Financial Troubles And Quantitative Easing

Financial Troubles and Quantitative Easing
In times of financial troubles, individuals as well as groups are known to do some fairly off the wall things in order to ensure that they remain
financially solvent. When looking at larger scale financial problems, such as those experienced during recent recessionary trends, it is not just
individuals and organizations that do unexpected things, but governments as well. One such action that was taken both by the United States
government and others abroad during the financial crisis of the new millennium was that of quantitative easing. As a theory, quantitative easing has had
both heavy praise and scorn from different scholarly backers and while there are questions as to its overall effectiveness, the recent use shows that
there is some truth to its principles. By analyzing the theory of quantitative easing as well as its positive and negative effects, both theoretical and
realized in the real–world, it is possible to understand why governments recently used this technique. The first aspect of quantitative easing to analyze
is its basic definition and the way that governments look at the topic. In market theory, there are a few ways to spur on the economy in terms of
increasing money flow, limiting deflation of currency, and to give new life to otherwise failing economic conditions. More often than not, governments
will infuse the economy through a standard monetary policy that includes buying government bonds for short–term returns to stimulate the economy
with
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Economic Issues of QE2: Quantitative Easing
Introduction QE abbreviated as Quantitative Easing is the process that central banks use to stimulate the economy when all the traditional approaches
prove to be ineffective. This is generally done by buying specific financial assets from other commercial banks and financial institutions ultimately
leading to increase in the monetary base and reducing the yield of those assets. This is generally used to ensure that the inflation does not go below a
specific rate. Some of the risks involved are resistance to deflation to a longer time or making bank to resist lending out their additional reserves
(Arvind K, Annette V, 2011).
QE2
QE2 is the 2nd time the US Federal Reserve used Quantitative Easing to stipulate the economy. It was initialized in the fourth quarter of 2010 so that
it can help to recover the recession that took place in the year 2008. The Federal Reserve brought 600 billion dollars treasuries in long term. This was
expected to bring down the yields of treasuries and bonds thereby introducing an inflationary pressure on the economy (Joseph G, Matthew R, Julie R,
Brain S, 2010).
Effect of QE2 on Employment Two reasons that explained why QE2 will not have a great effect on Employment are as follows
i.Some unemployment in the country is due to the fact that companies do not want people who do not have the skills that they expect. So this
mismatch between skills sets of the unemployed people and the employer can never be met unless people can be trained in that

Monetary Policy And Analysis Of Nash Equilibria
Recently, the president of European Central Bank (ECB), Mr Mario Draghi, announced that he is thinking of applying Quantitative Easing (QE) within
the Eurozone. Assume that you are a member of the ECB board of governors.
Introduction:
This essay deals with the economic and financial aspects, why Mr Mario Draghi is willing to make use of Quantitative Easing, as well as pointing out
the potential advantages and disadvantages of this monetary policy and analysis of Nash Equilibria.
A1) In your view, what could be the reasons behind this decision?
Recently, the president of European Central Bank (ECB), Mr Mario Draghi, announced that he is thinking of applying Quantitative Easing (QE) within
the Eurozone. Quantitative Easing is a monetary ... Show more content on Helpwriting.net ...
The main objective of Mario Draghi is to inject money directly into the euro–zone economy; hopefully this will boost the economies in the Eurozone if
the target of 2% inflation is met. Essentially, if the inflation rate is above 2%, then the Bank will have to reduce the pace of spending and decrease the
inflation in order to maintain the 2% criteria. In comparison, if the inflation is below the minimum percentage, it decreases the bank rate to the extent
of boost of inflation and spending.
Conversely, on behalf of a member of the ECB board of governors, applying quantitative easing within the Eurozone is seen as a very unbalanced
approach, unbalanced approach in terms of effecting financial activities and may be beneficial for some countries in the Eurozone. Nevertheless, the
Germans may see Quantitative Easing as an ineffective monetary policy regarding that, if the European Central Bank (ECB) purchase governments
or corporate bonds from high debt countries then the "German taxpayers will face a risk of having to foot the bill. This occurs if one or more of
these countries default on their debt. Also, it will create a loss on the balance sheet of the ECB. The other member countries in the euro zone,
especially Germany, will then have to step in to cover the loss" (De Grauwe, 2015). Mario Draghi believes that the programme of bond buying is an
important financial approach to circumvent the Eurozone from a deflationary situation. Whereas, the Germans fear

Essay on Monetary Policy
Introduction
Monetary policy is among the many tools used by a national government to manipulate its financial system. Monetary policy refers to the method used
by the financial authority of any country to control the supply and availability of money (Woelfel, 1994). It is often targeted at interest rates to achieve
lay down objectives directed towards economic growth and stability (Woelfel, 1994). Monetary policy rests on the link between interest rates in an
economy, that is, the relationship between interest rates and the total money supply. It employs a variety of methods to control outcomes like inflation,
economic growth, currency exchange rates and unemployment.
Monetary policy can either be expansionary policy in which case ... Show more content on Helpwriting.net ...
One of these approaches is quantitative easing (QE). Quantitative easing is a technique used by central banks to boost money supply in an economy
when interest rates are close to or at zero thus cannot be reduced further (Woelfel, 1994). To increase the supply of money under such conditions, the
central bank may be forced to buy government assets/securities like government bonds, mortgage–backed securities or government debt from banks
thus increase their surplus revenue hence raise or stabilize prices of such securities and consequently reduce interest rates in the long term.
With this insight in mind, the remaining part of this essay seeks to critically examine the methods of implementing monetary policy when interest rates
are close to or at zero.
Monetary Policy Options at the Zero Bound
Interest rates have the lowest bound at zero mark. When this limit is reached, serious problems occur in designing appropriate monetary policy
approaches since interest rates can never be set below this mark. Countries like Japan, United States and Switzerland have faced this challenge in the
recent past thus calling for alternative approaches to monetary policy when the nominal interestrate is close or at zero.
Conventional monetary policy methods are always channeled towards lowering interest rates to stabilize inflation and other outputs. This is however
impossible in situations whereby the interest rates are already close to or zero calling for

