Macroeconomics Essay Examples - Free Research Paper Topics on StudyDriver.com

How does Demand Reversal Invalidates the Theory of Hecksher-Ohlin Theorem

The modern theory of international trade Figure 1. 1 DEMAND REVERSAL Country A produces at point A, specializing in the production of steel, it consumes at point D, given the utility pattern represented by the indifference curve (IC a). This means that country A exports EA amount and import ED amount of steel. Therefore country A which is a capital surplus country is exporting labour intensive goods (cloth) and importing capital intensive goods (steel). This is in direct conflict with […]

Performance of Pakistan Banking Sector

Banking industry begins to show signs of slowdown After witnessing a strong growth during last few years, the banking industry has now started showing signs of slowdown, as deposits, assets, investment and profitability of banking sector is on decline while credit risk, market risk, interest risk, NPLs and advances are widening. According to the assessment of the State Bank of Pakistan’s Quarterly Performance Review of the Banking System (July-September 2008), released on Thursday, due to deteriorating macroeconomic factors the performance […]

Barter System

The Challenges of Barter System And How It Affects the Socio-Economy of a Country Remember back in school when kids would swap juice boxes for chips, or cookies for candy? Even children have an innate sense that the comparable value of cookies to candy is in the eye of the beholder. To the kid who gets cookies every day, the elusive cream-filled cake treat is worth more than a few, and he realizes his friend might feel differently. Trading goods […]

Concept of Consumption and Saving

THE CONCEPT OF CONSUMPTION AND SAVING. Consumption and savings are opposite by nature. The term consumption denotes expenditure and by savings we understand the act of preserving money for the future needs. Most of us are in the habit of meeting the present needs from our income. After that, if there remains anything, then only savings can be done. But in the long run, it is the savings that matters most. CONCEPT OF SAVING The concept of saving is important in […]

Capital Account Convertibility

Capital Account Convertibility. Should India adopt full convertibility? Capital Account Convertibility-or a floating exchange rate-is a feature of a nation’s financial regime that centers around the ability to conduct transactions of local financial assets into foreign financial assets freely and at market determined exchange rates. It is sometimes referred to as Capital Asset Liberation or CAC. CAC is mostly a guideline to changes of ownership in foreign or domestic financial assets and liabilities. Tangentially, it covers and extends the framework […]

Why have McDonald’s Sales been Declining?

Founded in the 1940s, McDonald’s has become the largest, the most successful and most well known fast-food chain in the world. When ranked amongst the rest of their industry competitors, McDonald’s are consistently ranked as the most valuable fast-food brand in the world as well as being in the top 10 of all the overall brands in the world . Achievements like this highlight the enormity of the firm when they are ranked amongst the likes of Apple, Google and […]

Limitations to the Law of Negligence

Discuss the effectiveness of the limitations that the law of negligence has imposed concerning the internalization of the costs of accidents The internalizing of the external costs associated with the consequences of negligent acts is a difficult proposition for academics, the courts, and government authorities. From the primary perspective of motor vehicle accidents, this paper examines the uneven internalisation of external accident costs obtained through the use of various negligence law tools in contrast with broader economic principles. All references […]

Factors Governing Cash Reserves

Each day we are involved in a number of transactions that involve trading, exchanging, buying, selling, receiving and spending, that are centred around money or other forms of currency . Finance is the spine of the present day economy, and the banks act as the branches of the same. The term ‘bank’ finds its roots in Italy and France and has several functions to perform. Apart from the traditional functions of dealing in money by accepting deposits and advancing loans, […]

Understand the Impact of Macroeconomic Factor

The impact of globalization has caused the transfers of funds and investment activities to be no longer limited in one country only. Those activities are now expanded to all over the world. Based on the stock valuation model, macroeconomic forces may have systematic influences on stock prices via their influences on expected discounted future cash flows. Study by Nil Gunsel and Sadik Cukur et al, (2007) the relations between them may be motivated using the arbitrage pricing theory (APT) model […]

The Monetary Policy

Monetary Policy is the best available tool for the countries to averse the effect of any thing worse happen like financial crisis. Mr. Ben Bernanke, who is the President of the United States Federal Reserves, also announced a monetary policy to stabilize the biggest economy of the world. In order to write about the applicability of monetary policy in US, we must have a very good idea regarding the imposition of such policy. Obviously the current financial constrain is the […]

