Monetary Policy The Forward Guidance Rationale - 1556 Words

The Forward Guidance Rationale Forward Guidance is an unconventional monetary policy used by the central bank to provide path for future interest rates to individuals and businesses. Recently, the Bank of England has adopted this policy. In this essay, we will explain the rationale behind the use of this policy with the help of IS-LM model along with AD-AS model. The IS-LM model explains the relationship between interest and income level and changes in equilibrium level through the use of monetary and fiscal policy. Therefore, will be adequate in explaining the logic for applying this policy. Whereas, the AD-AS model may help in analysing the inflation condition of this policy. After the Global Financial crises of 2008, UK economy was severely affected and had dipped into recession. Thus, this led to a fall in market confidence, lower GDP growth and higher levels of unemployment. In order to boost the economy, expansionary monetary policies were adopted by the Bank of England. Interest Rates were cut to historic low of 0.5%. However, the economy was still not out of recession and conventional monetary policies failed to work even when interest rates were near zero bound. So, the central bank used unconventional monetary tools such as Quantitative Easing i.e. buying government bonds and injecting money into the economy. This policy was accompanied by a rather new policy known as the Forward Guidance in August, 2013. Furthermore in the UK, ForwardShow MoreRelatedCfa Study Guide15531 Words   |  63 PagesConduct as well as the Global Investment Performance Standards (GIPS ®). The principles and guidance presented in the CFA Institute Standards of Practice Handbook (SOPH) form the basis for the CFA Institute self-regulatory program to maintain the highest professional standards among investment practitioners. â€Å"Guidance† in the SOPH addresses the practical application of the Code and Standards. The guidance reviews the purpose and scope of each standard, presents recommended procedures for complianceRead MoreThe Stock Market Theory Of Merger3112 Words   |  13 Pagesstock market theory of merger and set out its predictions about the effect of merger on post-merger profitability. What does the empirical evidence on mergers show about the gains from merger? In light of your analysis what policy recommendations would you make for policies to control mergers and take overs. In the vast and voracious business world, attention from media as well as corporations themselves have been predominantly focused on the phenomena that is mergers and acquisitions, undoubtedlyRead MoreSingle vs Multiple Financial Regulators12736 Words   |  51 Pagesof a country by itself. Some of the countries which follow single regulatory system are: ï‚ · ï‚ · ï‚ · ï‚ · Financial Services Agency (FSA), Japan Federal Financial Supervisory Authority (BaFin), Germany Autorità © des marchà ©s financiers (France) (AMF), France Monetary Authority of Singapore (MAS), Singapore Multiple regulators: are entities created by the governments of a nation to regulate a part of the financial system each and co-exist for the proper functioning of the financial system. Some of the countriesRead MoreEurope Economic Crisis55278 Words   |  222 Pagescomplemented by strategic investments and measures to shore up business and labour markets. The overall fiscal stimulus, including the effects of automatic stabilisers, amounts to 5% of GDP in the EU. According to the Commission s analysis, unless policies take up the new challenges, potential GDP in the EU could fall to a permanently lower trajectory, due to several factors. First, protracted spells of unemployment in the workforce tend to lead to a permanent loss of skills. Second, the stock of equipmentRead MoreManagement And Coordination Of The Hr Function3437 Words   |  14 Pagesstaff. On the contrary, Amazon strives to promote leadership in every aspect of the business and at every level of seniority. Staff shou ld be reminded that they can demonstrate leadership qualities in their everyday work, for example in bringing forward new project ideas or in finding an innovative solution to a customer’s problem. Leadership is developed through coaching, both formally and informally, as well as by knowledge sharing at peer level. It is therefore imperative to create a â€Å"leadershipRead MoreFinancial Strategy8256 Words   |  34 Pagesdesign, which would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 less deaths. The company defended itself on the grounds that it used the accepted risk/benefit analysis to determine if the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justifiedRead MoreImpact of Operational Risk in Banking5445 Words   |  22 PagesEncyclopedia (2007) â€Å"the  foremost  monetary institution in a free market economy is the central bank. These are usually government-owned institutions, but even in countries where they are owned by the nation’s banks (such as Switzerland and the United States), the responsibility of the central bank is to the