Impossible Trinity for Dummies
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The concept of impossible trinity in Macro-Economics, Course handled by Prof. Rudra Sen Sarma, IIM Kozhikode. Presented for an introduction into Macro Economics concepts
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impossible trinity Economics presentation
This document discusses the impossible trinity, which is the hypothesis that it is impossible for a country to have free capital flow, a fixed exchange rate, and an independent monetary policy simultaneously. It explains each of the three factors - free capital flow, fixed exchange rate, and independent monetary policy - and provides examples. The document then discusses India's policy approach and how it has opted to allow free capital flow and a floating exchange rate while prioritizing independent monetary policy. It concludes that there is no perfect solution and countries must choose based on their priorities and circumstances.
Relation between interest and exchange rate
This document summarizes a macroeconomics project on the relationship between inflation, interest rates, and exchange rates. It defines key terms like foreign exchange markets, exchange rates, and interest rate parity theory. It then discusses theories of interest rate parity, purchasing power parity, and the balance of payments. Case studies on Albania and Kenya analyze the relationship between domestic interest rates and currency exchange rates. The impact on the Indian economy and future policy suggestions are also covered.
Foreign Exchange Market
The document provides an overview of the foreign exchange market and the Reserve Bank of India's (RBI) role in managing it. It discusses the basic concepts and participants in the FX market. It describes the historical evolution from a fixed exchange rate regime to a more liberalized and market-based system. It also outlines the RBI's tools for intervening in the interbank market to influence exchange rates and maintain stability, including through moral suasion, relaxing exposure limits, and direct buying and selling of currencies.
Monetary policy
Monetary policy is formulated by central banks to control money supply and achieve macroeconomic stability. The document discusses the objectives, instruments, and limitations of monetary policy. It explains that central banks use quantitative methods like bank rates, reserve ratios, and open market operations as well as qualitative methods like regulating consumer credit to influence money supply during inflationary and recessionary periods. However, monetary policy is not always effective due to factors such as an underdeveloped financial system, money not being borrowed from banks, and interest rates sometimes having unintended impacts.
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I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
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Exchange rate determination.
This paper develops an equilibrium model of the determination of exchange rates and prices of goods. Changes in relative prices due to supply or demand shifts induce changes in exchange rates and deviations from purchasing power parity. These changes may create a correlation between the exchange rate and the terms of trade, but this correlation cannot be exploited by governments to affect the terms of trade through foreign exchange market operations. The model emphasizes the role of relative price changes due to real disturbances and how these changes affect both exchange rates and the terms of trade through shifts in supply and demand. Government interventions in foreign exchange markets cannot influence exchange rates if the relationship between exchange rates and terms of trade is due to shifts in real supply and demand for domestic and foreign goods.
Purchasing power parity
This document discusses the theory of purchasing power parity (PPP). PPP states that exchange rates should adjust so that a currency can buy the same amount of goods and services in all countries. It is based on the law of one price, which says that goods must sell for the same price globally after accounting for exchange rates. The nominal exchange rate between two currencies should reflect differences in their price levels. Limitations of PPP include the fact that not all goods trade globally and tradable goods from different countries are not always perfect substitutes.
Factors affecting exchange rates
This document discusses factors that affect foreign exchange rates, including relative inflation rates between countries, interest rates, international trade balances, foreign currency supply, and net international reserves of a country. Floating and managed exchange rate regimes are also covered. The author predicts that the Egyptian pound will face challenges maintaining its value against the US dollar in 2009 due to declining factors like international reserves and an increasing trade deficit, and may depreciate to reach 6 Egyptian pounds per US dollar by the end of the year.
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impossible trinity Economics presentation
This document discusses the impossible trinity, which is the hypothesis that it is impossible for a country to have free capital flow, a fixed exchange rate, and an independent monetary policy simultaneously. It explains each of the three factors - free capital flow, fixed exchange rate, and independent monetary policy - and provides examples. The document then discusses India's policy approach and how it has opted to allow free capital flow and a floating exchange rate while prioritizing independent monetary policy. It concludes that there is no perfect solution and countries must choose based on their priorities and circumstances.
