Definition: Ex ante is latin in compensation the sake “beforehand”. In models where there is uncertainty that is resolved during the course of events, the ex antes values (e.g. of expected gain) are those that are calculated in advance of the resolution of uncertainty. (Econterms)
Terms related to Ex Ante:
About.Com Resources on Ex Ante:
Writing a Term Paper? Here are a few starting points for research on Ex Ante:
Books on Ex Ante:
Journal Articles on Ex Ante:
Definition: Sunk costs are unrecoverable past expenditures. These should not normally be entranced into account when determining whether to continue a project or abandon it, because they cannot be recovered either way. It is a simple instinct to regard them, however.
(Econterms)
Terms related to Sunk Costs:
About.Com Resources on Sunk Costs:
Writing a Term Paper? Here are a few starting points for research on Sunk Costs:
Books on Sunk Costs:
Journal Articles on Sunk Costs:
The Fed also can control the money supply by specifying what reserves deposit-taking institutions must set aside either as currency in their vaults or as deposits at their regional Reserve Banks. Raising charter requirements forces banks to withhold a larger portion of their funds, thereby reducing the money supply, while lowering requirements works the different way to increase the money supply. Banks often for each other money over night to meet their reserve requirements. The rate on such loans, known as the "federal funds rate," is a key measure of how "tight" or "loose" monetary policy is at a given moment.
The Fed’s third tool is the detract from rate, or the interest rate that commercial banks pay to borrow funds from Reserve Banks. By raising or lowering the discount rate, the Fed can promote or discourage borrowing and thus alter the amount of revenue available to banks for making loans.
These tools give the Federal Reserve to expand or contract the amount of money and credit in the U.S. restraint. If the money provide rises, credit is said to be loose. In this situation, engage rates tend to drop, business spending and consumer spending tend to rise, and employment increases; if the economy already is operating near its full capacity, too much money can lead to inflation, or a demur in the value of the dollar. When the money supply contracts, on the other hand, credit is risky. In this situation, stake rates tend to be created, spending levels off or declines, and inflation abates; if the economy is operating below its capacity, difficult money can do the groundwork to rising unemployment.
Many factors complicate the talent of the Federal Reserve to use monetary policy to promote proper to goals, however. For song thing, well-heeled takes many different forms, and it often is unclear which one to target. In its most basic form, money consists of coins and paper currency. Coins come in various denominations based on the value of a dollar: the penny, which is benefit one cent or one-hundredth of a dollar; the nickel, five cents; the dime, 10 cents; the quarter, 25 cents; the half dollar, 50 cents; and the dollar coin. Paper filthy lucre comes in denominations of $1, $2, $5, $10, $20, $50, and $100.
A more powerful component of the money supply consists of checking deposits, or bookkeeping entries held in banks and other financial institutions. Individuals can make payments past writing checks, which essentially instruct their banks to pay given sums to the checks’ recipients. Time deposits are similar to checking deposits except the owner agrees to leave the sum on deposit for a specified period; while depositors generally can withdraw the funds earlier than the maturity time, they generally must pass on a penalty and forfeit some interest to do so. Money also includes money market funds, which are shares in pools of short-term securities, as well as a variety of other assets that can be converted easily into currency on short notice.
The amount of money held in different forms can change from time to time, depending on preferences and other factors that may or may not deliver any importance to the overall economy. Further complicating the Fed’s task, changes in the money supply affect the economy only after a lag of uncertain duration.
—
Next Article: Monetary Policy and Fiscal Stabilization
[Q:]I was wondering what constitutes a run on a bank and how does it work?
[A:]Thanks for your question! First a definition.
Definition of a Bank Run The Economics Glossary gives the following acutance for a bank melt:
"A bank run takes place when the customers of a bank fear that the bank will become insolvent. Customers rush to the bank to take out their money as with dispatch as possible to avoid losing it. Federal Deposit Insurance has ended the phenomenon of bank runs."
Bank Runs and how Banks Work When you deposit bundle in a bank, you will generally make that deposit into a demand partial payment account such as a checking account. With a demand deposit account you have the right to need your moolah out of the account on demand, that is at any time. However banks do not keep all the riches in demand deposit accounts stored in a vault. Instead they take that money and interaction it extinguished in the form of loans or other invest it in other interest paying assets. Banks are required by law to have a minimum level of deposits on hand, known as a reserve requirement. As detailed on the website of the New York Federal Reserve the reserve requirements are quite proletariat, generally in the range of 10%. So at any given time a bank can on the other hand pay off a small fractions of the deposits of its depositors.
