Is A Peg Exchange Rate Regime Is The Loss Of Control Over...

One prominent criticism of adopting a peg exchange rate regime is the loss of control over monetary policy. The simultaneous combination of a fixed exchange rate regime and open capital markets with an independent monetary policy constitutes the Impossible Trinity. If the exchange rate is pegged and capital is mobile, then the domestic nominal interest rate must equal the foreign nominal interest rate. Lack of effective local monetary policy is harmful, especially when a country is hit by domestic shocks which are not correlated with business cycles in the anchor country. A domestic monetary policy is a plus, but the existence of an independent monetary policy does not guarantee its proper performance. Developing countries usually do†¦show more content†¦Three historical examples of the Bretton Woods system in the 1970s, the successful attacks under the European Monetary System in 1992 and 1993 and the emerging market crises of 1994-2000 prove that the fragility of a peg exc hange rate is more severe under an open capital market (Obstfeld and Rogoff, 1995). Another challenge in a fixed exchange rate regime, after choosing the right anchor, is pegging to the right rate. The risk of being locked into a misaligned exchange rate is a disadvantage of a fixed exchange rate regime. The equilibrium exchange rate -- an exchange rate based on the fundamentals -- is the efficient rate. Any divergence from this rate and insisting on the wrong exchange rate is damaging. This is not the case in a floating exchange rate regime where the exchange rate is not locked. However, even in a floating exchange rate regime, there is a possibility of being far from the equilibrium exchange rate for some time. In a fixed exchange rate regime, especially if the trade of a country is concentrated with those major currencies, the cross-rate fluctuation (the fluctuations of the anchor currency against other major currencies) is another severe flaw. For example, the Persian Gulf oil e xporting countries follow a peg exchange rate to the US dollar and have most of their trade with Europe and Japan. In 1997, the appreciation of the US dollarShow MoreRelatedBritish Exit, An Abbreviation For A Brexit† Which Means1491 Words   |  6 Pagesleast level in decades. 52 % of the British electorate voted to leave, while forty eight per cent chose to remain. With more than 20 million people voting, turnout was 71.8. One of the major concerns paving the way to the referendum was boundary control – recapturing nation s capacity to choose who comes into the nation, how, who can work, and so forth. A Hard Brexit declined to bargain on major EU issues, for example, the open movement of citizens leaving the sole economy totally, and exchangingRead MoreExchange Rate Policy in Bangladesh: a Review of Key Concepts and Issues6293 Words   |  26 PagesExchange Rate Policy in Bangladesh: A Review of Key Concepts and Issues ----------------------------------------------------- In an open and deregulated economic environment, exchange rates can play an important role in macroeconomic management for stability and growth. The increasing role of exchange rates since the early 1970s has indeed been a break from the Bretton Woods tradition of the 1950s and 1960s that assigned a limited role for exchange rates in economic affairs. However, the bankingRead MoreMexican Devaluation Of The Mexican Peso Crisis Essay1412 Words   |  6 Pagesargument has been whether sound monetary, fiscal and exchange rate policies could have prevented the crisis or foreign intervention was inviable to control the crisis because of the effect to the global community. The purpose of this paper is to show that it was the policies of the Mexican government that caused the devaluation of the peso and thus the ensuing Mexican Peso Crisis. The 1994 Mexican Peso Crisis was a relatively short crisis. The economic policies of