Relation between interest and exchange rate
This document summarizes a macroeconomics project on the relationship between inflation, interest rates, and exchange rates. It defines key terms like foreign exchange markets, exchange rates, and interest rate parity theory. It then discusses theories of interest rate parity, purchasing power parity, and the balance of payments. Case studies on Albania and Kenya analyze the relationship between domestic interest rates and currency exchange rates. The impact on the Indian economy and future policy suggestions are also covered.
Foreign Exchange Market
The document provides an overview of the foreign exchange market and the Reserve Bank of India's (RBI) role in managing it. It discusses the basic concepts and participants in the FX market. It describes the historical evolution from a fixed exchange rate regime to a more liberalized and market-based system. It also outlines the RBI's tools for intervening in the interbank market to influence exchange rates and maintain stability, including through moral suasion, relaxing exposure limits, and direct buying and selling of currencies.
Monetary policy
Monetary policy is formulated by central banks to control money supply and achieve macroeconomic stability. The document discusses the objectives, instruments, and limitations of monetary policy. It explains that central banks use quantitative methods like bank rates, reserve ratios, and open market operations as well as qualitative methods like regulating consumer credit to influence money supply during inflationary and recessionary periods. However, monetary policy is not always effective due to factors such as an underdeveloped financial system, money not being borrowed from banks, and interest rates sometimes having unintended impacts.
Fiscal & Monetary Policy
I’m a young Pakistani Blogger, Academic Writer, Freelancer, Quaidian & MPhil Scholar, Quote Lover, Co-Founder at Essar Student Fund & Blueprism Academia, belonging from Mehdiabad, Skardu, Gilgit Baltistan, Pakistan.
I am an academic writer & freelancer! I can work on Research Paper, Thesis Writing, Academic Research, Research Project, Proposals, Assignments, Business Plans, and Case study research.
Expertise:
Management Sciences, Business Management, Marketing, HRM, Banking, Business Marketing, Corporate Finance, International Business Management
For Order Online:
Whatsapp: +923452502478
Portfolio Link: https://blueprismacademia.wordpress.com/
Email: arguni.hasnain@gmail.com
Follow Me:
Linkedin: arguni_hasnain
Instagram : arguni.hasnain
Facebook: arguni.hasnain
Exchange rate determination.
This paper develops an equilibrium model of the determination of exchange rates and prices of goods. Changes in relative prices due to supply or demand shifts induce changes in exchange rates and deviations from purchasing power parity. These changes may create a correlation between the exchange rate and the terms of trade, but this correlation cannot be exploited by governments to affect the terms of trade through foreign exchange market operations. The model emphasizes the role of relative price changes due to real disturbances and how these changes affect both exchange rates and the terms of trade through shifts in supply and demand. Government interventions in foreign exchange markets cannot influence exchange rates if the relationship between exchange rates and terms of trade is due to shifts in real supply and demand for domestic and foreign goods.
Purchasing power parity
This document discusses the theory of purchasing power parity (PPP). PPP states that exchange rates should adjust so that a currency can buy the same amount of goods and services in all countries. It is based on the law of one price, which says that goods must sell for the same price globally after accounting for exchange rates. The nominal exchange rate between two currencies should reflect differences in their price levels. Limitations of PPP include the fact that not all goods trade globally and tradable goods from different countries are not always perfect substitutes.
Factors affecting exchange rates
This document discusses factors that affect foreign exchange rates, including relative inflation rates between countries, interest rates, international trade balances, foreign currency supply, and net international reserves of a country. Floating and managed exchange rate regimes are also covered. The author predicts that the Egyptian pound will face challenges maintaining its value against the US dollar in 2009 due to declining factors like international reserves and an increasing trade deficit, and may depreciate to reach 6 Egyptian pounds per US dollar by the end of the year.
ARGUMENTS FOR FIXED AND FLUCTUATING EXCHANGE RATES
This document discusses the merits and demerits of fixed and flexible exchange rates. Fixed exchange rates involve exchange transactions occurring at a rate set by the central bank. This provides predictability but requires large foreign currency reserves and exchange controls. Flexible rates are set by supply and demand, automatically addressing balance of payments issues but causing uncertainty through speculation and fluctuations. In conclusion, governments often use fixed rates which require balance of payments adjustments through policy measures.
