Why the three are powerful
Ben Bernanke heads the U.S. Federal Reserve; Jean-Claude Trichet heads the European Central Bank (ECB); Masaaki Shirakawa heads the Bank of Japan and are regarded as more powerful than leaders of most countries because they are the heads of central banks of the most powerful economies (Samuelson, 2008). These are apex institutions which are regarded as the leaders of money market. Their functions of controlling and supervising as well as regulating the commercial banks’ and other financial institutions’ activities have far reaching effects in the global economy. They are charged with the responsibility of regulating the currency and credit volume in their jurisdictions. Being that these are the most powerful economic blocs, the policies implemented by them will determine the progress of the world economy and hence control the economies of other individual countries in the world (Suri, Budhiraja & Rajput, 2005)
Reasons for low-interest rate
The main motive of opting for low-interest policy during recession is the need to stimulate investment. This is based on the inverse relationship between low-interest rates and investment demand, whereby when interest rates are reduced some projects which otherwise would have been unprofitable become profitable. Therefore investors will be willing to obtain loans and invest and as a result more job opportunities are created. In addition the goods produced will be at affordable prices. With many people employed there will be ready demand for goods produced because people have income to spend. In the end unemployment rates will go down, prices will also go down and as a result inflation is reduced (International Monetary Fund. Research Dept, 1983)
Recommendations for improvement of the US monetary policy
The US government should seek monetary policies that seek to improve the US economy’s international competitiveness. However monetary policies alone cannot be effective in achieving this, therefore fiscal policies such as structures and incentive in the business environment will supplement the monetary policies. The behavior of firms can be used as an important link between macro and micro policy recommendations to enhance international competitiveness. Here the mix of macroeconomic policies will affect prices and profits of businesses through its effect on economic activity level, the exchange and interest rates as well as inflation. Trade and domestic industrial policies on the other hand will affect market structure as well as market access. This will influence firms’ prices and profits which will in turn affect their opportunity of competing in international markets (Howes, 2000)
Through this model the firms are the center of focus of micro and macro economic policies to influence international competitiveness. The mix of monetary and fiscal policies will affect cost of firms and their competitiveness through exchange and interest rates as well as inflation. These policies will be used to influence the ease of market entry as well as exit, to determine the level of foreign competition domestically and the extent to which domestic firms can access markets abroad. These will affect firms’ costs, which will in turn affect prices, profits, investment and employment. As a result income levels and spending will be affected and these will in turn affect inflation levels and economic development (Howes, 2000)
Conclusion
Economic policies implemented by one country directly and indirectly affect the economies of other countries. However some economic world powers like the US, Japan and the European Union have more influence. On the other hand countries cannot only depend on monetary policies to put up measures that effectively put a check on inflation. In addition cooperation of countries is principal factor in the success of various economic policies in the world economy.
Our Service Charter
-
Excellent Quality / 100% Plagiarism-Free
We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers. -
Free Revisions
We keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed. -
Confidentiality / 100% No Disclosure
We make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service. -
Money Back Guarantee
If the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit. -
24/7 Customer Support
We have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.