the Mexican government needsRead MoreExchange Rate Systems3842 Words   |  16 PagesChapter 5 Exchange Rate Systems questions 1. How can you quantify currency risk in a floating exchange rate system? Answer: To characterize the risk of a currency position, you must try to characterize the conditional distribution of the future exchange rate changes. With floating exchange rates, historical information provides useful information about this distribution. For example, you can use data to measure the average historical dispersion (standard deviation or volatility)Read MoreMultinational Business Finance Chatper One Qestion Answer2218 Words   |  9 Pages CHAPTER 2: THE INTERNATIONAL MONETARY SYSTEM 1. The gold standard and the money supply. Under the gold standard all national governments promised to follow the â€Å"rules of the game†. This meant defending a fixed exchange rate. What did this promise imply about a country’s money supply? A country’s money supply was limited to the amount of gold held by its central bank or treasury. For example, if a country had 1,000,000 ounces of gold and its fixed rate of exchange was 100 local currency units perRead MoreWorld Economy Individual Assignment :1022 Words   |  5 Pagesinterest rates and fluctuating growths in 1990’s, Turkey launched a new disinflation program in 1999. This new disinflation program, which was backed by IMF, aimed to decrease the inflation to single digit rates at the end of 2002 and intended to increase the public-sector primary balance to %3,7 at the end of 2000 (Yeldan September 2001). Inflation rate target was anchored to pre-announced crawling peg exchange rate regime and progr am projected a gradual move towards flexible exchange rate in JulyRead MoreExchange Rate Mechanisms9910 Words   |  40 PagesINTRODUCTION An exchange rate is the price at which one countrys currency must pay in order to buy one unit of another county’s currency on the foreign exchange market. The concept of exchange rate mechanism may be explained as the technique employed by the governments in order to manage and control their respective currencies in the context of the other major currencies of the world. There are 5 exchange rate mechanisms established which each of it is meant to be followed by government regardingRead MoreDollarization in Zimbabwe5352 Words   |  22 PagesFull Dollarization The Pros and Cons Andrew Berg, Eduardo Borensztein  ©2000 International Monetary Fund December 2000 [Preface]   [The Pros and Cons of Full Dollarization]   [Questions About Pegs]   [The Appeal of Dollarization]   [The Risk Premium]   [Seigniorage]   [Stability]   [Effect on Trade and Financial Links]   [Exit Option]   [Lender of Last Resort Function and Financial System Stability]   [Conclusions]   [Author Information] Preface The Economic Issues Series aims to make availableRead MoreFixed vs Floating Interest Rate2178 Words   |  9 Pagesversus floating exchange rates Introduction The exchange rate regime The exchange rate regime is the way a country manages its currency in respect to foreign currencies and the foreign exchange market. Each country has its exchange rate policy which determines the form of a government influence on the currency exchange rate. There are three main type of the exchange rate regime: †¢ a floating exchange rate, where the market dictates the movements of the exchange rate, †¢ and the fixedRead MoreInternational Monetary System5852 Words   |  24 PagesINTERNATIONAL MONETARY SYSTEM MULTULATERAL DEVELOPMENT BANKS Meaning International Monetary System refers to the system prevailing in world foreign exchange markets through which international trade capital movements are financed exchanges rates are determined. MNCs operate in a global market, buying/selling/producing in many different countries. For example, GM sells cars in 150 countries, produces cars in 50 countries, so it has to deal with hundreds of currencies. What are the mechanics