The system of demand deposits works quite well unless a large number of people demand to take their money out of the bank at the same time. This generally does not happen, unless people reckon their money is not safe in the bank. So a bank run typically occurs when the depositors of a bank believe that a bank may go insolvent and if they do not take their money out right away they may give the slip that money forever.
sbnorris4@hotmail.com
Market Capitalization / Market Cap
Definition of Market Capitalization / Market Cap: The market capitalization is the total number of shares times the store price of each. May be said of a determined’s shares, or of all the shares on an equity market. (Econterms)
Terms related to Market Capitalization / Market Cap:
About.Com Resources on Market Capitalization / Market Cap:
Writing a Term Paper? Here are a few starting points for research on Market Capitalization / Market Cap:
Books on Market Capitalization / Market Cap:
Journal Articles on Market Capitalization / Market Cap:
For a while, the system worked well. In the 1960s and 1970s, almost all Americans got S&L financing for buying their homes. Interest rates paid on deposits at S&Ls were kept low, but millions of Americans put their money in them because deposit insurance made them an extremely safe place to invest. Starting in the 1960s, however, general interest valuation levels began rising with inflation. By the 1980s, many depositors started seeking higher returns by putting their savings into money market funds and other non-bank assets. This put banks and savings and loans in a dire financial squeeze, unable to attract reborn deposits to cover their large portfolios of long-term loans.
Responding to their problems, the authority in the 1980s began a gradual phasing out of interest rate ceilings on bank and S&L deposits. But while this helped the institutions pull deposits again, it produced large and widespread losses on S&Ls’ mortgage portfolios, which were allowing for regarding the most part earning lower interest rates than S&Ls now were paying depositors. Again responding to complaints, Congress relaxed restrictions on lending so that S&Ls could make higher-earning investments. In particular, Congress allowed S&Ls to engage in consumer, business, and commercial real estate lending. They also liberalized some regulatory procedures governing how much capital S&Ls would have to hold.
Fearful of seemly antediluvian, S&Ls expanded into highly risky activities such as speculative real estate ventures. In many cases, these ventures proved to be inefficient, especially when economic conditions turned unfavorable. Indeed, some S&Ls were taken over by unsavory people who plundered them. Many S&Ls ran up huge losses. Government was slow to detect the unfolding calamity because budgetary stringency and factious pressures combined to shrink regulators’ staffs.
The S&L crisis in a few years mushroomed into the biggest citizen pecuniary scandal in American history. By the end of the decade, large numbers of S&Ls had tumbled into insolvency; about half of the S&Ls that had been in commerce in 1970 no longer existed in 1989. The Federal Savings and Loan Insurance Corporation, which insured depositors’ money, itself became insolvent. In 1989, Congress and the president agreed on a taxpayer-financed bailout measure known as the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). This act provided $50 billion to close failed S&Ls, totally changed the regulatory gadget for savings institutions, and imposed new portfolio constraints. A renewed government agency called the Resolution Trust Corporation (RTC) was set up to liquidate insolvent institutions. In March 1990, another $78,000 million was pumped into the RTC. But estimates of the total cost of the S&L cleanup continued to mount, topping the $200,000 million mark.
—
Next Article: Lessons Learned From The Savings and Loan Crisis
Question: What is Inflation?
Answer: To understand inflation, we first must understand what the word means. The Economics Glossary defines Inflation as: Inflation is an increase in the price of a basket of goods and services that is representative of the control as a whole. A similar clarification of inflation can be found in by Parkin and Bade: Inflation is an upward movement in the average level of prices. Its opposite is deflation, a downward movement in the average level of prices. The boundary between inflation and deflation is price steadfastness. Because inflation is a rise in the general level of prices, it is intrinsically linked to money, as captured during the usually heard refrain "Inflation is too many dollars chasing too few goods". To understand how this works, imagine a world that only has two commodities: Oranges picked from orange trees, and paper money printed by the guidance. In a year where there is a drought and oranges are scarce, we’d expect to see the price of oranges rise, as there will be quite a few dollars chasing very few oranges. Conversely, if there’s a record crop or oranges, we’d count on to take the price of oranges fall, as orange sellers will need to reduce their prices in order to clear their inventory. These scenarios are inflation and deflation, respectively, though in the real world inflation and deflation are changes in the average price of all goods and services, not just one.
