Fiscal policy

the economy remains stable and people’s confidence in the dollar strengthens. President-elect Trump has proposed an expansionary fiscal policy where he aims to increase government spending on infrastructure and the military to stimulate the economy and increase employment, all while cutting taxes. As a result, the Fed may choose to pursue a contractionary monetary policy and increase interest rates in order to decline investment and GDP and fight inflation (Reuters).…

Modifications of Monetary Policy: The ROPBC implies that the incumbent keeps an ambiguous level of control over monetary policy, so that when required (under political opportunism) the policy maker can generate positive shocks in the economy at times that they are more concerned than they typically are about economic stimulation (prior to the election). The implications of this are that, under “tight control”- (Cuikerman and Meltzer, (1986), p. ), the policymaker controls monetary policy very…

REVIEW OF LITERATURE Economic literature is well documented with causes and effects of capital flight and external debt. According to Walter (1986) and Kindleberger (1987), capital flight is a capital that flees. When these resources are being lost in form of capital flight, there are various long term effects. Owing to out flow of capital there exists a shortage of liquidity in the economy which leads to the exertion of upward pressure on the interest rates. Similarly, the shortage of…

moderate long-term interest rates.” This is often called dual mandate and guides the Feds decision making in conducting monetary policy strategies. The Fed has a full employment goal for the US, 0% unemployment is not feasible, and it strives to obtain a 5% or lower unemployment…

The borrowed money was to pay for all of the expenses and funding the quasi-fiscal activities (Muponda, 2009, p. 1). The problem led to many things becoming luxurious for the residents to purchase. Examples are things like meat, margarine, bread and cup of tea in the morning. Apart from making some things luxuries, the residents…

These policies are usually put in place to ensure that a countries economy does not find itself in a recession as well as under inflation. The government through its agencies uses the policies to ensure that economic stability is attained. The Federal Reserve’s are responsible for controlling the flow of money, and this is essential in ensuring that…

economy will break free from the boom and bust cycle, rising interest rates and weakening of dollar. Ron Paul suggested that the solution to an imminent economic disaster is to end the fed, go back to gold standard, be transparent on costs of war and fiscal spending, base credit on savings and lastly, operate on a free market…

Neutrality of Money: A Criticism Neutrality of money is a widespread if rather flawed assumption which underpins much of mainstream macroeconomics. Political economists disagree with this assumption due to the endogenous nature of monetary supply, encompassing reverse causation and exogenous interest rates. It would be inappropriate to discuss neutrality of money or the rejection thereof without first discussing money itself. At its most basic, money is something deemed by an economy to…

Indonesia has experienced a lot of progress for both domestic affairs and foreign affairs. It has been since a long time ago, Indonesia was able to socialize with the other countries. Since the early days of independence, Indonesia has made a foreign policy that is independent and active. It means that Indonesia should take an active role in creating lasting peace and social justice. This will be achieved through cooperation and mutually beneficial international relations. Bilateral,…

In the article, Globalization in Retreat by Roger Altman, globalization, which refers to a liberal flow of goods, services, workforce, capital, ideas and information spread across national borders, and its relevance in today’s society is discussed. Furthermore, the decline of global trade, capital flows and immigration are examined in relation to the housing and credit market collapse which affected the United States, Europe and Japan. In addition, the worldwide recession on developing…