national interest. Most  central  banks  perform the following functions; they serve as the government’s banker, act as the banker of the banking system, regulate the monetary system for both domestic andRead MoreBudget Essay12259 Words   |  50 Pagesto a list of all planned expenses and revenues. A budget is an important concept in microeconomics, which uses a budget line to illustrate the trade-offs between two or more goods. In other terms, a budget is an organizational plan stated in monetary terms. The budget of a government is a summary or plan of the intended revenues and expenditures of that government. Budget Preparation A full understanding of the budget planning and preparation system is essential, not just to derive expenditureRead MoreThe Importance of Maqasid Al-Shariah in Islamic Finance. a Short Essay by Nadifa Abdulhalim Mohamed8658 Words   |  35 Pagesobjectives of the  Sharà ®Ã¢â‚¬â„¢ah  was generally not encouraged. This rather unspoken attitude contrasted with the fact that the Qur’à ¢n itself exhibits considerable awareness of the underlying purposes and objectives of its laws and often expounds the causes and rationale on which they are founded. The general reticence of the  Ã¢â‚¬Ëœulamà ¢Ã¢â‚¬â„¢Ã‚  in respect of the identification of the  maqà ¢sid  might have partly been due to the elements of projection and prognostication that such an exercise was likely to involve. Who can tellRead MoreThe Political and Legal Environments Facing Business4014 Words   |  17 Pagesâ€Å"Counterfeiting in China† [World News Tonight, 3:10]. I. INTRODUCTION For a multinational enterprise to succeed in countries with different political and legal environments, its management must carefully analyze the fit between its corporate policies and the political and legal conditions of each particular nation in which it operates. Then its must determine how these factors affect the ways in which the firm can capture opportunities and deflect threats. [See Fig. 3.1.] II. THE POLITICAL

Example English Analysis - 1277 Words

In the passage from the novel The Book of Saladin by Tariq Ali, the author talks about a particular moment in the life of the former Islamic leader Saladin. The piece is written in a first person narrative view and is told through the view of Saladin. The passage talks about Saladin’s youth and how he was at first considered rather insignificant, as he was not the eldest born son in his family hence not much was expected from him. The passage then goes on to talk about how only his paternal grandmother saw greatness in him and goes on to give a recollection of a moment in which he and his friends killed a snake where upon Saladin’s grandmother calls him and tells him about her dream. The passage contains several significant themes†¦show more content†¦The confident tone Saladin uses when he says this shows how he is in control over the situation and hence implying the fact that he is rather powerful. The word choice of the author is also significant in the sense that â€Å"normal† implies that this is not the first time Saladin has seen such fear in his subjects and suggests his intimidating figure. This if further emphasized by the caesura in between normal and it. The full stop puts emphasis on the first part of the second sentence hence again further emphasizing the fact that Saladin’s presence in the scene gives out a sign of awe over his subjects. This fear of him can also be interpreted as others respecting him. The theme of power is largely significant in this passage mainly due to the fact that it sets the tone at which the passage is to be read in. The use of this theme is mainly to introduce the protagonist to the reader and to establish the fact that he is a powerful and well respected leader. Lastly, the theme of conflict is also largely evident in this passage. The images of Saladin and his friends attempting to kill a snake is a foreshadowing of his brutal life. â€Å"Compete with each other in these foolish things. We would try and grab a snake by its tail and then swing it, before crushing its head on a stone or, as the braver ones among us did, stamping on its head with our feet†. The verb choices of this quotation are largely significant in emphasizing to the reader theShow MoreRelatedI Stand Here Ironing Analysis - Freshmen English Essay examples666 Words   |  3 PagesShort Story Essay There were three things that affected the overall mood of the short story I Stand Here Ironing. The choice of perspective, which was first person, played a major factor. The mood was also influenced by various methods of characterization used by Olsen in the story.   