice, precious metals were introduced as the standard currency. It was during 400 BC when the Chinese used bronze, silver and gold coins to purchase goods. In some other parts of the world, gold nuggets, cowrie shells, copper, cacao bean, ivory and whale’s teeth were also used as money. Transporting precious coins can be dangerous as well as bulky; thus, traders would usually entrust their coins to goldsmiths in exchange of paper receipts. Eventually, the credibility of these paper receipts had become at par with the real coins, giving rise to another form of currency known as fiat or paper money.               As an important aspect of economy and trade, controlling the supply of money within a country is essential. Money supply refers to the total assets circulating that are acceptable in the trading of goods. This is primarily made up of cash and bank deposits. This has been explained through Fisher’s equation where MV = PT (M is for money supply; V is for velocity of circulation; P is the average prices; and T is the number of transactions). The supply of money is typically measured to monetary aggregates from M0 to M5. It is essential that money supply is monitored; otherwise, high amounts of money with too few goods available can cause upward pressures on prices, resulting to inflation. On intensive cases, inflation can negatively affect businesses in the country and lead to poor living conditions among the people. In UK, the Bank of England is in charge supply of money in line with its duty to protect its local economy. In this essay, the factors indicating the Bank’s control over the quantity of money will be discussed.   The Bank of England (BOE)             In 1694, the Bank of England was established as a joint stock company in return for a 1.2 million pound loan to the government. Aside from performing commercial activities, BOE is also expected to manage the accounts of the government and assist its funding requirements. Soon, BOE provided settlement services between banks as well as took the responsibility for maintaining the stability of the country’s banking system by means of acting as a lender of last resort. Over the years, the Bank’s central independence led to the development of the Bank of England in 1998. This in turn gave BOE the freedom to set its interest rate. However, the government set its inflation target to 2%; moreover, it is required that the operations of BOE must support the economic policy of the local administration (2002). The Bank of England Act indicates that BOE must maintain price stability and promoting the economic policy of the government by ensuring growth and employment. Along with this act is the utilization of the new monetary policy framework of UK. In addition, various measures are currently in use to monitor the country money supply (2001). The following section identifies these measures.   Measures of Money Supply and Control             Based on the IMF manual, the supply of money can be determined by combining the central bank’s current liabilities and the banking system’s deposit liabilities that are both held by the households, companies, non-profit organizations and public sectors outside the central government. This can be determined by standard monetary aggregates from M0 to M5. In the case of the Bank of England, two money aggregates are used to measure money supply. These are the base money (M0) and the broad money (M4).   Base money pertains to the currency that is in the hands of the public in addition to the reserves held by the commercial banks. The M0 is also known as the reserve money and monetary base, which is controlled by the central bank or monetary authority. On the other hand, M4 or L is M3 in addition to pension funds, treasury bills and negotiable bonds. This is also called very broad money that is used as a measure for fairly liquid assets. Generally, M4 covers most instruments traded in the money markets. Since the BOE is part of the European Union (EU), the Bank also used another monetary aggregate known as M3H. The purpose of this monetary aggregate is to coordinate the meaning of broad money within the union. This is basically made up of M4 in addition to British public entities’ foreign and sterling currency deposits in Britain’s monetary financial institutions and private sectors (). With the monetary aggregates used by the Bank of England, this indicates that BOE has a strong control over the quantity of money.   Another factor indicating BOE’s control for UK’s money supply is the presence of the Divisia money. This refers to the weighted average of money holdings from various groups or sectors wherein the weight of the money component is based on its usefulness in transactions. Examples of which are notes and coins that pay no interest and are generally useful for transactions. On the other hand, building society deposits require higher interest payments and are not as useful in transactions, resulting to a lower money component weight. This monetary aggregate is a part of BOE’s operations and has in fact been improved in 2004.   Specifically, changes involved the use interest rates instead of quotes. Rather than base the benchmark interest rate on local government bill rates, the interest rates are now calculated through the envelope techniques where the highest rate in the component series serve as the benchmark rate (2005). The implementation of these changes not only aims to enhance the appeal and accuracy of the Divisia money as a measure but also emphasizes the significant control of the Bank over the country’s money supply.   Finally, the integration of the new monetary policy in UK is observed through the main operation of the BOE. Specifically, this monetary policy aims to utilize a more transparent system, giving rise to open market operations. In this policy, the Bank targets a 14-day interest maturity rate. Considering that the reserve requirements are non-existent and all accounts must be settled by the end of the day, BOE create reserve shortages within the market in such a way that the entire system must come to the Bank for liquidity. BOE then sets the rate for the provision of liquidity to the market (2001).   In the beginning, the new policy framework seems to be doing its purpose. During the 1980s the average inflation was at 7% and about 4.25% over the 1990 to 1997 period. However, yearly RPIX inflation from May 1997 to March 2001 has been at 2.4% that is slightly below the target rate. Nonetheless, it should be noted that the introduction of the new monetary policy has made the inflation rate stable. In June 1995, the announced inflation target was at 2.5% or less; however, inflation expectation was still at four percent until 2005. Market measures of inflation sharply fell on May 1997, resulting to the development of the new monetary policy. Since then, expectations have fallen to levels that are slightly below the target, suggesting the strong faith the markets have for the new monetary framework.   Conclusion             Controlling the supply of money is generally an important responsibility of each nation so as to support continuous economic growth and development. In the case of UK, several factors have indicated the authority of the Bank of England over its money supply. These include the utilization of monetary aggregates, the inclusion of interest rate determination in the Bank’s operations and the development of the new monetary policy in the country that involves the open market operations. In addition, the role of the BOE in the country banking system indicates its ability to control the quantity of money. These include its ability to limit the amount of bank deposits banks can have, force up rates of interest to discourage customers from making loans as well as reduce the level of liquid assets. Considering that the BOE issues coins and notes, the amount of cash in the money supply can easily be controlled.   However, it should be considered that the major part of the money supply is not generated by the Bank of England. Since money is distributed to several holders, the Bank cannot have full control over all money holders. Moreover, the behavior of the retail banks as well as the customers cannot be manipulated by the Bank either. In conclusion, while the Bank of England may have a certain degree of control of over the quantity of money circulating in the UK economy, other factors limit this authority.             Credit:ivythesis.typepad.com