Quantitative Easing Explored Essay
The recent recession lasting from 2007 until 2009, and the effects of which are still highly visible in the U.S. economy, led the Federal Reserve to use
new and largely untested methods for protecting the country from a total financial collapse. The new strategy, which blurs the lines between monetary
and fiscal policy, had been attempted only once before, and is open to criticism from several difference angles. This report documents the history,
purpose, and controversy surrounding quantitative easing as a strategy to mitigate the effects of the recent recession. After considering these factors,
the conclusion is drawn that quantitative easing was a modestly successful policy, yet one which should not be employed again. Although... Show more
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This has the effect of bringing down interest rates, injecting money into the economy, and thus encouraging borrowing and spending. However, when
interest rates are at or near zero and the economy still requires stimulus (a dangerous situation now referred to as a "liquidity trap") (Blinder 466),
central banks must use more extreme methods to resuscitate the economy. As interest rates bottomed out quickly after the onset of the recession, the
Federal Reserve could no longer stimulate the economy with traditional and time–tested techniques. The controversial and unconventional method
chosen by the Federal Reserve, and other central banks around the world, is known as "quantitative easing" (QE). QE functions by injecting large
amounts of reserve capital into commercial banks with the hope that those banks will then be willing to lend the money at affordable interest rates.
Ideally, the addition to economic activity affected by the influx of capital to banks should keep the value of the dollar relatively low, avoiding deflation
and encouraging foreign investment by those wishing to take advantage of an affordable dollar. The cheaper dollar should also make American exports
look more attractive to potential consumers in other countries. If interest rates stay low, and banks begin lending again, consumer and investor
confidence should hopefully rise, leading to more spending and thus, economic growth. Before

Quantitative Easing Is Defined As The Expansion Of Central...
Quantitative Easing is defined as the expansion of Central Bank Balance sheet (Bernanke and Reinhart 2004) in order to stimulate the economy via the
purchase assets financed by the creation of central bank reserves, such as government bonds, T–bills and mortgage and exchanging for reserves, since
the bank rate has been reduced below the effective level, for instance, Bank of England has cut its bank rate in a sequence of steps from 5% in
October 2008 to 0.5% in March 2009 and further to 0.25% recently. TheCentral Bank usually proceed the asset purchase via increasing the reserves of
commercial banks held in the account of Central bank, leading to an increase in deposit in the balance sheet of commercial banks. However, on the
liabilities side, nothing has changes and in order to match up, the commercial banks will purchase more long–term assets both because the current asset
side has mainly composited of short–term assets and because the large purchase has increased the price of government bonds (Bank of England
prefers to implement QE via large purchase in government bonds), leading to relative lower price for other assets; as a result, commercial banks will
buy other long–term assets, lowering the yields of those assets. As long as, thus, money is not a perfect substitute for assets sold, banks or sellers, more
general, may tend to purchase other asset that are better substitutes in order to balance their portfolios, known as the portfolio substitute channel. In
addition,

Quantitative Easing
Adoption of Two Round Quantitative Easing by Federal Government
Following the economic slump of 1923, there was a voluminous printing and distribution of money to it, the concept of quantitative easing at play. The
term quantitative easing refers to an unconventional monetary policy instituted by some central bank so as to stimulate the economy. This is usually
stimulated by the failure or ineffectiveness of conventional monetary policies. It involves the buying of government bonds by the central bank as well
as other financial assets using new money that the bank has not like in 1023 through printing but electronically created. The idea behind the move is
to increase the money supply as well as the excess reserves at the same time of the ... Show more content on Helpwriting.net ...
This was supposed to have matured, be reabsorbed thus returning the initial investment while at the same time shrivel the federal government's swollen
financial statement. However, quantitative scaling has a possibility of two failures; being too successful leading to inflation (Flanders, 2009), or fail to
get the desired income thus retain the low inflation levels. As would not have been anticipated, the round one of the quantitative easing became victim
of the latter.
The US government thus decided to have a second bailout in the form of quantitative easement 2, or what in 2010 came to be infamously being termed
as QE2. Its launch was met with mixed reactions. This new round, the QE2 was meant to cater for low medium and long–term interest rates. Some
critics saw it as an impeding failure, while others saw it as a cause to more economic downfall due to high inflation whereas others criticized it on both
grounds.
This move was meant to stimulate economic growth. Its intention was that it would increase the employment levels to its maximum thus putting a
check on the underlying inflation. This would thus lead to resource utilization enhancing price stability in the commodity market. This is because the
QE2 will not be a substitute to the traditional monetary policy but rather will be an alternative fiscal stimulus. It will enhance an environment where the
consumers' confidence is boosted increasing spending thereby increasing the

Essay about Quantitative Easing
Quantitative easing refers to the practice of pumping money into the economy of a nation so that the banks are encouraged to lend. The government
injects money into the economy with the hope that people and companies will be able to sped more. There is a greater chance for an economy to
spring back to life when there is increased spending. In quantitative easing the government buys its own bonds such as gilts, or bond issued by
companies and other assets. This means that the commercial banks will be getting more money in their accounts with the central bank, which in return
gives them confidence to increase lending to customers and to each other. The extra lending boosts cash and credit flowing in an economy. The US
Federal reserve is ... Show more content on Helpwriting.net ...
Therefore, the quantitative easing adopted from 2009 was trying to gradually resume sustainable economic growth. Quantitative easing has helped to
avert what could have been a second great depression (Wall Street, 2011). The US economy has been clawing its way out of the recession in 2009 and
recovery has been slow compared to previous economic cycles. Regular review of the pace of securities purchase by the Federal reserve and the overall
size of asset–purchase program in light of incoming information and adjusting the program as need be will help foster maximum employment and price
stability.
The Federal Reserve expressed concern at the sluggish recovery from the worst down–turns since the great depression. It said it would buy long term
treasury bills every month till mid 2011. It also pledged to keep interest rates at low levels for an extended period which is seen as commitment to
leave borrowing costs unchanged for at least two years according to Wall Street.
According to Elliot and Inman (2010) the American government announced that it would pump in additional money to help the ailing US economy for
at least eight months. This is in an effort to accelerate growth and cut unemployment. In a speech by Bernanke on 3rd February 2011 to the National
Press Club, the quantitative easing has been a great success. There has been massive increase of speculation in stock markets. Increases

Quantitative Easing Essay
A critical review of quantitative easing and its impact on the UK economy
Research proposal –
"A critical review of Quantitative easing and its impact on the UK's economy"
Research background (Theory, concepts, Key issues, problems and researchable questions) –
Theory– During the recession flow of the money in the market is very less, hence central bank lend the money to the borrowers at low interest rates, but
there is limitation they cannot go beyond zero percentage, hence central bank do "Quantitative Easing" that is printing of money and boost the money
into market by purchasing the assets and buying the gilts or government debts.
Concepts– the main concept behind the Quantitative easing is to boost the money into the market ... Show more content on Helpwriting.net ...
It's lesson from the history about avoiding too much printing of money. Authors have used qualitative exploratory research method.
Matthew Lynn economist explains "four ways to pull an economy out of the recession" in his article published in their websites arabianbusiness.com
on 25th November, 2009. Author has research on the UK economy and found that GDP growth is negligible i.e. 0.4 pc drop noticed in Q3 results.
He found that policy of the UK government is not working as already 200 billion pounds already boosted into the market. He suggested UK
government has to change the policy in order to recover recession. UK economy is stuck in the borrowing and debts. House hold debts are highest
amongst all other countries. It has highest debts last year 14.8 B pounds noticed in September. According to the research it has been seen that
government is printing money and increasing banks reserve and landing money at lowest interest rates still there is no change in economy. Value of
pound is also lowering compares to euro and deficit of the debts are also high. According to author he suggested four ways to improve economy "It
must curb the budget deficit, support the pound, stop printing money, and cut taxes." (Matthew Lynn, 2009). Author has used quantitative data and
research method is conclusive descriptive.
Chris Giles article "To be continued QE or not to be continued QE" published in financial times on 4th November,