The last thing that affected the mood was different stereotypes that were incorporated into the story. The overall mood of the story was remorseful. The perspective greatly impacted the mood throughout the courseRead MoreAn Analysis of English-Chinese Subtitle Translating Strategies: Taking Gossip Girl as an Example4351 Words   |  18 PagesAn Analysis of English-Chinese Subtitle Translating Strategies: Taking Gossip Girl as an Example â…  . Introduction A. An overview of the study Subtitle translation studies began with the development of film industry, high technology and globalization. From a tentative start involving somewhat superficial contributions to audiovisual translation in the late 1950s and the early 1960s, followed by a couple of decades of relative lethargy in the 1970s and 1980s, people have entered a period of vigorousRead MoreContrastive Analysis1671 Words   |  7 PagesAdvanced writing April 24, 2009 Contrastive analysis: Prosperity, Decline and new Hopes of revival It should be mentioned that the history of foreign language teaching is so complicated. 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Recently, the requirements for ESL learners to carry out the best solutions for second language learners are in great demand because those learners have the experience of listening to second language teaching. Hence this top ic is really of significance for me,as a future teacher, to write about. Abstract: This essay will use the knowledge of segmental and suprasegmental phonology to examineRead MoreA Study On The Hull Regional Dialect As A Variety Of English With Standard English1182 Words   |  5 Pageslanguage (phonology), syntax and morphology. A combination of these features, make up a regional dialect by a people can be recognized. Consider an analysis of 2 example of text that highlight the Hull regional dialect as a variety of English with Standard English in its written form. Individuals are may choose to adopt a particular non-standard variety of English and indeed its accent through convergence, divergence or maintenance for a number of reasons. 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Critically Evaluate the Three Theories of Personality Free Essays

Critically evaluate the three theories of personality using examples from PE and Sport. The three theories of personality are; Trait Theory, Social Learning Theory and Interactionist Theory. All three have a different perspective of how each individual’s personality is formed. We will write a custom essay sample on Critically Evaluate the Three Theories of Personality or any similar topic only for you Order Now Trait theory suggests that personality is made up of certain stable and enduring characteristics which stay with a person from birth and do not change. They are inherited and passed down through genes from the individuals parents. Therefore the equation for this theory is, Behaviour = function of Personality or B = F (P). One strength of trait theory is that it can be easily measured through questionnaires, quizzes, interviews etc. The most well known questionnaire for trait theory is one designed by Eysenk. The questionnaire allowed Eysenk to calculate a number for the individual which he would then plot onto a graph and be able to label them into two dimensions; extrovert/introvert and neurotic/stable. However, this theory does not take into account the influence of the environment on personality. This theory can be put into context when looking at extroverts and introverts in sports. Extroverts tend to play in team sports, where they can be sociable, lively and are able to take some leadership. However, introverts generally prefer to take part in individual sports as they are more unsociable, shy and nervous. Social Learning Theory implies that personality is simply formed through life experiences and environmental influences. Therefore the equation for this is Behaviour = Function of personality (environment) or B=F(E). The fact that this theory, unlike Trait theory, takes into consideration the effect of the environment gives it an entirely different perspective. Despite this, the theory doesn’t give any thought to inherent traits and therefore is relatively simplistic as personality seems to all be down to the environment and a person’s experiences. To put this theory into context, an example may be that a person who surfs might surf purely because they grew up by the coast. This shows the environment has had an effect on their choice of sport to take part in. The Interactionist Theory is the final theory of the three. It suggests that personality is formed through a combination of traits from birth e. g. funny and then these traits are developed and enhanced through life experiences. The equation therefore being B = F (PE). This theory is somewhat just a mix of both Trait theory and Social Learning theory to produce a new theory which contains aspects of both of these. It is this that makes it the most widely accepted theory used to explain behaviour in sport. Interactionist theory can be seen in sport when someone acts out of character to what they usually would. For example David Beckham, who is known for his gentle and shy nature, lashed out in a game against Argentina and received a red card for his actions. David Beckham does not typically react like this, and so we can see that his traits were heavily influenced upon by the environment which in this case was an opposing player. To conclude, all three theories are based on different perceptions and all come with their own strengths and weaknesses. The fact that they are theories reminds us that there isn’t one that is deemed to be correct, and that it is down to opinion to which one you choose to believe. How to cite Critically Evaluate the Three Theories of Personality, Papers