Altruism And Egoism A Moral Code Of Conduct - 1417 Words

In psychology, altruism and egoism are two contrasting views on morality, one holding that one should value principles/actions that benefit others over oneself, the other holding that not only are we innately selfish species, but that selfishness is how one ought to act. While both theories of morality are prevalent throughout history and cultures around the world, I will be examining the two sides of egoism: physiological and ethical, and how these can be connected to altruism. These theories are essential because they provide a foundation, development and a further understanding of one’s needs. Psychological egoism is defined as the belief that the actions we perform actions for our self-benefit. In my opinion, egoism should not be looked at as a moral code of conduct that carries a negative connotation. Everyday we perform selfish actions for our self-benefit, we work for a wage, which in turn provides for ourselves and our families, if we choose to have one. It is impossible to go throughout our lives and not perform a single selfish action. In fact, it is because of our selfishness that we have survived as a species. According to the biologist Richard Dawkins, â€Å"The ruthless and selfishness of the genes make them able to procreate copies of themselves; this is the basis of the evolution†( http://old.unipr.it). Psychological egoism can lead to acts that not only benefit the individual but also the group. For example, if someone volunteers their time at a homelessShow MoreRelatedEthics Essay772 Words   |  4 PagesWhat does Rachels’s â€Å"minimum conception of morality† consist of? Morality is, at the very least, the effort to guide one’s conduct by reason-while giving equal weight to the interests of each individual affected by one’s decision. Reason and impartiality consist stuff 7. What are five common features of Cultural Relativism? 1.Different societies have different moral codes. 2. (a) The good is determined by society; (b) an act is right if it is allowed by the guiding ideals od the society inRead MoreWhat Are Military Ethics?1056 Words   |  5 PagesDiscussion 1. What are military ethics? Military ethics can mean a wide range of things. It can encompass all aspects of military conduct, from writing performance reviews on subordinates, to relations of military personnel with their civilian leaders, to issues related to war (Encyclopedia.com 2017). However this reflection paper will espouse on the essential characteristics of leadership choices, higher standard for military personnel, and behavioral traits that must be imparted to our membersRead MoreThe Moral Philosophy Of Ethical Egoism2536 Words   |  11 PagesTimothy Walter PHI101 – 5:45PM Research Paper The Moral Philosophy of Ethical Egoism â€Å"Let him be the best of men, and let him be thought the worst; then he will have been put to the proof; and we shall see whether he will be affected by the fear of infamy and its consequences. And let him continue thus to the hour of death; being just and seeming to be unjust. When both have reached the uttermost extreme, the one of justice and the other of injustice, let judgment be given which is the happierRead MoreEthical Values And Behaviors Of An Organization941 Words   |  4 PagesHow do ethical values shape behavior in organizations? According to Saleem (2014), ethical values and behaviors of an organization are made up of organizations institutionalized philosophies along with the moral ideologies of its members. In addition, the codes of ethics help to enhance the moral reasoning of employees while shaping their behaviors towards morally questioning unethical situations. Organizational leaders are encouraged to build cultures of trust with leadership who establ ish concerningRead MoreCurrent Ethical Issues in Business Essay2863 Words   |  12 PagesCurrent Ethical Issue in Business Introduction Ethics and moral obligation are something that we all encounter at one time or another. Even in a professional setting, all persons should act in a manner that would uphold the good of society. Why is it that good, ethical and moral behavior is not always adhered to? Is it because some people do not understand ethics and what it means to be ethical? To be ethical, one has to decide between right and wrong, determine what is for the betterment ofRead MoreEssay on Ethics Case Study1554 Words   |  7 Pagesor wrong based on the consequences that occur from them. Decisions are considered to be effective when the negative consequences are eliminated or minimised (Baron, Pettit Slote, 1997; Burgh, 2006). Egoism, Altruism and Utilitarianism are some of the subcategories of Consequentialism. Egoism states that people should consider their own interests first and foremost (Baron, et al.,1997). Looking from an Egoistic perspective I ought to have cancelled any further association with the fast foodRead MoreNormative Theories Of Ethics And Its Principles2769 Words   |  12 Pages Normative theories of ethics The area of philosophy which is concerned with systematizing, defending and recommendation the concepts of right and wrong is briefly defined as ethics. Thus, ethics can be consider as a set of moral rules practiced by a group of people or community. The origin of word Ethics is greece, derived from the word ‘ethikos’, meaning habit. The theories of ethics and its principles are the standing pillars of ethical analysis. These ethical theories areRead MoreThe Price Good Men Pay For Indifference3633 Words   |  15 Pagesindividuals, inclusive of interactions in business. An ethical dilemma can be defined as an instance where moral considerations are pertinent and have the possibility to escalate to an ethical dilemma. For instance a decision or situation that morally requires two or more courses of action that are conflicting or a decision that should be taken in self interest but can intrude upon a moral principle. (Robinson, 2003) Essentially an ethical dilemma is a situation where there is no perfect solutionRead MoreMy View Of Human Morality Essay1844 Words   |  8 Pagesunderstands that life is important hence he or she needs moral values, which act as guiding principles. Our values form the foundation of our lives. They dictate the choices we make and determine the direction that our life takes. Our values will influence our decisions related to our relationships, career, and other activities we engage in. The world we lived is complicated that there exist no universal morality and absolute freedom and since our morals are unique and shaped by our individual experienceRead MoreAltruism, Trust, Integrity, And Professionalism3879 Words   |  16 PagesAbstract: Altruism is a feeling and behavior that shows a desire to help other people and a lack of selfishness. Professional organizations have codified standards of conduct or ethics. The United States Army (Army) is a branch of military service and one of the nation?s professions of arms. The Army demonstrates professionalism through trustworthiness, performance of duty, and strength of character. Each of these has an established standard based on statute, regulation, or doctrinal principle. Standards