The Federal Reserve 's ( Fed ) Quantitative Easing
The Federal Reserve's (Fed) Quantitative Easing (QE) refers to easing the market situation by quantity. QE is a monetary policy used to stimulate
the United States' economy by injecting money into the market. The policy was done by the central bank that prints money to buy the government
bonds from financial institutions. Other than that, the Fed also set the interest rate to be between zero to a quarter percent to encourage the public
to borrow money from local banks. The economists hoped to boost the economy by increasing the investment. However, I do not agree with the
Fed's policy of Quantitative Easing. In my opinion, QE has been detrimental to the recovery of the U.S. economy. It is because QE has caused the
devaluation of U.S dollars, hyperinflation, and instability of the political system. First of all, Quantitative Easing has caused the U.S. dollars to
depreciate against other currencies. QE has injected too much money into the U.S. economy, and it caused the U.S. dollar to lose much of its value.
Once the Fed's first QE was announced in 2008, "from November 2008 to December 2009, the dollar index, a weighted average of the dollar against
other major currencies, weakened by 15 percent." [] With the weakening of the U.S. dollar, Americans were paying more money than before to buy the
same quantity of goods and services from other countries. Meanwhile, foreigners were spending less than before to buy American products. The United
States of America, a

An Eventual Explosion Caused by the Federal Reserve's...
The idea that former Federal Reserve Chairman Ben Bernanke's 'Quantitative Easing' program deserves the credit for healing the wounds inflicted on
our nation from the housing collapse of 2008 omits two possibilities: that we actually haven't recovered, and his policies have actually laid the path for
an even greater collapse ahead. The Chairman's actions hold no precedent, he himself has even admitted to flying blind. The bond and mortgage
backed security purchasing program (known as Quantitative Easing' or just 'QE') creating the artificial high by re–inflating asset bubbles was the easy
part. To truly follow out the process an exit strategy must be laid to liquidate the nearly '$4 trillion dollars' in toxic assets the Fed now holds... Show
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These ultra–low rates of interest have worked to drug up corporate profits, artificially push up stock prices and lower the cost of debt financing for
ultra–leveraged up corporations, debt riddled home owners and most of all, the 'monumentally' indebted federal government. This stimulatory drug
masquerades itself as try economic stability and growth but in reality it is nothing of the sort, a dangerous dependency has set. The Federal Reserve
is now the biggest buyer of mortgages and US debt (treasuries), my question would be; how is it that we believe suddenly stopping QE will not
result in a complete economic collapse? In a nutshell, the Fed now "is" the housing market! There is no entity currently capable of filling in the void
of the Fed's purchasing power, when that buying program seizes to be, interest rates will "have" to rise. The problem is, our ultra–leveraged up bubble
dependent economy could not handle such turbulence, if interest rates rise on bank lending interest rates on credit for American consumers will rise
significantly as well. If yield rates rise on Treasury bonds even by a few percentage points, the US government will have to pay "significantly" higher
rates of interest on the National debt. With our outstanding treasuries currently standing at over "17 Trillion dollars", even rising by a few percentage
points could result in default. How we ever got ourselves into such a mess is beyond

The Monetary Bank Policies Through A Program Called...
Given the severity of the crisis of 2007, and the ineffectiveness of the measures the Fed had at its disposal, it was forced to engage in nontraditional
monetary bank policies through a program called quantitative easing. Instead of focusing solely on cutting interest rates and by this reducing the price of
money, the Fed decided to increase the quantity of money; going to the financial markets to buy assets, and creating money while doing so. The main
focus was acquiring Treasury bonds, government debt, and assets backed by home loans. The reason to buy the first two is pretty clear, but assets
backed by home loans might not be. Those assets where considered to be "rotten": they lost most of their value after the crisis, and no one risked ...
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As supply falls, the prices of those securities rise and their yields decline. The effects extend to other longer–term securities. Mortgage rates and
corporate bond yields fall as investors who sold securities to the Fed invest that money elsewhere. Hence, QE drives down a broad range of
longer–term borrowing rates. And lower rates get households and businesses to spend more than they otherwise would, boost economic activity." The
real question is what the consequences of the program are. Supporters point out that it lowered interest rates for firms and households, strengthened the
stock market, stimulated job creation, and ultimately saved the American economy from a deeper recession. Critics say this temporary injection of
never seen amounts of money into the economy will eventually lead to a new financial crisis, massive inflation, and has punished savers due to close to
0% interest rates. The reality is the massive increase in the monetary base has it's clear and well known impacts, the ambiguity lies on quantifying if the
positives outweigh the negative outcomes, or vice versa.
The monetary base explosion has one very popular criticism; inflation will eventually soar to never seen levels. As more money is printed and
circulates the economy, prices rise.

Weaker Yen Essay
I. Introduction
Japan's exports rate last month at the fastest annual rate in more than two years. The weaker yen also boosted the energy heavy import bill, although
the rose 10 per cent from a year earlier, economists said the net effect of the yen's retreat remained positive, because higher export revenues translate
into higher exporter earnings and consequently more investment and worker's bonuses.
Japan's stock market is heavy on exporting, The Prime Minister Abe's government also hopes that the export windfall will shore up general business
and consumer confidence. This is way to aim to pull Japan out of its liquidity trap and end nearly two decades of economic stagnation and deflation.
This essay will discuss about background and ... Show more content on Helpwriting.net ...
III. Objectives and Effects of Weaker Yen
The Prime Minister Abe tried to make lower currency of Yen with two strategies. First strategy is 'Printing Money' and second strategy is 'Buying Yen
from other countries'. Both of strategies increase supply of JPY. [pic]
Weaker Yen sounds like loss of Japan. Actually, it brings a lot of benefits to Japan. There are many effects from weaker Yen.
3.1 Growth of Export Companies
Japan's fiscal policy is demand–pull for international consumers and Cost–Push for domestic consumers.
DPJ (Democratic Party of Japan) thinks that cost–push inflation will increase the cost of goods and services however, having demand–pull is more
important. It means growing demand will pull the economy into stability (J. Metcalfe, May 2013). Lower value Yen is same as income for household.
It means an international consumer is able to buy Japanese products in lower cost.
[pic]
In Figure 3.1, previous currency of Yen was Y0 and after weaker Y1, it turned as income for international consumers. Thus, aggregate demand for
Japanese products. Increased exporting will activate economy of Japan and there will be Inflationary gap between Y0 and Y1. It is enough to stimulate
to recover Japanese economy. The Minister Abe thought weaker Yen will bring increase of export and demand for domestic products and services and
it is true. The exporting rate of Japanese