Monetary policy
Monetary policy involves controlling the supply of money and interest rates to achieve economic goals like price stability and growth. The monetary authority, such as a central bank, uses various tools to influence factors such as inflation, employment, and economic output. Expansionary policy increases the money supply to boost the economy during recessions, while contractionary policy decreases the supply to curb inflation. In India, the Reserve Bank of India pursues monetary policy goals like price stability through instruments affecting bank reserves, lending rates, and money circulation.
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This document discusses business and trade cycles. It provides three main theories for the causes of trade cycles:
1. Schumpeter's innovation theory which argues that business cycles are caused by periodic bursts of innovation by capitalists. This leads to periods of boom and recession as innovations are adopted.
2. Samuelson's multiplier-accelerator theory which explains how interactions between consumption, investment, and income can cause fluctuations in economic activity through feedback loops.
3. Hicks' theory which views trade cycles as temporary deviations around an economy's steady growth path. It analyzes how increases in autonomous investment can trigger boom-bust cycles through multiplier and accelerator effects.
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The document defines foreign exchange rates as the price at which one currency can be converted into another. It discusses the history of currencies, including bartering systems and the introduction of coins and paper money in India. The document also examines the devaluation of the Indian rupee in the 1970s due to various economic and political factors. Additionally, it describes the differences between fixed and floating exchange rate systems and various factors that influence exchange rates such as inflation rates, interest rates, and political stability.
Monetary policy
Monetary policy aims to control money supply and interest rates to achieve objectives like price stability and economic growth. In India, the Reserve Bank of India implements monetary policy through tools like open market operations, cash reserve ratio, statutory liquidity ratio, and bank rate policy. The objectives of monetary policy include price stability, controlled expansion of bank credit, and promotion of exports. However, monetary policy faces limitations like time lags, difficulties in forecasting, and the growth of non-banking financial institutions.
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Foreign Exchange Reserves
Central banks hold foreign exchange reserves in different currencies to maintain the external value of their domestic currency and reduce the impact of economic problems. Foreign exchange reserves became popular after the decline of the gold standard as countries used them through central banks to stabilize exchange rates. Central banks can impact foreign exchange reserves through currency issuance, import/export restrictions, currency value fluctuations, and transferring reserves without affecting domestic currency value. The top foreign exchange reserve holdings are in US dollars, pounds, yen, francs, Canadian dollars, Australian dollars, and euros. Foreign exchange reserves boost confidence, help overcome economic crises, aid currency market control and stabilization, and indicate debt repayment ability and credit ratings. As of now, Pakistan holds $8.4
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2) Dutch disease refers to an economic phenomenon where resource discovery leads to decline of other sectors through currency appreciation and a shift in economic activity.
3) The resource curse or paradox of plenty suggests that countries with an abundance of natural resources tend to have less economic growth and worse development outcomes than countries with fewer natural resources, due to issues like overdependence on commodity exports and weak institutions.
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Fiscal policy is the means by which a government adjusts its spending levels and tax rates to influence a nation's economy. The key components of fiscal policy are taxation policy, public expenditure policy, public debt policy, and deficit financing. In India, the objectives of fiscal policy include mobilizing resources for economic development, increasing investment and savings, reducing poverty and inequality, and generating employment. While fiscal policy has contributed to India's capital formation and development, it also faces limitations such as a weak policymaking machinery, political influences, and a high interest burden from public debt. Reforms are needed to improve fiscal policy, including rationalizing the tax structure.
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The document discusses exchange rate mechanisms and types of exchange rates. It provides details about:
1) The Exchange Rate Mechanism (ERM) which is used by central banks to manage currency exchange rates relative to other currencies through fixed or floating exchange rates.
2) The notable European ERM introduced in 1979 to reduce exchange rate variability between European countries before adopting a single currency. It faced issues in 1992 when Britain withdrew.
3) Types of exchange rates including fixed rates which maintain stable rates, floating rates set by market forces, and managed floats where governments influence rate changes.