Buddhism free essay sample

This paper discusses the religion of Buddhism and claims that it is the only religion in which one can find true fulfillment. This paper compares the religion of Buddhism to the practice of psychoanalysis and claims that these two practices are the only way in which to live a fulfilled life. It surveys the main principles of the religion and gives examples of how these can improve ones life. From the paper: Buddhism has been described as a very pragmatic religion. It does not indulge in metaphysical speculation about first causes; there is no theology, no worship of a deity or deification of the Buddha. Buddhism takes a very straightforward look at our human condition; nothing is based on wishful thinking. Everything that the Buddha taught was based on his own observations of the way things were. Unlike Christianity, Judaism, Islam, or any other mono (or even poly) theistic religion, everything taught in Buddhism can be verified by our own observation of the way things are in reality. We will write a custom essay sample on Buddhism or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page This principle not only embodies the connection between Buddhism to psychoanalysis, but clearly proves why these two practices are just about the only two that will allow us to fully live our lives.

Essay on Network Security And The Network Management System Essay Example For Students

Essay on Network Security And The Network Management System Essay Abstract— the network has become an important component of an organizational business process hence its management must be as secure as possible. Administrators are, hence, faced with the challenge of securing the network. Network security encompasses monitoring and securing the enterprise. The network security comprises of a system that keeps track of the status of a range of elements within a network. Enterprises, therefore, monitor, lock and secure their domains to ensure their security and possibly prevent cyber-attacks. In Enterprise Network Management, even the latest and greatest network hardware and software won t help your enterprise much without the right network management security system to administer the enterprise’s network. As the enterprise network grows, it is important to choose the best Enterprise Networking security that will not only network tasks and optimize design, but secure your network from the threats and attacks. But even then, with the best security system and application, security is not guaranteed. There are both pros and cons of having a security in your enterprise network management system. Networks have many demands placed on them to provide connectivity for business operations and communications. Additionally, to offer the connectivity companies needs, the network must also be secure. Many security purposes have been incorporated into the network management platform to improve network user experience, security, manageability, and network performance. Also, other benefits of security inclusion in enterprise network management include the intrinsic nature of network security, vendor consolidation and ease of operational duties. Security in a network enables control and monitor of privileged net. .. 3, 2014, pp. 80–91.â€Å"Software-De?ned Networking: Why we like it and how we are building on it,† Cisco Inc., White Paper, 2013.Z. Fadlullah, T. Taleb, A. Vasilakos, M. Guizani, and N. Kato, â€Å"DTRAB: combating against attacks on encrypted protocols through traf?c-feature analysis,† IEEE/ACM Transactions on Networking (TON), vol. 18, no. 4, 2010, pp. 1234–1247. B. Heller, R. Sherwood, and N. McKeown, â€Å"The controller placement problem,† in Proceedings of the ?rst ACM workshop on Hot topics in software de?ned networks, 2012, pp. 7–12. R. Jain and S. Paul, â€Å"Network virtualization and software de?ned networking for cloud computing: a survey,† IEEE Communications Magazine, vol. 51, no. 11, 2013, pp. 24–31.M. Dabbagh, B. Hamdaoui, M. Guizani and A. Rayes, â€Å"Software-De?ned Networking Security: Pros and Cons† Oregon State University, Cisco Systems, San Jose, CA 95134 Paper