How Deflation Impacted The Commodity Market And The Labor...
Introduction Since the global economic crisis happened in 2008, it had a severe impact on the worldwide economy. Many countries experienced a
great recession for a long time period, which made hundreds of thousands of people lost their jobs, large number of firms failed to pay back the
loan and many investment banks went to bankruptcy. Recently, we found that many countries hadn't yet come out from the big shock of the
financial crisis; they started facing a disastrous influence on deflation. Deflation was the reduction in the price of goods and services, which was
an indication to show that the economic conditions were bad at that moment. In this essay, I would focus on discussing how deflation impacted
the commodity market and the labor market and how to use policies to relieve the deflation. Deflation Impact on the Commodity Market Recently,
we found that "the oil price dropped a lot; one year ago, a barrel of Brent crude cost $110 and today it was merely $60, which resulted in 45%
decrease in the oil price through economies. Not only did the oil price cut, the price of goods and services also dropped in the worldwide economy.
When the price of goods and services declined, consumers would like to consume more and purchase more products, because they could pay less to
get the same thing as before. And for firms, cheaper inputs lowered the cost of manufacturing goods, which resulted in the increase in the overall
profit. What's more, we all know that energy use (oil) is

Summary Of 'Easing Suffering Through Compassion For All'
Spirituality Journal 3
In the stories of Thich Nhat Hanh "Easing Suffering through Compassion for All", it showed how religion tends to help human beings develop a
compassion and love for others. When an individual like Thay (Nhat Hanh), is able to connect with oneself, then they have a unique opportunity to
connect to one another. It is wonderful when human beings can perceive not only their own suffering but also the suffering of others. In my view,
meditation is just one of the processes that can help an individual to reach or find the condition that a person needs to be able to receive the gifts
reserved for oneself. "Thay founded the Tiep Hien Order, also known as the Order of Interbeing" (Parachin, p.65). Tiep means, "to be in touch"

The European Central Bank As A Programme Of Quantitative...
The European Central Bank recently began a programme of Quantitative Easing. Explain the meaning and purpose of this programme, and fully analyse
its likely impact.
Kate Eugenie Mary Pickering
ECN 4110 Macroeconomics
Dr Ivan Cohen
8th April 2015
Word Count: 1,100 Words
The European Central Bank (ECB) is the central bank for Europe's single currency, the euro. The ECB's main objective is to maintain the euro's
purchasing power, and therefore price stability, in the euro area, which comprises of the nineteen European Union countries that have introduced the
euro currency since 1999 (ECB, 2015d). The ECB and the national central banks of the Member States, whose currency is the euro, together constitute
the Eurosystem; the monetary authority of the euro area. In order to maintain price stability, the Eurosystem undertakes the necessary economic and
monetary analyses and adopts and implements appropriate policies in order to respond to monetary and financial developments (ECB, 2015e). This
essay will analyse the possible impacts of quantitative easing (QE), recently introduced by the European Central Bank. Firstly, I will look at the
European Central Bank's use of interest rates in controlling the growth of the economy. Secondly, I will look at the meaning and purpose of QE, and
finally, I will analyse the impact of the programme of QE recently launched by the European Central Bank.
The primary objective of the European Central Bank's monetary policy is to maintain

Personal Narrative: I Believe In Music Easing The Mind Of...
I believe in music easing the mind of stress. Many people have a coping mechanism for stress, mine is through music. Some people stop at just
listening to music, but I expand even further than that. I will play it, write it, and listen to it. I can even hear Bach and Mozart begging me for me to
rehearse them as I come home from a long day of school, work, and band. I have been through a lot the past six years, I struggle everyday with
depression and anxiety. Music is my way to cope as well as ease my mind of stress. Walking through the hallways may not seem like much, but to me
it's a constant battlefield full of people. However, by simply popping in my headphones and listening to the soothing voice of Ed Sheeran, I can escape
into my own

Research Paper On Quantitative Easing
Research Paper on Quantitative Easing
ECFI 640
Fort Hays State University
Matthew Heiman
July 24, 2016
PRESENT THE ISSUE
The economic collapse that began in 2007 and officially ended in 2009 was brought on by subprime mortgage loans. A brief description of a
subprime loan can be summed up using the definition found on Investopedia.com of "a type of loan that is offered at a rate above prime to
individuals who do not qualify for prime rate loans. Quite often, subprime borrowers are often turned away from traditional lenders because of their
low credit ratings or other factors that suggest that they have a reasonable chance of defaulting on the debt repayment (Investopedia.com)". So what
they're saying is that people with marginal or poor credit were given loans that they shouldn't have qualified for. The institutions providing credit
became greedy and were not doing due diligence to make sure the people applying for these loans were capable of repayment. The prime rate is "the
interest rate that commercial banks charge their most credit–worthy customers" (Investopedia.com).
This paper is written to illustrate Quantitative Easing from the implementation of the Federal Reserve System of the United States. There are other
central banks around the world that also employed quantitative easing during the 2007–2009 global economic decline, but I will focus on the U.S.
central bank.
These concepts are important to understand, because they set the stage for

The Role Of Exchange Rate Policy Essay
Title: The Role of Exchange Rate Policy
Economists use models that illustrates the relationships between economic variables to understand real world problems. Macroeconomics and
international economics can be messy if we do not think through a model. On the other hand, as stated by George Box, all models are wrong but some
of them are useful. As I understand, there are two important points in the question:
1)What forces determine the movements in the exchange rate?
2)What kind of exchange rate policy can help the U.S. to recover from the recession?
I first describe the forces behind the movements in the exchange rate through macroeconomic model. I, then, use these models to suggest an exchange
rate policy for the US economy that can help its transition from the Great Recession.
Section title: Exchange Rate and Open Economy
Exchange rate is the price of a nation's currency in terms of another currency. Basically, it is the price of some foreign currency in terms of a home
currency. Economist define the long–run as the period in which prices are flexible, and the short–run as the period in which prices are sticky. Therefore,
the forces behind the exchange rate movements should be examined both in the long run and short run. Following a standard text–book description, I
start with the long–run period.
Section title: Exchange rate in the long run
Purchasing Power Parity (PPP) Theorem to Determine Exchange Rates
Purchasing power parity theorem argues that since the law of one