The Inverted Yield Curve and Stock Performance

The choice of stocks to invest in during a period of recession has gained importance once again since the global meltdown in 2008. Ideally individuals and fund managers should be able to predict a forthcoming recession and there should be some method of identifying stocks that do better in such periods. In USA, inverted yield curves have been used to predict downturns and some studies have shown that returns from large capitalization stocks are significantly higher than small stocks, during […]

The Large Movements of Volatility Spreading by the European Monetary Union

Over the last months, European Monetary Union (EMU) countries have experienced large movements in their spreads with an unrecorded degree of volatility. Academic research consensuses agree these movements haven’t been the result of the same causes over time; for instance, at the beginning of the crisis investors required higher premiums, making the market price of risk increase. There were a preference for few riskier assets, making sovereign securities the favorites at the expense of corporate bonds and other riskier assets; […]

The Effect on Global Financial Markets

Introduction The effect on global financial markets erupted in the beginning of 2008 and it still prevails round the globe. When I was in India during 2008, I still remember the stock market shooting up by 4000pts in a single day and fell by 3000 pts a week later. I want to give an example, For the entire week Mr. Mukesh Ambani was the richest man in the world. This was caused due to the increase in supply of money. […]

The Connection between Macroeconomic Variables and Stock Price

Over the past few decades, the connection between macroeconomic variables and the movement of stock prices has been a subject of interest among academics and researchers. It is often argued that stock prices are determined by some fundamental macroeconomic variables such as interest rate (Base Lending Rate, BRL), exchange rate, inflation (Consumer Price Index, CPI), industrial production index and money supply (M2). In fact, investors generally believe that macroeconomic events have a large influence on the volatility of the stock […]

Tax Income Payers

TAX CUT POLICY ON PUBLIC DEBT Tax cut policy is reducing the rate of tax imposed by government. According to the economic theory, the immediate effect of tax cut is reducing real income that the government gets and increasing the real income of people whose tax rate was lowered. In the long run, there may be a reverse in effect on government income which depends on response of tax payers. Depending on the tax rate that was originally charged, a […]

Relationship between Stocks Return and Rate of Inflation

The effect of inflation on the returns to financial assets has been an important issue for many years. Due to the occurrence of high rates of inflation in Pakistan, this effect is now of considerable practical importance. Inflation is one of the most influential macroeconomic variables, which has negative impact on economic activities. It is important for an investor to be aware of the effects of inflation because if it gets out of hand, the plans may go down. In […]

Inter-Market Arbitrage

Finance 1 Inter-Market Arbitrage The question posed is to examine whether a trader with $1 million can profit from inter-market arbitrage. The following facts are available: – New York Citibank: $ 1.2223/ London Barclays Bank:$ 1.8457/A£ Frankfurt Deutsche Bank: 1.5100/A£ To resolve the question, the commencement of the process is to begin with calculating the a cross rate, which is arrived at by calculating the ratio of the exchange rate of currency A to the dollar divided by the exchange […]

How Central Banks Control Money

How Central Banks Control Money Definition of Money Supply: The whole supply of coin and other fluid instruments in a nation’s economy. The money supply may incorporate money, coins and parities held in checking and investment accounts. Financial specialists investigate the cash supply and make arrangements flowing around it through controlling premium rates and expanding or diminishing the measure of cash streaming in the economy. Money supply information is gathered, recorded and distributed occasionally, ordinarily by the national bank and the […]

How Can Financial Crisis Defined?