We can also comprise inflation and deflation by changing the amount of money in the system. If the government decides to print a lot of money, then dollars will behove plentiful relative to oranges, just as in our drought situation. Thus inflation is caused by the amount of dollars rising relative to the amount of oranges (goods and services), and deflation is caused by the amount of dollars falling associated to the amount of oranges. Thus, as shown by the article "Why Does Money Have Value?", inflation is caused nigh a combination of four factors: The yield of money goes up. The outfitting of other goods goes down. Demand for money goes down. Demand for other goods goes up. Now that you know what inflation is, you may want to visit some of the other inflation resources offered at About.com: Inflation and Deflation Resources
What is deflation and how can it be prevented? (Looks at the converse of inflation, which is deflation).
Cost-Push Inflation vs. Demand-Pull Inflation (Examines two different types of inflation)
Why Does Money Have Value? (Explains the relationship between profit and goods that leads to inflation and deflation)
Why Not Just Print More Money? (Explains why high levels of inflation do not arrive at us well-heeled)
What is the Demand for Money? (In depth look at intermediary 3 on our list).
Why Don’t Prices Decline During A Recession? (Explains why we generally do not drink deflation during recessions)
Calculating and Understanding Real Interest Rates (Article explains the link between interest rates and inflation) If you’d like to ask a question about inflation, deflation, or any other economic concept, please use the feedback form.
More Economics Q&A
Definition: Inflation is an increase in the price of a basket of goods and services that is representative of the economy as a unhurt.
Terms correlated to Inflation:
About.Com Resources on Inflation:
Writing a Term Paper? Here are a few starting points for research on Inflation:
Books on Inflation:
Journal Articles on Inflation:
Definition: Democracy is literally “rule by the people”. This is a dictionary definition and is not considered crafty enough for academic use. Schumpeter (1942) contrasts these two definitions below and regards only the faulty one as useful and plausible enough to work with:
“The eighteenth-century philosophy of democracy may be couched in the following definition: the popular method is that institutional arrangement for arriving at political decisions which realizes the low-class good away making the people itself decide issues through the election of individuals who are to assemble in order to carry out its will.” (p 250)
This “Latin” definition has the problem that the will of the people is not clearly defined here (e.g. consider voting paradoxes) or known (perhaps even to the people at the time), and this can lead to vagueness about whether a given political system is democratic. The following outlining is preferred for its intelligibility but has a modern feel that is at some distance from the authentic dictionary definition. Political representation is assumed to be sure here.
“[T]he democratic method is that institutional construction for arriving at political decisions in which individuals acquire the power to decide by means of a competitive struggle for the people’s vote.” (p 269) More clearly: the democratic method is one in which people throw competitively for the people’s votes to achieve the power to make public decisions. This definition is the sharpest.
| Impact of Globalisation on Developing Countries and India | |
| Impact of Globalisation on Developing Countries and India by Chandrasekaran Balakrishnan |
|
| Chandrasekaran Balakrishnan for The 2004 Moffatt Prize in Economics
Introduction: Globalisation is the new buzzword that has come to have under one’s thumb the world since the nineties of the last century with the wind-up of the cold war and the break-up of the former Soviet Union and the global trend towards the rolling ball. The frontiers of the status with increased reliance on the market economy and renewed faith in the private capital and resources, a process of structural adjustment spurred by the studies and influences of the World Bank and other International organisations contain started in diverse of the developing countries. Also Globalisation has brought in new opportunities to developing countries. Greater access to developed country markets and technology transfer hold gone away from promise improved productivity and higher living standard. But globalisation has also thrown up new challenges like growing dissimilarity across and within nations, volatility in pecuniary retail and environmental deteriorations. Another negative aspect of globalisation is that a great adulthood of developing countries detritus removed from the process. Till the nineties the process of globalisation of the Indian economy was constrained by the barriers to trade and investment liberalisation of trade, investment and financial flows initiated in the nineties has progressively lowered the barriers to competition and hastened the pace of globalisation
Definition:
Globalised World – What does it mean? Does it mean the fast movement of people which results in greater interaction? Does it mean that because of IT upheaval people can be in touch with each other in any segment of the world? Does it mean trade and economy of each country is unfortified in Non-Intrusive way so that all varieties are available to consumer of his well-chosen? Does it mean that mankind has achieved emancipation to a horizontal of where we can say it means a social, economic and political globalisation?