The Pros And Cons Of Zoning Laws
Zoning laws restrict not only the uses of land and buildings, but also the dimensional requirements for lots and for buildings and the density of
development. Zoning laws vary from area to area and time to time.
There are three main zoning area, and these are residential zoning, commercial zoning, and industrial zoning. Residential zoning applies to residences
and multi family dwellings, commercial zoning generally applies to businesses, and industrial zoning normally applies to manufacturing shops and
plants.
Easing land–use regulations may allow more residences to be built on available land, so it increases housing supply and reduces the price of housing.
Hence, current homeowners are harmed while new homeowners tend to benefit.
One study calculates that zoning regulations imposed regulatory taxes of at least 10 percent in some of the cities in the United States, such as New
York, Washington, and Los Angeles. Another study, examining differences in land prices across borders where zoning regulations differ, observed that
regulations often bring about uneconomical development and land use. In contrast, cities with lower levels of zoning law generally have an affordable
housing since supply of housing is able to grow along with demand. Therefore, relaxing the zoning regulations induce to own house rather than to rent.
... Show more content on Helpwriting.net ...
The low price of housing has kept population growth and overall economic growth relatively high in the long term.
For example, a study finds that, over the past 30 years, land use regulations in high productivity cities in USA have led to higher than average growth
in prices of housing, which in turn have slowed the trend toward wage equality. Another study observed that easing the level of zoning regulation in
New York, San Jose, and San Francisco alone would increase GDP by 9.5

Advantages And Disadvantages Of Quantitative Easing
Introduction
The main issue, which has been seen in the emerging economies, is that the growing inflation and the hurdle of the debt crises. Similar situation has
also been faced by the European Economies. This is not the first time that these economies are facing this hurdle, because in the previous year also
there were some loans taken by the European Central Bank in order to help these economies. However, the payment of these loans was a hurdle for the
central bank. This issue has now become more critical due to the emerging technical issue in the European economies (Handl & Paterson, 2013).
All these have made the ECB to look into the matter of applying the QE. This paper would be covering the other core reasons sue to ... Show more
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Furthermore, with the help of the expansionary policy the proper amount required by the nations would be gained. Due to the presence of the
equilibrium the Contractionary polices would be providing no harm to the binds that are bought by the Bank of these economies (Madhavani &
Sachdeva, 2014).
Conclusion
This research provides with the idea that the situation of the European Economies is very critical and also they are at the risk of risk of debt crisis.
Therefore, the ECB has no other choice than implementing the QE on the economies. The QE is subjected to be having both potential advantages and
disadvantages to the economies on which it has been implemented. The advantages are more emphasised in this case because at the very moment the
European economies are in a great deal need of the implementation of the QE.
After this, the Nash Equilibrium is introduced. This has been done in order to understand the current situation of the economies and the appropriate
policy that should be applied to these economies. The results identified that the ministry of finance and central bank are having the chance a
combination or mixture of policies on the European economies in order to control their recent

Data Desscription for the St. Louis Federal Reserve Bank...
In the research, data was extracted from FRED which is the database of the St Louis Federal Reserve Bank and Bloomberg. Ordinary least squares
(OLS) analysis was used in order to perform the regressions needed to calculate the results. The data was taken exclusively on a domestic level
although quantitative easing was implemented abroad as well by the Bank of Japan in 1999.The data was chosen solely from the United States due to
easier access to the data and the focus of the research to analyze United States economic affairs. The dependent variables are 5–year Treasury bill,
10–year Treasury bill, 15–year fixed mortgage rate average in the United States, and 30–Year Fixed Rate Mortgage Average in the United States. The
data helps to explain how the different rounds of quantitative easing affected mortgage rates and how it will affect the long term treasury yields. Fixed
mortgage rates were chosen since long–term rate are the most common and the most highly targeted by the fed. The treasury bills were chosen in
order to compare to the mortgage rate since it is known that a large portion of QE was targeting the long term mortgage rates as opposed to short term
treasury bills, so we wanted to display the difference between the two.
The independent variables are the following: Money supply (M2), monetary base, fed funds rate (FFR), consumer price index (CPI), expected Inflation
(Mich), mortgage backed securities (MBS), Treasury securities, Baa, Aaa,baa10y, safety spread, QE1,

Taking a Look at Quantitative Easing
Globally financial crisis which lasted from 2008 until now has pushed the U.S. economy falling into prolonged inactivity, caused the U.S. Federal
Reserve (FED) to consecutive lower interest rate to lowest record 0 – 0.25 % and continuous launching QE packs huge "rescue" the economy . In
November 2008, the U.S. government has launched QE1 (Quantitative Easing) package when the financial crisis was in the most traumatic period. The
Fed has cut interest rates for the USD to 0 – 0.25 % and paid out approximately 1,700 billion to buy debt securities collateral guarantees and Treasury
bonds to increase the economy. In the impact of QE1, the U.S. economy has recovered in a short time but then there were some signs of decline.
Therefore, from November 30, 2010 through December 6, 2011, the Federal Reserve decided to start QE2 program with adding $600 billion to
purchase government bonds. To "save " and should continue to motivate the U.S. economy , the Fed has applied the program " Operation Twist " ,
also known as QE 2.5 , which contained two packages worth $400 billion and $267 billion . Thus, unlike conservative QE, the Fed programs do not
increase the money supply and expand the balance sheet of its assets, but only change the composition of the balance sheet using the available funds.
However, after QE1 and QE2 package, the U.S. economy still did not have many positive signs. The U.S. government chose to launch QE3 in 9/ 2012
and initiated to keep short –term interest rates

The Navy Is Easing Its Tattoo Policy
The Navy is easing its tattoo policy in a bid to recruit and retain more Sailors from the millennial generation, of whom more than one in three sport
body art.
Sailors will be allowed to have neck tattoos, sleeves and even markings behind their ears under the new policy, the most lenient of any military
service. Only their heads are off limits under the new policy, which the Navy 's top Sailor has called a reality check on the permanent art favored by
Sailors.
The leadership is going to reflect this new generation and mix it with the needs of the Navy. We need to make sure we are not missing any
opportunities to recruit or retain talents because of old policies.
1.1.4Summary of major issues and/or findings
Conduct more training. Training costs both time and money. This will be accounted for in the calculation of Net Present Value. The new rules will be
enforced by our senior leadership across more than 1,500 commands. All levels of leadership and recruiters will require training on enforcing the
revised rules, with a focus on location and context rules. Leaders need to provide clear examples of offensive tattoos and placements that are off limits,
so they can evenly enforce the standards throughout the fleet.
Establish an appeals process. Nothing is really in place and we could lose talented individuals if proper leadership tact is not applied. The cost of losing
talent will be explained in our cost and benefits sections below. Getting rid of a tattoo is not easy – or

