Macro-Economic Policy. Examine The Aims And Policy Objectives

Monetary Policy is the procedure by which the financial expert of a nation, similar to the national bank or cash board, controls the supply of money. Regularly focusing on a inflation rate or interest rate to guarantee value solidness and general trust in

In the views of the politicians, the economy was not one of a ‘Golden Age’. As the British Cabinet Paper wrote, ‘It is clear that ever since the end of the war we have tried to do too much…we have only rarely been free from danger of economic crisis’. This illustrates the fact that although the economy was not falling apart, it was not stable and not prosperous. There was also a lack of a plan to deal with the economy; the government merely adjusted the system as it went along, which sometimes resulted in high rises of inflation or sudden consumer booms that did not correlate with its ability to pay for them – causing a deficit.

Our economy is a machine that is ran by humans. A machine can only be as good as the person who makes it. This makes our economy susceptible to human error. A couple years ago the United States faced one of the greatest financial crisis since the Great Depression, which was the Great Recession. The Great Recession was a severe economic downturn that occurred in 2008 following the burst of the housing market. The government tried passing bills to see if anything would help it from becoming another Great Depression. Trying to aid the government was the Federal Reserve. The Federal Reserve went through a couple strategies in order to help the economy recover. The Federal Reserve provided three major strategies to start moving the economy in a better direction. The first strategy was primarily focused on the central bank’s role of the lender of last resort. The second strategy was meant to provide provision of liquidity directly to borrowers and investors in key credit markets. The last strategy was for the Federal Reserve to expand its open market operations to support the credit markets still working, as well as trying to push long term interest rates down. Since time has passed on since the Great Recession it has been a long road. In this essay we will take a time to reflect on these strategies to see how they helped.

This article analyzes the underlying causes of the current crisis, estimates how bad the crisis is likely to be, and discusses the government economic policies pursued so far (by both the

During 2007 through 2010 there existed what we commonly refer to as the subprime mortgage crisis. Through deduction of readings by those considered esteemed in the realm of finance - such as Ben Bernanke - the crisis arose out of an earlier expansion of mortgage credit. This included extending mortgages to borrowers who previously would have had difficulty getting mortgages; this both contributed to and was facilitated by rapidly rising home prices. Pre-subprime mortgages, those looking to buy homes found it difficult to obtain mortgages if they had below average credit histories, provided small down payments or sought high-payment loans without the collateral, income, and/or credit history to match with their mortgage request. Indeed some high-risk families could obtain small-sized mortgages backed by the Federal Housing Administration (FHA), otherwise, those facing limited credit options, rented. Because of these processes, home ownership fluctuated around 65 percent, mortgage foreclosure rates were low, and home construction and house prices mainly reflected swings in mortgage interest rates and income.

For this in-depth interview, I have selected my father, James Trainor as the ideal candidate to provide a comprehensive recount of the global economic climate during the 2008 Global Financial Crisis (GFC). And how his experiences of economic fluctuations and policies during the GFC changed his perspectives and understandings of macroeconomic decisions, as well as their effects on the modern world. At the time of the Global Financial Crisis, James was the Global Head of Employment Tax for the Macquarie Group, one of Australia’s largest investment banking institutions. Fortunately, James retained his position at Macquarie throughout the GFC. This allowed him to see first-hand the economic climate

effectively encouraged frivolous spending and heavy borrowing allowing people to live beyond their means. Low interest rates also increased the discount value of assets and therefore increased their value. This created a house price boom in the UK and US. It was in the US that this twined with high levels of borrowing created the subprime lending market, whereby individuals with poor or no credit history borrowed vast subs of money to buy

Is it possible therefore that the Conservative discourse of rebalancing actually contradicts the mutually beneficial relationship between austerity and financialisation that appears to have been at the heart of the coalition and Conservative governments’ economic policy agenda? This chapter argues not. The extent to which the public discourse on rebalancing actually propels economic policy-making in practice can of course be questioned (as with the discourse around austerity). Yet the chapter’s principal objection to the possibility that rebalancing contradicts austerity and financialisation by endorsing the notion of a finance-induced decline is that rebalancing discourse actually stops well short of endorsing the view that the UK economy (and the way it is governed), or any of its component sectors, is fundamentally flawed. The industrial and regional policy agenda to which it appears to have given rise offers little threat to the key elements of the pre-crisis growth model. Indeed, parts of this agenda constitute integral elements of the elite politics of austerity, insofar as austerity heralds an adjustment to the aspects of the pre-crisis growth model deemed most problematic, rather than its wholesale replacement. The chapter begins by documenting examples of coalition and Conservative rhetoric on rebalancing, and exploring its relationship with austerity. It then focuses consecutively on the most important dimensions of economic rebalancing, as espoused by policy elites in the post-crisis period; firstly, industrial policy, and secondly, devolution to

Monetary policy uses changes in the quantity of money to alter interest rates, which in turn affect the level of overall spending . “The object of monetary policy is to influence the nation’s economic performance, as measured by inflation”, the employment rate and the gross domestic product, an aggregate measure of economic output. Monetary policy is controlled by

UK government was very swift in its response the financial crisis. Various measures were taken to address the economic anomaly that came with the crisis. These range from various monetary policies to fiscal policies. Some of these policies are discussed below:

The “Great Recession” is commonly used to explain the massive economic contraction that occurred in the United States during the fourth quarter of 2007. However, the actions of the United States spanned to other nations, leaving massive effect on the global economy. One nation that took on serious financial burden during this recession was the United Kingdom. This nation first faced the effects of the Great Recession beginning in the first quarter of 2008. Overall, the initial mass effects on the nation can be attributed to the nation’s reliance on the financial sector. In fact, after partially stabilizing in 2009, the country struggled with a double-dip recession between 2010-12, and continues to struggle with some of these effects.

Since the global financial crisis of 2008, the UK government has been implementing various policies to combat the recession and stimulate economic growth. This essay will look at how effective the fiscal and monetary policies used since the crisis are in achieving the four-macro economic objectives. In addition, I will provide my input on the best way the UK government can carry out these policies.

Monetary policy is the mechanism of a country’s monetary authority (usually the central bank) taking up measures to regulate the supply of money and the rates of interest. It involves controlling money in the economy to promote economic

The Performance of Bank of England and How the Outcomes Influenced by Policies and Objectives during the Financial Crisis in 2008

The global financial crisis of 2008-09 that spread contagiously across the globe has particularly hit the European economies hard, accentuating turmoil in the world financial markets and precipitating the European sovereign debt crisis almost instantaneously. This has consequently wiped away all of EU’s accomplishments in economic growth and job creation (European Commissiona 2010:3). Statistics published subsequently exposed the magnitude of the crisis: real GDP contracted by 4%, unemployment soared at an unprecedented level, deterioration of public finances, and the fragmentation of social cohesion in the EU (Eurostat 2010). The