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This document discusses the causes, measures, and effects of inflation. It defines inflation as a sustained increase in price levels over time. Inflation can be caused by factors that increase demand, like rising incomes or government spending, or restrict supply, like shortages or natural disasters. Measures to control inflation include monetary policies that reduce the money supply, fiscal policies like tax increases, and other policies like price controls or rationing. Inflation affects different groups in different ways - it can help debtors but hurt creditors or people on fixed incomes. The Phillips Curve model shows an inverse relationship between unemployment and wage inflation rates.
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Monetary policy
Monetary policy involves controlling the supply of money and interest rates to achieve economic goals like price stability and growth. The monetary authority, such as a central bank, uses various tools to influence factors such as inflation, employment, and economic output. Expansionary policy increases the money supply to boost the economy during recessions, while contractionary policy decreases the supply to curb inflation. In India, the Reserve Bank of India pursues monetary policy goals like price stability through instruments affecting bank reserves, lending rates, and money circulation.
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1. Schumpeter's innovation theory which argues that business cycles are caused by periodic bursts of innovation by capitalists. This leads to periods of boom and recession as innovations are adopted.
2. Samuelson's multiplier-accelerator theory which explains how interactions between consumption, investment, and income can cause fluctuations in economic activity through feedback loops.
3. Hicks' theory which views trade cycles as temporary deviations around an economy's steady growth path. It analyzes how increases in autonomous investment can trigger boom-bust cycles through multiplier and accelerator effects.
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The European Monetary System
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The document summarizes the International Monetary Fund (IMF), including its creation, mandate, functions, governance, and lending policies. The IMF was established in 1944 at the United Nations Monetary and Financial Conference to promote international monetary cooperation and stability. It monitors global economic and financial conditions and provides loans to countries experiencing economic difficulties. The IMF is governed by its 185 member countries and aims to foster global economic growth, employment, and trade.
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The document defines foreign exchange rates as the price at which one currency can be converted into another. It discusses the history of currencies, including bartering systems and the introduction of coins and paper money in India. The document also examines the devaluation of the Indian rupee in the 1970s due to various economic and political factors. Additionally, it describes the differences between fixed and floating exchange rate systems and various factors that influence exchange rates such as inflation rates, interest rates, and political stability.
Monetary policy
Monetary policy aims to control money supply and interest rates to achieve objectives like price stability and economic growth. In India, the Reserve Bank of India implements monetary policy through tools like open market operations, cash reserve ratio, statutory liquidity ratio, and bank rate policy. The objectives of monetary policy include price stability, controlled expansion of bank credit, and promotion of exports. However, monetary policy faces limitations like time lags, difficulties in forecasting, and the growth of non-banking financial institutions.
Foreign Exchange Market.ppt
This document provides an overview of the foreign exchange market. It begins with definitions, including that the foreign exchange market is where trading of currencies takes place through electronic media. It then discusses the history and evolution of currency exchange systems. It also outlines different exchange rate systems countries use and why investors choose the foreign exchange market. The document discusses advantages and disadvantages, characteristics, financial instruments, functions, types of exchange rates, factors affecting exchange rates, participants, and types of foreign exchange risk.
Foreign Exchange Reserves
Central banks hold foreign exchange reserves in different currencies to maintain the external value of their domestic currency and reduce the impact of economic problems. Foreign exchange reserves became popular after the decline of the gold standard as countries used them through central banks to stabilize exchange rates. Central banks can impact foreign exchange reserves through currency issuance, import/export restrictions, currency value fluctuations, and transferring reserves without affecting domestic currency value. The top foreign exchange reserve holdings are in US dollars, pounds, yen, francs, Canadian dollars, Australian dollars, and euros. Foreign exchange reserves boost confidence, help overcome economic crises, aid currency market control and stabilization, and indicate debt repayment ability and credit ratings. As of now, Pakistan holds $8.4
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The document discusses several economic concepts:
1) The Rybczynski theorem explains that if a country's supply of one factor increases, it will produce more of the good that intensively uses that factor and less of the other good.
2) Dutch disease refers to an economic phenomenon where resource discovery leads to decline of other sectors through currency appreciation and a shift in economic activity.
3) The resource curse or paradox of plenty suggests that countries with an abundance of natural resources tend to have less economic growth and worse development outcomes than countries with fewer natural resources, due to issues like overdependence on commodity exports and weak institutions.