Taking a Look at Quantitative Easing
During the financial crisis in 2008, the Central Banks (CB) tried to repair the economy by setting in action an open market operation (OMO). An
OMO is where the CB buys short–term bonds to increase the money supply. The CB's across the globe had to use a monetary policy instead of a
fiscal policy, partly due to countries sovereign debt problems . The CB's were buying short–term bonds until the real interest rate fell to zero. When the
real interest rate fell to zero it created liquidity trap. And CBs had to look to unconventional monetary policies to create a higher output. This paper
will seek to answer if unconventional monetary policies, specifically quantitative easing (QE), were effective on the economy or not. First, this
paper will explain what liquidity trap and how it is relevant. Second, it will explain how QE work. Third, it will conclude if QE were effective or not.
To question whether QE were effective or not it will use the American economy. This paper will illustrate liquidity trap and QE by using the models:
MS–MD, IS–LM and AS–AD. Liquidity trap is when short–term interest rate on short–term bonds falls close to zero or zero and OMO has no affect
on the interest rate. When the interest rate are close or at zero, the demand curve is flat or very elastic, so an increase in the money supply will not
have any affect on the interest rate. The demand curve for money is flat because people are anticipating a deflation or any negative shock to the
economy, and

Quantitative Easing Should Not Be A Measure Of Last Resort...
Quantitative Easing
"Quantitative easing" refers to an unorthodox monetary policy where a central bank would buy bonds and premiums to stimulate the economy when
the nominal interest rates are near or at zero. Since nominal interest rates cannot technically go below zero, this is done by pumping liquidity into the
economy so that asset prices would inflate. This technique had originated in the Bank of Japan (BOJ) during the early 2000s as an attempt to revive
Japan's stagnant economy. The United States Federal Reserve had implemented several plans similar to that of the BOJ after the 2008 financial crises,
and continued until late 2014. Quantitative easing should not be put into effect again because it has not significantly affected the economy positively
in the first place, it also risks hyperinflation, and if anything, it should be used only as a measure of last resort.
First, quantitative easing should not be implemented again because after numerous studies done, the policy had shown little positive difference in its
overall long–term effect. Although there have been some measurable effect (even in the Fed's announcement of these programs ) and some positive
progress unequally distributed in some areas (these will be discussed later), quantitative easing has not had a positive effect on equity prices, on the
money supply, nor on interest rates. Studies done by James L. Olsen of the Journal of Financial Planning find that both QE1 and QE2, which were the
Fed's first two

U.s. Federal Reserve Recently Ending Its Asset Purchase
Since the start of quantitative easing the world's central banks have printed billions of their respective currencies to buy financial assets from
commercial banks and other institutions. Bond and equity markets have adjusted higher and income inequality in advanced economies has risen.
This evidence raises the question: does quantitative easing favour a certain demographic? The U.S. Federal Reserve recently ending its asset purchase
program, any assessment of the effectiveness of quantitative easing must take into account its distributionary effect.
In the U.S. some of quantitative easing's harshest critics on an inequality basis are on the political right blaming quantitative easing for the rise in
inequality because it held down ... Show more content on Helpwriting.net ...
Criticisms that the developed world's central banks are directing wealth to the rich has made financial services employees uneasy. The response from
these people argues that with quantitative easing's distributional effects, it was a necessary to prevent an economic downturn.
Current Fed chairwoman Janet Yellen has conveyed a similar view when asked whether quantitative easing raised income inequality. She said: "the
intention of Fed policies undertaken have been to generate a robust economic recovery". Other (dovish) Fed members have taken a more direct
approach and have said the alternative would be far worse for people on average incomes.
James Bullard from the St Louis Fed, said recently that the increase in asset prices was not sufficient proof of quantitative easing's guilt in raising
inequality because asset valuations are more normal now than they in the years after the financial crisis. "This suggests that quantitative easing had no
medium term implications for U.S. income and/or wealth distribution. It is only as good or bad as it was before the crisis".
Some economists adept in the topic also support the view that loose monetary policy cannot be blamed for widening income gaps stating that any
policy that pulls an economy out of a downturn would appear to increase inequality. Even if wages grew by the same amount, the process of raising
expectations of future earnings would increase asset prices and so give money to the people exposed to these

What Is M & An Easing The Transaction Process
Corporate finance and M&A – easing the transaction process
A virtual data room is an online storage space for key documents. The data room is extremely useful in areas of corporate finance – the transactions are
time–critical and involve large volumes of confidential data. For the transactions to be secure and successful, Drooms NXG is a leading VDR
provider to help businesses take control of the M&A process.
Corporate finance transactions can be time–consuming. Both the selling and buying sides require access to large volumes of documentation in order to
complete the due diligence process. The information is often sensitive and confidential – Drooms data room guarantees access to information is secure
and compliant with the law. Drooms ... Show more content on Helpwriting.net ...
If there is an issue related to any part of the M&A process, the Q&A tool ensures the transaction is not halted.
Real time translation for faster transactions
With the innovative Findings Manager function, corporate finance and M&A teams can increase transactions speed by deeper data analytics. The
feature offers in–depth document analytics through the so–called red flag analysis. Risks and opportunities can be analysed in light of the transaction
documentation, marking any risks for further analysis. This automated service frees the team to focus on other aspects of the negotiations. In addition
to the document analytics, the Findings Manager also comes with compelling real time translation functionality. Documents can be translated on the go
– a feature that is extremely important for cross–border M&A. Together, the use of the latest natural language processing (NLP) technology can have a
huge speed boost to transactions.
Managing information better with Advanced Permission
Control of information is a key to transaction success. Drooms NXG uses a sophisticated Advanced Permission feature, which allows you to set access
rights and determine information flow. The distribution of information will be in your hands and the access rights can be updated at any time for
groups or individual users. With the permission rights, you are able to determine who is able to view, print, edit, or save the documents– allowing
flexibility and

