Article Review Paper

1029 Words5 Pages
After searching through the textbook, Macroeconomics: Principles for a Changing World, one topic that stuck out was Chapter 11, "Saving, Investment, and the Financial System." Four articles on this topic are summarized below, then linked to the material learned in class. The articles chosen are "White paper explores merits of Bank of Canada creating a digital currency" by Ian Bickis, “Global M&A: What Has Happened and Where Next?” by Akshat Joshi, “Actually, Maybe China Shouldn't Open Up Just Yet” by Michael Pettis, and “Can Tech Tools Help Millennials Avoid A Looming Retirement Crisis?" by Morey Stettner. This group of articles relates to money and the system of finance.
In the first article, "White paper explores merits of Bank of
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The value of global deals has been decreasing after a peak in 2015. Also, the western part of the globe is currently trying to normalize their rates, with several headwinds impeding the process. Some countries are thought to be in secular stagnation, which is when the neutral real rate, involving long-run saving and investment for the loanable funds market, declines so much that the Central Bank can no longer attain it through usual methods.
This article applies to the section, "The Market for Loanable Funds." As factors like outlooks on economics, incentives on saving, government deficits, regulations, and expectations of businesses change, the supply and demand of loanable funds from the market also change. Because the quantity of loanable funds increases with higher real interest rates, the supply curve has a positive slope. Since the quantity of loanable funds decreases with higher real interest rates, the demand curve has a negative slope.
In the third article, "Actually, Maybe China Shouldn't Open Up Just Yet," Michael Pettis states that people believe that China's economy is failing, and that the best way to fix it is to bolster markets' roles, free money, and free up the financial system, as a ninety percent increase in debt has caused people to become fearful of a possible financial crisis. Pettis lists several flaws with this logic. Since the government has the ability to restructure the liabilities of banking sectors whenever they
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