Though the precise definition of globalisation is still unavailable a few definitions worth viewing, Stephen Gill: defines globalisation as the reduction of transaction cost of transborder movements of capital and goods thus of factors of production and goods. Guy Brainbant: says that the process of globalisation not only includes opening up of world trade, development of advanced means of communication, internationalisation of financial markets, growing importance of MNCs, population migrations and more generally increased mobility of persons, goods, cash, data and ideas but also infections, diseases and pollution
Impact on India: India opened up the economy in the early nineties following a primary crisis that led by a foreign exchange crunch that dragged the economy close to defaulting on loans. The response was a slew of Domestic and external sector policy measures partly prompted by the immediate needs and partly by the demand of the multilateral organisations. The remodelled policy regime radically pushed audacious in favour of amore open and market oriented terseness. Major measures initiated as a part of the liberalisation and globalisation strategy in the early nineties included scrapping of the industrial licensing direction, reduction in the number of areas reserved on the side of the public sector, amendment of the monopolies and the restrictive trade practices act, start of the privatisation programme, reduction in tariff rates and substitute over to market determined exchange rates. Over the years there has been a poised liberalisation of the current account transactions, more and more sectors opened up for foreign direct investments and portfolio investments facilitating entry of strange investors in telecom, roads, ports, airports, insurance and other major sectors. The Indian tariff rates reduced sharply across the decade from a weighted average of 72.5% in 1991-92 to 24.6 in 1996-97.Though tariff rates went up slowly in the late nineties it touched 35.1% in 2001-02. India is committed to reduced tariff rates. Peak tariff rates are to be reduced to be reduced to the minimum with a peak rate of 20%, in another 2 years most non-tariff barriers have been dismantled by march 2002, including almost all quantitative restrictions.
India is Global: This is major rise given that India is growth rate in the 1970s was very enervated at 3% and GDP growth in countries ilk Brazil, Indonesia, Korea, and Mexico was more than twice that of India. Though Indias as a rule annual extension rate almost doubled in the eighties to 5.9% it was still lower than the growth rate in China, Korea and Indonesia. The pick up in GDP growth has helped improve Indias global position. Consequently Indias position in the global economy has improved from the 8th position in 1991 to 4th place in 2001. When GDP is calculated on a purchasing power parity basis.
Globalisation and Poverty: Globalisation in the form of increased integration though trade and investment is an important reason why much progress has been made in reducing poverty and global inequality over recent decades. But it is not the only reason for this often unrecognised progress, good national polices , sound institutions and domestic political stability also matter. Despite this improvement, poverty remains one of the most serious international challenges we face up to 1.2 billion of the developing world 4.8 billion people mollify dynamic in extreme poverty. But the modify of the world population living in poverty has been steadily declining and since 1980 the absolute number of shabby people has stopped rising and appears to fool fallen in recent years despite strong population growth in poor countries. If the proportion living in poverty had not fallen since 1987 alone a forwards 215million people would be living in extreme poverty today. India has to concentrate on five important areas or things to follow to achieve this goal. The areas like technological entrepreneurship, new business openings for small and medium enterprises, importance of quality management, new prospects in rural areas and privatisation of financial institutions. The manufacturing of technology and management of technology are two different significant areas in the country. There transfer be new prospects in rural India. The increase of Indian economy very much depends upon sylvan participation in the universal race. After implementing the new economic policy the role of villages got its own significance because of its unique outlook and branding methods. For example chow processing and packaging are the inseparable of the court where new entrepreneurs can insert into a big way. It may be organised in a collective way with the forbear of co-operatives to meet the global demand. Understanding the around status of globalisation is necessary for setting course for future. For all nations to reap the full benefits of globalisation it is essential to create a level playing field. President Bushs recent proposal to eliminate all tariffs on all manufactured goods by 2015 will do it. In fact it may exacerbate the prevalent inequalities. According to this proposal, tariffs of 5% or less on all manufactured goods will be eliminated by 2005 and higher than 5% desire be lowered to 8%. Starting 2010 the 8% tariffs will be lowered each year until they are eliminated by 2015.