Japan Yen
The Rise (and Fall) of the Japanese Yen
Lawrence Cifarelli III, Nazanin Ershad, Natthima Sonsoem, Anyesha Mahaptra
University of New Haven
Abstract
This Case study provides an insight to the fluctuations experienced in the currency of Japan, Yen from the late 1990's to recent years. Japan follows the
floating currency monetary policy due to which there is no measures taken on to control the fluctuations. Japan experienced magnificent growth through
the 60's, 70's, and 80's leading into the 90's beginning. In the late 1990's, Japan's economy marked its growth significantly slower, which had then
come to be known as the 'lost decade' due to Japanese Asset Price bubble that collapsed. Eventually the nation faced major issues regarding ... Show
more content on Helpwriting.net ...
For the following issues the Bank of Japan (BoJ) responded by embarking on Quantitative Easing (QE) in the early 2000's which did little to quell the
deflation and Yen Strength that had plagued the nation entirely.
The major problem for the export–heavy nation became the strength of the Yen. When the exporters saw a more expensive Yen, they faced more
difficulty to compete with domestic manufacturers in other nations. Also, due to extremely low rates of interest in Japan, it experienced massive
outflows of capital from retirees and investors looking for yield in other economies such as United States, Europe and Australia.
Subsequently, the Japanese economy maintained a long–lasting recovery beginning in early 2002. However, the path has not always been smooth,
given two "soft patches" (temporary softening in the market) and weakness in some parts of the economy.
Japan commenced on a multi–pronged approach by June 2012 in an urge to end the multi–decade slide that was seen in growth numbers for its
economy. This approach was initiated by Shinzo Abe during his campaign for Prime Minister, once installed as the political leader of Japan's economy
with Hiroki Kuroda installed as the head of the Bank of Japan, the country spurred into putting effort in order to inculcate inflation consequently
inflation back to the nation.
The current Japanese bond market bubble has contributed greatly to the fluctuation of the

The United States Federal Reserve 's Quantitative Easing...
INTRODUCTION
As part of our term project for the Topics in Macroeconomics class we were assigned the topic of linking the Keynesian view with the Great
Depression of the 1930s as well as using it to explain and critically evaluate the United States Federal Reserve's Quantitative Easing policy, which was
employed in an effort to combat the downfall of the world economy in the wake of the financial crisis of 2008.
The following resources were utilized to help us carry out our project:
Quantitative Easing: A Keynesian Critique By Thomas I. Palley
The History of Macroeconomics from Keynes's General Theory to the Present By M. De Vroey and P. Malgrange
Macroeconomic Principles – Chapter 17 By Libby Rittenberg and Tim Tregarthen WHAT... Show more content on Helpwriting.net ...
Policies that made the situation worst.
CAUSES OF GREAT DEPRESSION
The effect of great depression was mostly recorded in the United Nation. So we are going to discuss the causes that affected the U.S economy with a
brief look at how the world economy was affected as a result. The main cause that is noted in history was the decline in the consumption level of the
consumer, this had a direct effect on the production output and the inventories increased as the consumption level decreased to a great level. Due to
this setback the U.S economy was brought down to the bottom, the aggregate demand decreased at a substantial level. THE MAIN CAUSES OF THE
GREAT DEPRESSION
Contrary to popular belief, the Great Depression did not originate from the stock market crash of 1929. Yes, the stock market crash did result in
numerous people (mostly wealthy investors) losing a lot of money, but despite the gravity of the stock market crash we are reluctant to blame the stock
market crash as a trigger.
The roots of the Great Depression can be traced back to the First World War, which saw a large American infantry being mobilized. This mobilization
meant that a larger number of resources were required to sustain the war efforts. Farmers across the US started to raise their production and
consequently expanded rapidly to provide

Economic Issues That Can Prevail From Quantitative Easing
After the recent crash of the housing market which led to the collapse of the economy, the Federal Reserve Bank began to use an unconventional
monetary policy called quantitative easing. The purpose of this policy was to stimulate the economy by lowering interest rates, increasing the
circulation of money in the market and to ultimately decrease the unemployment rate. Although the idea of this phenomenon was to improve the
economic status of this country, it can also affect the country's financial system. The three major economic issues that can prevail from quantitative
easing is inflation, depreciation in the exchange rate and the Federal Reserve Bank's expansion of their balance sheet due to increase of security debts.
The way this concept works is that the central banks decided to fuel the economy by temporarily purchasing short and long term treasuries, mortgage
backed securities and corporate debt. Then, they inject the newly printed money into the banking systems to lower interest rates to create lending
opportunities to households and businesses. This mechanism promotes new business ventures and capital gains to increase the money supply and
stimulate the economy. However, many economists are concerned that this may lead to inflation because of the rise in money and how it can affect the
country's future once the economy recovers. However, there is an ongoing debate whether the policy actually causes inflation. Some economists argue
that if the government notices

Quantitative Easing Paper
Nov.06.2012
Ruixuan Ding
Corporate Finance
Quantitative Easing Paper
Introduction
United States confronted serious disorder in financial markets and steep declines in overall economic (Williams 2011) after 2007 financial crisis. The
financial crisis in 2007 and its subsequent negative effects greatly challenge the conventional understanding of recession and available monetary
policies to handle it. The US and global monetary authorities have been criticized for the excessively expansionary monetary strategies in last decade.
(Giraud 2012). In this prospective, the monetary policy after the 2001 recession remained "too lax for too long and this triggered asset–price inflation"
(Giraud 2012), not only in US housing but also in ... Show more content on Helpwriting.net ...
This situation is called "liquidity trap" and happens while there is a deflation or really low inflation. (Giraud 2010) Then central banks ask the
Quantitative Easing for help by buying a pre–determined amount of government bond and assets from private institutions. The purpose of this
unconventional strategy is to inject money into the economy directly to boost growth rather though reduced interest rate, which already cannot be any
lower. (Plosser 2009)
The definition for Quantitative Easing differed in different countries. And the Fed, BoJ and BoE even use totally distinguished terms to name the
Quantitative Easing, which indicates various unconventional measures in the scope of financial assets purchasing. The Fed using "Credit Easing" to
put a great concentration on private asserts purchasing and asset side of bank balance sheet. (Bernanke 2009) In contrary, BoJ from 2001 to 2006
concentrated on the liability side of balance sheets, focus on the current target for account balance. (Shiratsuka 2010) And England's Monetary
Committee began a programme of large assets purchases, which actually referred to Quantitative Easing. (Joyce, Lasaosa, Stevens, Tong 2010) The
difference rooted in the scope of Quantitative Easing are not only an aftermath of different purposes, but also due to the various financial circumstances
and regulations, several

Easing My Heart Inside Terry Mcmillanan Analysis
"Easing My Heart Inside" is a personal essay written by Terry McMillan on how she eventually became a writer without having a "conscious
decision." In her essay, she mentions the events, authors and their books that made the person who she is now. The focus McMillan is trying
underlay to the readers is that simply, "shit just happens." She points out how people's experiences and hobbies could eventually lead them to have an
unexpected career. When McMillan was in High School she got a job shelving books at her local library. This was the beginning of her "travels" with
the authors she met while reading. While in her exploration she met people with similarities to her. They were Amelia Earhart, Robert Frost, John
Steinbeck and with James