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This study examines factors that influence consumers' intentions to purchase foreign exchange products online. It analyzes how internet usage, website content, context, infrastructure, and trust impact purchase intention. The results show that trust in brokers and the market, positive website context design, and reliable infrastructure positively correlate with purchase intention. Website content was found to have less influence. Overall, the study aims to help foreign exchange companies better understand what drives online purchasing and loyalty in order to improve their services and attract more investors.
Monetary Policy
KEY TAKE AWAY:
What is Monetary policy?
Objectives of Monetary policy?
Types of Monetary policy?
Tools of Monetary policy?
Significance of Monetary policy?
22 stabilization policy
This document summarizes key concepts from a chapter on stabilization policy. It discusses debates around whether the government should take an active or passive role in stabilizing the economy. It also examines criticisms of discretionary policy and arguments for rule-based policy. The document defines important terms like inside and outside lags, automatic stabilizers, leading indicators, the Lucas Critique, political business cycles, time inconsistency, and monetarism.
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The fed and monetary policy
The Federal Reserve uses three main tools to implement monetary policy: open market operations, the reserve ratio, and the discount rate. Open market operations, which involve buying and selling Treasury securities, are the most important tool as they directly change the amount of bank reserves and money supply. The Fed conducts expansionary policy by buying Treasury securities to increase bank reserves and money supply, while contractionary policy involves selling securities to decrease reserves and money supply. The reserve ratio and discount rate can also expand or contract the money supply but are used less due to their greater impact.
Fiscal policy 227
Fiscal policy is the means by which a government adjusts its spending levels and tax rates to influence a nation's economy. The key components of fiscal policy are taxation policy, public expenditure policy, public debt policy, and deficit financing. In India, the objectives of fiscal policy include mobilizing resources for economic development, increasing investment and savings, reducing poverty and inequality, and generating employment. While fiscal policy has contributed to India's capital formation and development, it also faces limitations such as a weak policymaking machinery, political influences, and a high interest burden from public debt. Reforms are needed to improve fiscal policy, including rationalizing the tax structure.
Monetary policy (theoritical)
This document provides an overview of monetary policy, including its definition, objectives, tools, and role in economic growth. Monetary policy is defined as the process by which a central bank controls the supply of money in an economy, often targeting interest rates to promote growth and stability. The major objectives of monetary policy are price stability, economic growth, and stable exchange rates. The key tools of monetary policy are open market operations, bank rates, cash reserve ratios, and credit controls. Monetary policy aims to influence aggregate demand and output through expanding or contracting the money supply.
Chapter 07_Central Banking and the Conduct of Monetary Policy
The document discusses the structure and operations of central banks, focusing on the U.S. Federal Reserve System. It describes the origins of the Fed following financial panics in the 19th century. The structure of the Fed involves 12 regional banks, a Board of Governors, and the Federal Open Market Committee. Central bank independence and its relationship to macroeconomic performance is also examined.
Exchange Rate Mechanism (ERM) & Exchange Rate and Types
The document discusses exchange rate mechanisms and types of exchange rates. It provides details about:
1) The Exchange Rate Mechanism (ERM) which is used by central banks to manage currency exchange rates relative to other currencies through fixed or floating exchange rates.
2) The notable European ERM introduced in 1979 to reduce exchange rate variability between European countries before adopting a single currency. It faced issues in 1992 when Britain withdrew.
3) Types of exchange rates including fixed rates which maintain stable rates, floating rates set by market forces, and managed floats where governments influence rate changes.
Inflation causes and its measures
This document discusses the causes, measures, and effects of inflation. It defines inflation as a sustained increase in price levels over time. Inflation can be caused by factors that increase demand, like rising incomes or government spending, or restrict supply, like shortages or natural disasters. Measures to control inflation include monetary policies that reduce the money supply, fiscal policies like tax increases, and other policies like price controls or rationing. Inflation affects different groups in different ways - it can help debtors but hurt creditors or people on fixed incomes. The Phillips Curve model shows an inverse relationship between unemployment and wage inflation rates.