Control of Money Supply and the Bank of England

Control of Money Supply and the Bank of England Introduction By definition, money pertains to any medium that enable tra...

MONEY

MONEY               Money plays a central role in determining the course of our everyday life. Prices and inflation are directly linked to the nation’s money supply, and many economists believe that changes in the quantity of money also have important effects on the real economic variable, such as unemployment and gross domestic product, especially in the short run. Yet many of the models that economists use to evaluate fundamental questions relating money and monetary policy to economic activity tend to gloss over the underlying characteristics of the economy that motivate the use of money. Economic models that simply assume currency is valued overlook these characteristics and possibly the important properties of money that influence the way its supply affects the economy. Understanding these properties will provide a better idea of not only the key features of money that associate it with “value” but also how those characteristics affect the link between the quantity of money and aggregate economic activity.             This distinction between the good and the just is prefigured by Aristotle’s distinction. One treats property always as a means to some further end; it treats it teleologically. The pursuit of money for its own sake is unnatural, but it provides an escape from the enslavement that is the necessary consequence of the perfectly natural association. To be natural, the city cannot be a perfect whole. The perfection of the whole would preclude the freedom of the parts. The household is what it is because it exists within a community; to attempt to model the community on the household is to make the mistake of thinking the household would remain what it is without the restraint of the society.  criticizes the explicit teaching of the Republic for not taking into account that, in a city where every woman of a certain age is your mother, you will in fact have no mother. There is no discoverable distinction between the good, understood as the useful, and the just. For Aristotle, according to whom nature never makes something with a dual purpose, does not mean to say that we have logos in order to make clear the useful and harmful and also the just and the unjust. He means, rather, that the purpose of logos is to make it possible to indicate the useful and the harmful so as also to indicate the just and the unjust. It is by indicating the use of things that we come willy-nilly to the question of justice and injustice. This is what it means for the household is the central ground of the good life.              terminology is very loose, and perhaps because of this the translations do not always distinguish carefully or consistently in Aristotle’s “true wealth”, or wealth getting which aim at them respectively. This is a common fault, which often obscures Aristotle’s thought. There is another variety of the art of acquisition which is commonly and rightly called the art of making money, and it has in fact suggested the notion that wealth and property have no limit’.             e gives us an account of nature in the Physics which is adequate for his immediate purposes there, but gives little indication of his broad deployment in the ethical and political works of the concept of the natural. He never systematically investigates nature as an ethical or political concept. Had he done so, he could not have failed to see that there are some tensions within the roles he assigns to the natural. He might thereby have avoided several problems, including one of his most unfortunate legacies that of reactionary political attitudes which have appealed to nature, often in Aristotle’s name, to uphold existing inequalities in society, such as slavery and the subordination of women. Some of this legacy has got attached to  unfairly; appeals to his works to defend race based forms of slavery, for example, are patently specious. However, Aristotle’s own lack of precision about the role of nature in his ethical and political arguments must bear some of the responsibility.              prepares the ground for his own account of happiness by saying that the good we are looking for must be an end with two special properties. First, it must be a specially end: it must to use a more traditional translation be perfect by comparison with other ends. That is to say, it must be something sought always for its own sake and never for the sake of anything else. Secondly, it must be self sufficient that is, it must be something which taken on its own makes life worth while and lacking in nothing.             Happiness as  says, has both these properties. What then is happiness? To elucidate this we must consider the function of man. Man must have a function because particular types of men (e.g. sculptors) do, and parts and organs of human beings do. What is it? Not life, not at least the life of growth and nourishment, for this is shared by plants, nor the life of the senses, for this is shared by animals. It must be a life of reason concerned with action: the activity of the soul in accordance with reason. So the good of man will be his good functioning: the activity of soul in accordance with virtue. If there are several virtues, it will be in accordance with the best and most perfect virtue.              