The Link Between The Non Conventional Monetary Policy Of...
This paper aims at addressing the link between the non conventional monetary policy of quantitative easing(QE), followed by the US, post the
financial crises of 2008, and the surge in the global corporate bond issuance. This is achieved by quantifying the impact of Long Scale Asset
Purchases(LSAP) which is divided into MBS/GSE debt and Treasury bonds, the two QE instruments, used to gauge the purchases and asset
holdings of the Federal Reserve. The developments in the global bond market are associated with two major effects: the "flow effect" and the "stock
effect" which induce portfolio rebalancing and give an impetus to the global bond issuance phenomenon. The former is associated with purchases
while the later is with asset holdings by the Fed. STRENGTHS Assessing the merits of the paper, it explores an interesting and crucial phenomenon
which can further be developed to create several other hypothesis and lead to revelations in the macroeconomic and monetary front. Hence, it is
significant to its field and also appropriate for the Journal of International Money and Finance. Furthermore, the structure and writing style of the
author is quite amenable to the general readers and special economic interest groups as well. The methodology adopted is fairly well analyzed
(except as places I shall elaborate later in this report) and is complemented by an array of graphs and data sets which simplify and elucidate the
understanding of the readers. The author has addressed

Why The Bank Of England Introduced A Quantitative Easing...
this essay I will be explaining why the Bank of England introduced a quantitative easing programme and how it operates as well as explaining the
effect this programme has had by evaluating if it has been successful. My essay is in five sections: what is quantitative easing, when was it used and
why, how does it work, impacts of the programme and finally has it been successful. What is quantitative easing?
Quantitative easing is increasing the flow of money into the financial system. Money has three functions:
1.Unit of account
2.Store of value
3.Means of payment
Quantitative easing uses money as a means of payment. It is used as a tool of monetary policy when the other tool of monetary policy which is interest
rate is near zero and not increasing. Monetary policy concerns the way in which government actions shift how money is used.
When was it used and why?
The Bank of England started to use quantitative easing in early 2009 as an act of loose monetary policy to boost the economy after the recession of
2008. When economy falls into recession, incomes fall as unemployment rises – this means that the government pays more benefits increasing the
budget deficit. This also means that consumer expenditure decreases as consumptions fall with income falling.
Therefore the excess expenditure needs to be covered – it can be covered by taxes, issuing bonds, issuing money. Increasing taxes will not work as
unemployment has gone up. As well as this increasing tax will not work

Quantitative Easing During the Bush and Obama Administrations
Quantitative easing is an unusual form of policy used when interest rates are near 0%. Banks rouse the nationwide financial system when usual
monetary policies have become ineffective. In recent decades the government Central bank has argued they are the government's most important
financial agency.
Throughout their power to change interest rates and buy massive amounts of financial assets, the Federal Reserve System applied more influence over
economic growth and the employment rate in recent times than any other government entity.
During the Obama administration it's been used to sustain the financial system after the Wall Street meltdown in 2008; it also gave the economy
extraordinarily methods of support during the recession such as ... Show more content on Helpwriting.net ...
Quantitative easing is in limited use when problems are a lack of need, businesses and consumers were not interested in spending during high
unemployment times knowing that money is cheaper. Stock markets were advertised more, costs of American exports were lowered it also allowed
companies to borrow money at lower interest rates.
Using quantitative easing has helped the recovery of the USA and other developing countries. The Fed's then limited their ability to pursue more
measures, but congress ignored those appeals to help support the economy. The Fed's decided to use smaller steps to help investor expectations and to
prevent a possible financial crisis in Europe. In 2011 it was announced that the FED's would hold short–term interest rates close to zero percent through
2013; to help support the economy. Soon after it was announced that using the "twist" operation would push long–term interest rates down, by
purchasing $400 billion in long–term treasury securities with profits from the sale of the short–term government debt. Inaugurating a policy to help
shape market expectations, which will raise interest rates at the end of 2014.
This all started when Bush came into office in the 2000's with a budget surplus left from former democratic President Bill Clinton. The first bill Bush
decided to sign was the Economic Growth and Tax Relief Recognition Act of 2001, which cut tax rates across the board. Throughout the years

The Global Financial Crisis and Its Impact
1.0 The Global Financial Crisis and Its Impact
The recent Global Financial Crisis (GFC) initially began with the collapse of credits and financial markets, which caused by the sub–prime mortgage
crisis in the US in 2007. The sub–prime mortgages were given to high–risk lenders (with bad credit history) who were in danger of defaulting, which
eventually caused a global credit crunch, where the banks were unwilling to lend to each other. In October 2008, the collapse of the major financial
institutions and the crash of stock markets marked the peak of this global economic slowdown (Euromonitor International, 2008).
Although the origin of the GFC might have been the housing and financial crisis in the US, it affected both developed and ... Show more content on
Helpwriting.net ...
Moreover, if the interest rate maintains its position, the output would decrease even further (Chhabra, 2009).
3.2 Unconventional Monetary Policy
Despite that many countries had reduced their interest rate to the lowest possible, a number of unconventional monetary policy have also been applied
to face the challenges of the GFC. Quantitative easing and credit easing are the tools of unconventional monetary policy (Ashworth, 2013).
Quantitative Easing
Under conventional monetary policy, central banks try to boost economies indirectly through cutting interest rates. Quantitative easing occurs when an
interest rate has reached its lowest, the central bank decides to increase the size of its reservation to purchase securities from private and public sectors.
It forced the interest rate to stay downward and thereby the prices stay high. For the purposes of increase financial market's liquidity and generate
addition loans, central banks also pumping money directly into the market under quantitative easing policy (Murray, 2009). The Bank of Japan first
applied to the theory due to a constant deflation in the economy in the beginning of the 21th century ("What is Quantitative Easing", 2013).
The quantitative easing of the US began in the late 2008, with the announcement that government would purchase a total value of $600 billion of
agency debt from the Government Sponsored

The Performance Of Bank Of England
The Performance of Bank of England and How the Outcomes Influenced by Policies and Objectives during the Financial Crisis in 2008
Introduction In September 2008, thousands of financial sectors all over the world went bankrupt like dominoes after the failure of Lehman
Brothers Bank, which is also known as the Financial Crisis of 2008, caused the severe recession of the economies around the world. In order to
help the country out of crisis, the central banks in different countries had to take measures to stimulate the growth of economy. The goal of this
essay is to introduce the measures that Bank of England have taken in 2008 of financial crisis and will discuss the macroeconomics consequences
and effects. Three measures taken by Bank of England will be presented in first section and how macroeconomics outcomes influenced by policies
and objectives will be discussed in the second section. The Performance of Bank of England in Financial Crisis in 2008 Following the crisis of
Fannie Mae and Freddie Macin Summer 2007, which is the beginning of the financial crisis of 2008, John et al (2012) find that Bank of England kept
on providing liquidity to banks and making an exchange between high–quality assets and Treasury Bills through liquidity support operations and
financial innovations which were also used by many other central banks. Adopting this approach means that Bank of England can make the financial
sectors more easily to receive financing on such circumstance (Joyce

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