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The East Asian economic crisis in the late 1990s affected several countries in the region. It was caused by weak domestic policies, global financial liberalization, and speculative attacks on currencies with fixed exchange rates. Thailand was hit first as investors lost confidence in its currency, the baht. The crisis led to sharp declines in currencies, stock markets, and asset prices across Asia. It also had spillover effects globally. The IMF responded by providing loans with conditions for austerity measures, which deepened recessions. Countries have since rebuilt their economies and financial systems to be stronger against future crises.
US Crisis And The Dollar
The document summarizes the US financial crisis and its impact on the US dollar and global economy. It discusses how loose lending standards, mortgage-backed securities, and credit default swaps led to the crisis. Central banks have responded by printing vast sums of money to inject liquidity. However, coordinated global policy action is also needed to rebalance global imbalances between surplus and deficit countries. Going forward, the world faces challenges around debt contraction and whether $8 trillion is sufficient given potential solvency issues rather than just liquidity problems.
Asian financial crisis
The Asian Financial Crisis began in July 1997 and severely impacted economies across Asia, including Thailand, Indonesia, South Korea, and other countries. The crisis was triggered by Thailand deciding to float its currency, the baht, causing its value to collapse and spread contagion to other economies. Weak financial systems, liberalization of capital flows, overreliance on foreign capital, and inconsistent economic policies contributed to the crisis by exposing vulnerabilities and causing investors to lose confidence. The crisis represented a failure of many parties to identify risks and prevent the downturn.
Asian fianancial crisis
Asian Financial Crisis in 1997
Asia before Financial Crisis
Beginning of Asian Financial Crisis
Affected countries from Asian financial Crisis
End of Asian Financial Crisis
IMF role during Asian financial crisis
3 Causes of Asian Financial Crisis
Impact of Asian Financial Crisis to:
Thailand
Philippines
Malaysia
Japan
How these countries overcame the Crisis
Current developments to Avoid future financial crisis
Causes of the 1997 South East Asian Financial Crises & its Impact on the Fina...
The 1997 Asian Financial Crisis began in Thailand and spread to other Southeast Asian countries as well as Japan, South Korea and Russia. It was caused by currency speculation and excess foreign debt taken on by countries to finance real estate bubbles and investments. When Thailand floated its currency, it collapsed and investors fled the region, causing currencies and stock markets to crash across Asia. The IMF intervened but its austerity measures exacerbated recessions. The crisis had global impacts including the 1998 Russian crisis and LTCM collapse. It reduced confidence in globalization and international financial institutions.
The Asian Debt Crisis of the 1990's
The document summarizes the Asian financial crisis of the late 1990s. It describes how large capital inflows into Southeast Asian countries in the early 1990s fueled economic booms and real estate bubbles. However, the bubbles eventually burst when foreign investors began pulling money out. This led Thailand to float its currency in July 1997, sparking a financial crisis that spread to other countries through currency devaluations and falling stock markets. The IMF intervened with bailout packages that required economic reforms. The crisis exposed issues with crony capitalism and overreliance on foreign capital inflows in the region.
world financial crisis
The document discusses the global financial crisis and its effects on India. It notes that while India saw high GDP growth and a booming stock market in recent years, the crisis caused inflation, slowing growth, a falling stock market, and a declining rupee. The root causes of the crisis are said to be the rapid globalization and integration of financial markets beyond the control of national institutions. A world currency is proposed as an eventual solution to better regulate global capital flows and promote stability and growth worldwide.
SOUTH EAST ASIAN CRISIS- OE PART 2 notes copy.pptx
The 1997 Asian Financial Crisis originated in Thailand and spread to other Southeast Asian countries such as Indonesia, South Korea, Hong Kong, and Malaysia. The crisis was caused by currency depreciation and heavy reliance on short-term borrowing in foreign currencies in the affected countries. This led to a panic as investors withdrew their money, stock markets collapsed, and property values plunged. The crisis required International Monetary Fund bailouts worth over $100 billion to prevent further spread around the globe.
1997 asian financial crisis indonesia final
The document summarizes the 1997 Asian Financial Crisis, its causes, and its effects. It discusses several key points:
1) The crisis was caused by hot money flows leaving Southeast Asian countries as US interest rates increased, combined with financial deregulation and property bubbles in the region.