does not maintain that a happy man is self sufficient he makes this plain when he discusses the question whether a happy man needs friends but he does think that contemplation alone is sufficient to make a man happy, and he gives as a reason for identifying happiness with contemplation that the contemplative approaches self sufficiency more closely than the pursuer of the active life. The contemplative, no less than the just man, will need the necessities of life, but he will not need beneficiaries of his well doing, and he will be able to theorize alone, even though he will do it better with colleagues. Simple Living and American Dreams             The American dream was never meant to be a zero sum solution: the goal has always been to end up with more than you started with. Even the Puritans, whose dream in its purest formulation was about as selfless as any in American history, and who were as skeptical of human will as any people in the Western world of the last five hundred years, nevertheless acted from this premise. There’s really no other way to understand their migration except as motivated by a belief that it could procure some gain, if not for themselves in providing a reassuring sense of purpose, then at least for the good of their children and community, who might yet be saved even if they themselves were not. Other believers then and since were not nearly as circumspect about their errands in the wilderness, acting with confidence that they could secure their futures in the next world through good works in this one. In all these cases, however, this was the dream of the good life as a spiritual affair.             The idea of the American dream has been attached to everything from religious freedom to a home in the suburbs, and it has inspired emotions ranging from deep satisfaction to disillusioned fury. Nevertheless, the phrase elicits for most Americans some variant fantasy of a new world where anything can happen and good things might.             Millions of immigrants and internal migrants have moved to America, and around within it, to fulfill their version of the American dream. By objective measures and their own accounts, many have achieved success. Probably just as many have been defeated and disillusioned. Millions of other immigrants were moved to America despite their preferences and have been forced to come to terms with a dream that was not originally theirs. How they have done so, and how their experiences compare with those who came to America to seek their dream.             But one cannot address that subject, nor eventually move beyond it to evaluate the future of the American dream and its society, without knowing what the dream is and how it operates.             The pursuit of success warrants so much fervor because it is associated with virtue. “Associated with” means at least four things: virtue leads to success, success makes a person virtuous, success indicates virtue, or apparent success is not real success unless one is also virtuous.             That quintessential American, , conversely, Proverbial sentences, chiefly such as inculcated industry and frugality as “the Means of procuring wealth and thereby securing virtue, it being more difficult for a man in want to act always honestly, as it is hard for an empty sack to stand upright.” Finally, mere wealth may actually impede true success, the attainment of which requires a long list of virtues. Americans have learned Franklin’s lessons well: they distinguish between the worthy and unworthy rich, as well as the deserving and undeserving poor. For example, most Americans characterize “yuppies” as people who “play fashionable games” and “eat in trendy restaurants,” and on the whole they enjoy watching such forms of conspicuous consumption. But they also characterize yuppies as selfish, greedy, inclined to flaunt their wealth, and imbued with a false sense of superiority.             There is no doubt where Thoreau stands in the confrontation between spiritual and material values. He tells us that “wealth itself is a curse because, it enslaves us” Trade and money are unequivocally deprecated as measures of worth. Thoreau contrasts the miserly legal owner of the land with persons like himself, whose love and enjoyment of it are not profit oriented. He plays off multiple meanings dazzlingly, noting that any un-saleable aspect of the landscape is worthless to the farmer: “there was nothing to redeem it, forsooth, in his eyes.” In the word “redeem” we hear both economic and religious reverberations. Combining the values of a pawnbroker with those of a preacher, the farmer reveals that for him monetary and religious “redemption” are one and the same. Speaking of this same farmer,  it was no privilege to him to behold, i.e., he does not exercise the real and inherent “privilege,” or advantage, of living on the land, but merely holds his legal “privilege,” or title. On this man’s farm nothing grows free, nothing grows unconstrained and unregulated because nothing is without its price.             Certainly, it is no secret that concerns spending. To discover how to earn and spend our wakeful hours whatever we are doing is the task of as a whole. does not permit these terms to rest drowsily in a context of financial loss and gain. Rather, he wakes them, makes them metaphors for forgotten spiritual and organic values. He subverts both the business ethic and the dull round of language itself. Each economic word contains within it an alarm of meaning that prevents us from falling into a sleepy discourse with the surface of the text. Credit:ivythesis.typepad.com

MONEY

MONEY Money plays a central role in determining the course of our everyday life. Prices and inflation are directly linked t...