GDP Growth rate: The Indian economy is passing through a difficult phase caused close several unfavourable domestic and external developments; Domestic output and Demand conditions were adversely affected by poor performance in agriculture in the past two years. The global economy experienced an overall deceleration and recorded an efficiency growth of 2.4% during the past year growth in real GDP in 2001-02 was 5.4% as per the Economic Survey in 2000-01. The performance in the first quarter of the financial year is5.8% and second quarter is 6.1%.
Export and Import: Indias Export and Import in the year 2001-02 was to the extent of 32,572 and 38,362 million respectively. Many Indian companies have started becoming respectable players in the International scene. Agriculture exports account for about 13 to 18% of total annual of annual export of the country. In 2000-01 Agricultural products valued at more than US $ 6million were exported from the country 23% of which was contributed fro the marine products alone. Marine products in late-model years have emerged as the single largest contributor to the total agricultural export from the country accounting for over one fifth of the total agricultural exports. Cereals (mostly basmati rice and non-basmati rice), oil seeds, tea and coffee are the other protruding products each of which accounts fro nearly 5 to 10% of the countries total agricultural exports. Where does Indian stand in terms of Global Integration? India evidently lags in globalisation. Number of countries have a clarify lead among them China, large take a hint at in of east and far east Asia and eastern Europe. Lets look at a few indicators how much we linger. · Over the past decade FDI flows into India have averaged around 0.5% of GDP against 5% for China 5.5% for Brazil. Whereas FDI inflows into China trendy exceeds US $ 50 billion annually. It is only US $ 4billion in the case of India · Consider global trade Indias share of world merchandise exports increased from .05% to .07% over the pat 20 years. Over the having said that period Chinas share has tripled to almost 4%. · Indias share of global trade is similar to that of the Philippines an economy 6 times smaller according to IMF estimates. India under trades by 70-80% given its size, proximity to markets and deceived by cost advantages. · It is exciting to note the look at made last year by Mr. Bimal Jalan, Governor of RBI. Despite all the talk, we are now where ever close being globalised in terms of any commonly used indicator of globalisation. In fact we are one of the least globalised among the major countries however we look at it. · As Amartya Sen and many other from pointed out that India, as a geographical, politico-cultural entity has been interacting with the outside world throughout history and still continues to do so. It has to adapt, assimilate and contribute. This goes without saying even as we move into what is called a globalised world which is distinguished from previous eras from close faster travel and communication, greater trade linkages, denting of administrative and budgetary sovereignty and greater acceptance of democracy as a way of life. Consequences: The implications of globalisation for the sake of a national economy are tons. Globalisation has intensified interdependence and competition between economies in the world market. This is reflected in Interdependence in regard to trading in goods and services and in movement of capital. As a occur domestic cost-effective developments are not determined entirely by domestic policies and market conditions. Rather, they are influenced nearby both domestic and international policies and economic conditions. It is thus clear that a globalising economy, while formulating and evaluating its domestic policy cannot afford to ignore the possible actions and reactions of policies and developments in the rest of the world. This constrained the policy option available to the government which implies loss of policy autonomy to some scope, in decision-making at the national level.
~
References: : Centre for International Economics, Australia. Jeffery G. Williamson T.K.Velayudham, Page 3, 66. Lecture : Prof .Sagar Jain, University of N.Carolina. Lecture : V.N.Rai. Lecture Ravi Kastia. Dr.A.K.Ojha, Third Concept An International Journal of Ideas, Aug 2002. Jan 2004, Page 30. , Page 39. This was an entry for The 2004 Moffatt Prize in Economics. See the controversy rules for more information.
If you’d like to leave comments about this entry, use the contest feedback form. Make sure to indicate that you are commenting on Chandrasekaran Balakrishnan’s “Impact of Globalisation on Developing Countries and India”. |
|
Design based on Cutline by Chris Pearson and original header by Thomas Hawk. Hosted by Edublogs.