2) Countries like Indonesia were affected as currencies fell sharply against the US dollar, foreign debt became more expensive to pay back, and the IMF's austerity policies exacerbated economic downturns.
3) The crisis had severe socioeconomic impacts on Indonesia like increased poverty, high inflation, business bankruptcies, and currency depreciation weakening manufacturing industries. GDP growth fell sharply and poverty rates rose significantly.
China & EM fallout
This document provides a summary of slides for a presentation on the risks facing China's economy and currency. It discusses the large capital outflows from China, the end of China's currency carry trade, declining foreign exchange reserves, and deflationary pressures. The document argues that China will be forced to allow greater depreciation of its currency, the renminbi, in order to regain control over monetary policy and restore competitiveness. It predicts a disorderly disruption in China could cause a 20% or greater fall in the renminbi and trigger widespread turmoil across emerging markets similar to the 1997 Asian financial crisis.
South east asian financial crises 1997
The Asian Financial Crisis began in Thailand in 1997 and spread to other Asian countries, sparking fears of a global economic meltdown. Thailand's currency collapsed under the weight of foreign debt, driving the country into bankruptcy. As the crisis spread, currencies and stock markets declined across Southeast Asia and Japan. The crisis stemmed from inappropriate borrowing by the private sector for speculative investments during a period of strong economic growth. When firms could not repay loans, creditors withdrew funds from the region, placing further pressure on currencies. The crisis exposed weaknesses like overvalued currencies, inadequate financial regulation, and heavy reliance on short-term external debts. Governments and the IMF implemented policies to stabilize currencies and financial systems while addressing rising unemployment and social impacts.
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Chapter wise All Notes of First year Basic Civil Engineering
Syllabus
Chapter-1
Introduction to objective, scope and outcome the subject
Chapter 2
Introduction: Scope and Specialization of Civil Engineering, Role of civil Engineer in Society, Impact of infrastructural development on economy of country.
Chapter 3
Surveying: Object Principles & Types of Surveying; Site Plans, Plans & Maps; Scales & Unit of different Measurements.
Linear Measurements: Instruments used. Linear Measurement by Tape, Ranging out Survey Lines and overcoming Obstructions; Measurements on sloping ground; Tape corrections, conventional symbols. Angular Measurements: Instruments used; Introduction to Compass Surveying, Bearings and Longitude & Latitude of a Line, Introduction to total station.
Levelling: Instrument used Object of levelling, Methods of levelling in brief, and Contour maps.
Chapter 4
Buildings: Selection of site for Buildings, Layout of Building Plan, Types of buildings, Plinth area, carpet area, floor space index, Introduction to building byelaws, concept of sun light & ventilation. Components of Buildings & their functions, Basic concept of R.C.C., Introduction to types of foundation
Chapter 5
Transportation: Introduction to Transportation Engineering; Traffic and Road Safety: Types and Characteristics of Various Modes of Transportation; Various Road Traffic Signs, Causes of Accidents and Road Safety Measures.
Chapter 6
Environmental Engineering: Environmental Pollution, Environmental Acts and Regulations, Functional Concepts of Ecology, Basics of Species, Biodiversity, Ecosystem, Hydrological Cycle; Chemical Cycles: Carbon, Nitrogen & Phosphorus; Energy Flow in Ecosystems.
Water Pollution: Water Quality standards, Introduction to Treatment & Disposal of Waste Water. Reuse and Saving of Water, Rain Water Harvesting. Solid Waste Management: Classification of Solid Waste, Collection, Transportation and Disposal of Solid. Recycling of Solid Waste: Energy Recovery, Sanitary Landfill, On-Site Sanitation. Air & Noise Pollution: Primary and Secondary air pollutants, Harmful effects of Air Pollution, Control of Air Pollution. . Noise Pollution Harmful Effects of noise pollution, control of noise pollution, Global warming & Climate Change, Ozone depletion, Greenhouse effect
Text Books:
1. Palancharmy, Basic Civil Engineering, McGraw Hill publishers.
2. Satheesh Gopi, Basic Civil Engineering, Pearson Publishers.
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Tags: Information Security, ISO/IEC 27001, ISO/IEC 42001, Artificial Intelligence, GDPR
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Impossible Trinity for Dummies
- 2. IMPOSSIBLE TRINITY A PEEK INTO THE REALM OF IMPOSSIBILITY GROUP 6
- 3. FIXED EXCHANGE RATE A currency’s value is fixed against the value of another single currency Used to stabilize the value of a currency against the currency it is pegged to Makes trade and investments between the two currency areas easier and more predictable Reduces volatility and fluctuations in relative prices Eliminates exchange rate risk by reducing the associated uncertainty Useful for small economies
- 4. FREE CAPITAL MOVEMENT Freedom to move money to other countries and invest easily Governments want to make easy for companies to invest in their country, setting up factories and employing people Making global movement as easy as possible, money can move to the places where it is needed the most and can make the best return
- 5. INDEPENDENT MONETARY POLICY Control over interest rates Adjusted to suit the specific needs of the economy If the economy is in a recession or a slow down, interest rates can be lowered to give the economy a boost. If the economy is overheating or in a bubble with too high inflation, interest rates can be raised
- 6. Free Flow of Capital Fixed Exchange Rate Autonomous Monetary Policy
- 7. WELCOME TO MICKEY-LAND A prosperous land with rich natural resources Central Bank Governor of MickeyLand learns of the Impossible Trinity.
- 8. ‘MICKEYLAND’ WANTS ECONOMIC GROWTH – (Scene 1) The of Mickey-Land is worried about the recent Economic Slowdown He decides to encourage all kinds of business in Mickey- Land by giving loans at Low Interest Rates Mickey Dollars are easily available Businesses are growing
- 9. MICKEY $ IN TROUBLE (Scene 2) Mickey Dollars are now easily available in MickeyLand. Enter Uncle Scrooge (U.S) Rich Uncle Scrooge(U.S) now sees no incentive in keeping his money in MickeyLand, since Interest Rates are low Duckling 1(from Nigeria) offers much better Interest Rates. Uncle Scrooge(U.S) shifts money to Nigeria NOTE : This is because MickeyLand ALLOWS FREE FLOW OF CAPITAL.
- 10. BACK IN MICKEYLAND(Scene 3) There is a shortage of Uncle Scrooge $ in MickeyLand and Mickeyland $ value depreciates in the World Market MickeyLand wanted FIXED EXCHANGE RATE, and it ‘buys back’ Uncle Scrooge $, increasing demand for it. Large amounts of MickeyLand $ are needed to convince Uncle Scrooge! This reduces liquidity in MickeyLand $ Liquidity reduces Interest Rates Rise!
- 11. WHAT IF…..(Scene 4) MickeyLand decided that they can control everything by imposing Capital Controls Uncle Scrooge is prohibited from Capital Transfer into Nigeria However there is Mr. UnniKrishnan (UK), who wants to invest in MickeyLand but is a victim of the Prohibition Capital Flow Controls cause fluctuations in Import and Export and MickeyLand suffers.
- 12. IN A NUTSHELL……. If interest rates were lowered to boost the economy, capital would leave the country to get a better return
- 13. EXAMPLES… Independent Monetary Policy Free Capital Flow Fixed Exchange Rate IrelandU.S China
- 14. Asian Financial Crisis: Trinity explained Marked by Fixed exchange rates, Free Capital Flows and High Interest rates Growth of economic bubble fueled by hot money which was expensive, high short term interest rates Large private current account deficits led to higher debts to GDP External shocks culminated in increase of US interest rates which led to outflow of capital Raise of US dollar made the pegged currencies strong and less competitive in global markets, higher Current Account deficit Governments in return increased interest rates. Reserves couldn’t sustain it and led to floating Aftereffects: This led much of the developing world to abandon fixed exchange rates The western institutions no more frown modest capital controls Asian countries built up large reserves as contingency for future
- 15. INDIAN SCENARIO Gradual financial liberalization, first domestic, then foreign „More market-determined exchange rate system and current account convertibility „Slow and incomplete capital account liberalization: “Complex, discretionary and fragmented” controls „De facto liberalization – increased capital flows „onduct
- 16. 2 = aMI+ bES+ cKO+ ε
- 17. RBI’S RESPONSE