Money can buy you happiness free essay sample

According to this theory,the individual propensity to happiness is a personal trait of largely genetic origin and influenced by personality. The explanation for the stagnation of happiness is that happiness is a stochastic phenomenon. Chance distributes unequal amounts of happiness among people’s genetic codes ,leaving the average level unchanged. The decreasing marginal utility of money. This idea- that of a progressive saturation of needs,or at least of those needs that can be satisified by marketable goods-is general and is consistent with a variety of approaches,including mainstrain growth theory. It may wvoke an image of societies that are affluent and stated with regard to material needs,but in which individuals can not buy what they truly need. This idea is compatible with a broad variety of critiques of materialism and consumerism and also with a large body of studies. Mainly psychological,which emphasize the primarly importance of the quality of the relational world in which individuals live in determining their happiness. We will write a custom essay sample on Money can buy you happiness or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page and it is further more consistent with several other explanation furnished by pshcologists and sociologists. Adaptation An increase in income has only temporary effects on people’s happiness because they progressively adapt to the new circumstances. This theory is often presented as the flip side of coin of one of the keys of human evooluntionary success,the elevated capacity to adapt. That which saves up from sinking into despair in the face of adversity also prevents us from elevating ourselves to a more stable,higher plane of experience under favorable circumstances. Adapation theory is some times presented in conjunction with set point theory:the effects of external circumstances on happiness are temporary and its long-term level is determined by biology and personality. However,these two the ories are compatible but nevertheless distinct. It is in fact possible that the effects of an increase in income on happiness are temporary,but that the long-run level of happiness is determined by factors other than genes and personality. The importance of relative position. There is a proliferation of terms in economic theory that refer to the same idea:namely that relative position matters in individual preferences,if it is a person’s relative position that counts,then a general increase in income cannot increase the happiness of everyone because his or her relative position remains unchanged. Indeed the lack of correlation between income and happiness is explained in both cases by the fact that aspirations increase with income. The first three explanations are different versions of the ideas that money cannot buy happiness. This idea is common to all three theories,although it is based on completely different considerations in each of them. In the set point theory,the contention is that no external factor is able to exert a permanent influence on happiness because the latter is a invariant trait. In the second case. Growth cannot increase happiness beond a certain level because needs become saturated =or at least those needs whose satisifations can not be bought. In the third case,it is the constant adaptation of aspirations to the growth of income that renders money unable to purchase anything but temporary happiness. Any money-cant-buy-happiness theory,therefore is consistent with the lack of correlation between income and happiness,but it has a problem:such consistency is obtained at the price of counterfactual predictions regarding the trend in work and saving. In fact,these theories tend to predict that people’s interested in money will diminish through time because of the disappoint,they will tend revise their choices and reduce their efforts to acquire money. In other words,if people realize that their happiness depends on,say. personal traits,or that money cannot satisfy needs that are essential,they will react by reducing their efforts aimed at making money . In short,if money cannot buy happiness ,the labor supply and the saving rate will be highly responsive to variation in labour producetively and wealth. As we have seen,this prediction is counterfactual. Of course,money –cant-buy-happiness theories may provide a different prediction if they included as theory of failure of rationality,which shows that individuals systematically overestimate the impact of consumption on their happiness. But,as we shall discuss below,these theories generally do not include such a theory. Thus,these explanations of trend of happiness are obtained at the price of counterfactual predictions,as far as people’s interest in money is concerned .