Essays on Federal Reserve Bank

The two thousand and eight financial crises resulted in significant economic turndowns. Before it began in two thousand and seven, prices of housing rose, new investment options emerged, and risk diversification increased. Following the crisis, house prices fell by huge percentages. It exposed economic weaknesses of the United States. Additionally, it led to an increase in the unemployment rate by ten percent (Mishkin, 2011). Approximately, nineteen trillion dollars of household wealth were lost. Lehman Brothers collapsed in two thousand and eight affecting the global financial system. Taxpayers had to bail out various banks to stabilize the system. This paper ...

The Federal government has limited options to address economic issues. These are generally described as “Fiscal policy” and “Monetary Policy.” In the most general terms, fiscal policy involves government tax and spend programs. The underlying theory is that tax cuts increase consumers spending ability by leaving consumers with more money and government spending provides a more direct stimulus by injecting money into the economy. Fiscal policy is generally identified under the popular “Keynesian Economics” label. Monetary policy, on the other hand, involves the central bank (the Federal Reserve Bank system, or “the Fed”) “adjusting” the money supply through interest ...

Prior to the Great Depression policy makers in the United States generally tended to accept that business cycles happened and in accord with Adam Smith's "invisible hand," tended to be self-correcting. The stock market crash of 1929, and the more general problem of massive unemployment forced a reconsideration. Smiley (2008) and Bernstein (2016) both point out that the human face of the Depression left no choice but for some government intervention. Jahan and Papageorgiou (2014), discussing Keynesian Economics put it plainly: “The central tenet of this school of thought is that government intervention can stabilize the economy.” The centerpiece ...

Eclectic Forecasting Research Paper

1. The year 2007 is the third year of a series of three consecutive years of broad-based growth in the world. Although developed economies and underdeveloped economies had a world average growth of 3.4 % in 2007 with a previous growth of 4.9 in 2006, the perspective for that year was to an increase in the world growth in 2008 with a value of 3.6% (QUOTE). In the year 2006, 96 of 159 economies of the world increased their gross domestic product with a value higher than 3%, and only nine countries had a negative growth in 2006. The challenge ...

Article Review

The US economy is well known for the wide range of detailed data that is available through various organizations like the Fed, the Bureau of Labor Statistics, the Bureau of Economic Affairs and many others. The world’s largest economy has a high reputation on the quality and reliability of the data that it provides. Though the data provided by the government organizations have a high degree of accuracy the data is not a real time one. This is because the organizations need updated statistics on the various macroeconomic variables. For this reason there is a time lag in ...

Conclusion about the economy

The conclusion made after the April 27th FOMC meeting is that the interest rates paid were to be left unchanged while the excess reserves balances will be charged a 0.50 percent. In addition, as a decision policy, the board voted towards authorizing and directing the Open Market Desk at New York’s Federal Reserve Bank and until further instructions are given, the transactions will be executed in the System Open Market Account. This will be in accordance with the domestic policy directive that was earlier initiated. Ensuring that interest rates are not increased will foster economic development as firms ...

Biography for Janet Yellen

Janet Yellen was born on August 14, 1946, in Brooklyn, New York. Her mother was a teacher and the father a doctor. She attended Fort Hamilton High school. She excelled in many subjects and became the editor of the institution's newspaper and graduated as a valedictorian in 1963. She then attended Brown University and obtained a bachelor’s degree in economics in 1967. She proceeded to Yale University and received a Ph.D. in 1971. She married George Akerlof, a professor at the University of California at Berkeley and an economic noble prize winner in 1978. Yellen has one adult ...

Abstract

The current paper explores the main differences of the Great Recession in 2007-2009 from other economic collapses in the history if the United States. Section I discusses the general features of a recession and describes the main responsibilities of the National Bureau of Economic Research. Section II is devoted to the comparison of the Great Recession with the recession of 1980s. The section is divided into four subsections. Subsection A presents the basic comparison of recessions in the U.S. history and explains the choice of the 1980s period for the further comparison. Subsection B explores differences in unemployment in ...

Introduction

The Tulip Mania that took place between 1636 and 1637 is one of the earliest recorded financial bubbles (Veen, 2012). While there is no universally accepted definition of a financial bubble, the term financial bubble is used to refer to a situation where an asset price exceeds the asset intrinsic value, or the value that could be earned by holding the asset to maturity for an extended period of time (The Federal Reserve Bank of Chicago, 2012). The Tulip Mania fits the description of a financial bubble because at its height, the price of some tulip bulbs exceeded the ...

The book titled “When Genius Failed: The Rise and Fall of Long-Term Capital Management”, written by one of the famous financial journalists, Roger Lowenstein gives an account of how the 1998 collapse of Long-Term Capital Management (LTCM), a hedge fund panicked the financial markets . The author explains in his book about how banks relied on various brand names that have been established LTCM through its partners and how lenders were ignorant to the assets and strategies of LTCM. He illustrates several examples that suggest the models, strategies and trades used by LTCM, thereby offering valid reasons as to how ...

The question of minimum wage introduction for low-skilled workers offers conflicting research findings. Some theorists suggest that the introduction of minimum pay for low-skilled labor may affect the whole employment. However, the general model of competitive market for labor assumes that the introduction of minimum wage will cause job loss among the low-skilled employees. This report is dedicated to the economic analysis of this model.

What Economic Theory Predicts Will Happen

The simplest approach includes the analysis of one separate labor type. In such market, the minimum wage that overshoots the competitive equilibrium in the market causes harm to employment from two standpoints. First of ...

Race is one of the factors that play a role in the determination of the credit worthiness of a person. A study conducted by the Federal Reserve Bank of Boston showed that minorities were more likely to be denied mortgages compared to the whites. Credit plays an important role in the lives of the minorities because it enables them to improve or escape their poor living conditions (Munnell, Tootell, Browne and McEneaney 25). The lack of credit would mean that the minorities will continue being poor. As a result, the Home Mortgage Disclosure Act (HMDA) was enacted so as ...

Introduction

The report presents discussion and analysis of compensation strategies of Nucor Corporation. The organizational structure significantly impacts the compensation system of an organization that affects its ability to attain strategic goals. If the compensation to executives is not aligned with the organizational culture then it may lead to adverse impact on the firm’s performance and lead to other consequences. Several studies indicate that the organizational culture has a significant impact on compensation as well as the firm’s performance. The firms offer different types of compensation to their executives that may affect the compensation structure. However, they are ...

Introduction

The United States established the Federal Reserve institution in 1913. This central bank was responsible for safeguarding the economy of the United States by raising and lowering the interest rates that the borrowers have to pay to the lenders (Grey, 2002). This paper will determine how exactly the Federal Reserve is controlling the interest rates. It also examines why the interest rates influence the broader economy of the U.S. However, before the establishment of the Federal Reserve Bank, there was economic panic, and this was caused by emergency banking that was the common events as the prospective investors would ...

Introduction

Monetary policy is the endeavor by the federal or state government to control the amount of money circulating within an economy. These control measures are undertaken to cub the instances of inflations or to control the interest rates to sustainable levels. Monetary policies can either be expansionary or contractionary. Expansionary monetary policies are meant to expand the supply of money to the economy thereby boosting the economic activities (Afonso, 2012). Expansionary monetary policies also lead to a reduction in average interest rates. Contractionary monetary policies, on the other hand, are macro-economic tools used by the federal or the state ...