Financial crisis can be defined as a considerable decrease in economic activity extended across the economy, which lasts for a significant amount of time, visible in real GDP growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale-retail sales, we have already seen such a situation at the time of great depression earlier and now since 2007, What was different in the two crisis was the later one was the first one since globalisation, What that meant was that […]

Granger Causality Analysis Based on Chinas Inflation Analysis

Financial sector in the formation of the reasons for inflation has been, and there is no consensus. Keynesian view that the real economy is highly unstable, the labor market is the root of inflation, and thus derive the famous Phillips curve, monetary school believes that inflation is essentially a monetary phenomenon, while the market is essentially stable, no need for government to artificially adjust. The use of macroeconomic policies, inflation, structure, school tried to economic productivity of various departments to […]

Financial Markets and the Economy

In Greece the government dept and the money owed to pension funds, summing up to 1,2 trillion was becoming a huge burden . All the national services were running on a deficit and they were showing great inefficiency. In addition to this, corruption was obvious in every sector and tax evasion was more than a common practice. Generally Greek banks followed a very conservative strategy and did not invested in high yield assets nor did they get involved in the […]

Economists Asset Market

Literature Review There have been different views between Economists and financial market participants upon the valuation of an asset. Economists believe that the price of an asset should reflect the fundamental value given the assumption of rational behavior and of rational expectations. On the other hand, financial market participants believe that the fundamental value is part of the asset price. Thus, Markets participate will interpret a positive price volatility as the herd behavior. However in the past they were unable […]

The Effects of the Credit Crunch

International Stock Markets Introduction The objective of this document is to gain an understanding of the effect that the credit crunch has had on international stock markets, what the different governments have done or are planning to do to alleviate this problem and the elements that precipitated such a crisis. Therefore in the document the author first begins by defining the credit crunch and the current situation. Then in the next section the author goes on to analyze the effects […]

Global Financial Crisis Example for Free

The termA financial crisisA is applied to a variety of situations in which some financial institutions suddenly lose a large part of their value of assets. A financial crisis is generally known as Recession. In the 19th and early 20th centuries, many financial crises were associated withA banking panics, and manyA recessionsA coincided with these panics. Other situations that are often called financial crises includeA stock market crashesA and the bursting of other financialA bubbles,A currency crises, andA sovereign defaults.A […]

Can the Present System be Defended Example for Free

Whether or not the current financial system is preferred to gold standard or whether or not gold standard is a solution for financial crisis is actually subjective. Before going into detail discussion on this, we must first examine the factors of financial crisis and later see whether these factors are related or dependent on the current financial system, and to what degree it affects the financial crisis. Financial crisis for each country are distinct but among the main common case […]

Valued Historical Cost Example for Free

It is a system of accounting which is based on the principle that assets should be valued at historical cost or historical cost is the original monetary value of an economic item. Historical cost is based on the stable measuring unit assumption. In some circumstances, assets and liabilities may be shown at their historical cost, as if there had been no change in value since the date of acquisition. The balance sheet value of the item may therefore differ from […]

An Analysis of the Arbitrage Pricing Theory

The Arbitrage Pricing Theory (APT) was developed primarily by Ross (1976a, 1976b). Indeed, it is a one-period model in which every investor believes that the stochastic properties of returns of capital assets are consistent with a factor structure. The basis of arbitrage pricing theory is the idea that the price of a security is driven by a number of factors. These can be divided into two groups: macro factors, and company specific factors. The name of the theory comes from […]

KPIs and PRP as the Drive in Organisations

With the use of at least two detailed examples critically examine the view that organisational targets, Key Performance Indicators (KPI’s) and Performance Related Pay (PRP) are the modern engines that drive the ‘assembly lines’ of many contemporary organisations When approaching this topic it is clearly important to have the correct and concise knowledge of just what Taylorism and Fordism are and how intrinsically important they were and are within the confines of the industrial revolution and modern business today. Many […]

Providing a Clear View for Business Structure

In the influential article written by Mr. Robert Solow in the year 1956, a structure was given for the readers to have a clear view of the linkage between economic growth and the basic important factors of production. He suggested ways in which maximum economic growth is easily achievable through his dynamic state of the art framework. Mr. Robert Solow’s model named as the growth accounting framework, includes two factors; physical capital and labor precisely, whereas technological change being the […]

Is Low Inflation Desirable and Sustainable?

Is low inflation desirable and sustainable? Introduction In business, financial and political circles, inflation is one of the most commonly discussed economic subjects, with arguments regarding the optimum levels appropriate for national and international economies. From the research available, it would appear that the majority of experts, including banking executives, agree that low inflation provides the preferred economic environment (Griffiths and Wall, 2004). The intention of this paper is to ascertain the validity of this position and whether, if it […]

Macroeconomics Essays