see attached
Replies: 100 word minimum each/ 1 source min
1. Key Term and Why You Are Interested in It (100 words minimum)
I am interested in conducting further research on inflation due to its profound impact on economies and individuals. Inflation affects purchasing power, savings, investments, and overall economic stability, making it crucial to understand and make informed financial decisions, especially during economic uncertainty or rapid price increases. I am curious to explore the causes, effects, and mitigation strategies related to inflation to gain a better understanding of its implications for different economic sectors and society. By delving into these aspects, I hope to contribute to a deeper understanding of inflation dynamics and their broader economic implications, aiding in better policy-making and financial management.
2. Explanation of the Key Term (100 words minimum)
Inflation is the sustained increase in the general price level of an economy’s goods and services over time, often measured by the Consumer Price Index or the Producer Price Index. It can be caused by various factors, including excess demand relative to supply (demand-pull inflation), rising production costs (cost-push inflation), or government policies such as excessive money printing. Inflation erodes the purchasing power of money, leading to higher prices for goods and services. Depending on its rate and predictability, it can positively and negatively affect an economy, affecting consumers, businesses, and overall economic stability. Understanding inflation is crucial for policymakers, companies, and individuals in making informed decisions.
3. Major Article Summary (200 words minimum)
Title: Impact of inflation on economic growth: evidence from Nigeria.
Summary: This article discusses the relationship between inflation and economic growth, focusing on developing countries. It highlights that moderate inflation can positively impact economic growth by stimulating investment and consumption. However, high and unpredictable inflation can lead to uncertainty, reducing investment and economic development. The article emphasizes the importance of stable inflation rates and effective monetary policies to promote sustainable economic growth.
Title: Causes of inflation in Turkey
Summary: This article examines the various causes of inflation, including demand-pull and cost-push factors. Demand-pull inflation occurs when aggregate demand exceeds aggregate supply, increasing prices. On the other hand, cost-push inflation occurs when production costs rise, leading to higher prices for goods and services. The article discusses how government policies, such as monetary and fiscal policies, can also contribute to inflation. It concludes that a combination of factors, including excessive money supply, rising production costs, and government policies, can lead to inflation.
Title: The Effects of Inflation on Income Distribution in Colombia
Summary: This article examines how inflation can impact income distribution within an economy and discusses how inflation affects different groups of people, such as wage earners, fixed-income earners, and investors. Wage earners may see their real wages decrease during times of high inflation as their nominal wages fail to keep up with rising prices. Fixed-income earners, such as retirees living off fixed pensions, may also experience a decline in their purchasing power.
The article also discusses how inflation can impact income distribution through its effect on asset prices. Investors holding assets like stocks and real estate may benefit from inflation, as the value of these assets tends to increase. However, those who do not have such assets may see a widening wealth gap. Overall, the article highlights the complex effects of inflation on income distribution and emphasizes the importance of considering these effects when designing monetary and fiscal policies.
4. Discussion
5. a. The cited work on the impact of inflation on economic growth in Nigeria underscores the significance of stable inflation rates and effective monetary policies for fostering sustainable economic growth. This is particularly relevant to the assigned module, as it delves into the challenges and implications of inflation for developing countries, which are pivotal topics in discussing economic development and stability. By examining the Nigerian context, the work provides a real-world example that aligns with the module’s focus, offering valuable insights into the complexities and dynamics of managing inflation in developing economies.
6. b. The work on the impact of inflation on economic growth in Nigeria aligns with my earlier explanation by emphasizing the critical role of stable inflation rates and effective monetary policies in sustaining economic growth. This is pertinent to the assigned module’s economic development and stability discussion, particularly in developing countries. It highlights the challenges and implications of inflation in such contexts, offering valuable insights for policymakers and economists. Additionally, the work complements the other two works by providing a practical case study of inflation’s impact on economic growth, further enriching our understanding of inflation dynamics and their broader economic implications.
7. References
Adaramola, A. O., & Dada, O. (2020). Impact of inflation on economic growth: evidence from Nigeria.
Investment Management & Financial Innovations,
17(2), 1.
Kibritçioğlu, A. (2001). Causes of inflation in Turkey: A literature survey with special reference to theories of inflation.
Berry, R. A. (2019). The Effects of Inflation on Income Distribution in Colombia: Some Hypotheses and a Framework for Analysis. In
Economic Policy and Income Distribution in Colombia (pp. 113-131). Routledge.
BM
Key Term and Why You Are Interested in It
Volatility is an important aspect of the global economy for organizations to understand. Currency volatility has the ability to influence a country’s global trade, economic stability, investment decisions, risk management, and export and import costs for goods. On a larger scale, it can signal to the rest of the world that your country is struggling with inflation, politics or economic conditions. If businesses can understand volatility, they will be able to better approach their selling and buying practices with other country’s products and services. Volatility is an area of global trade that makes sense to other people when explained, but it is generally not an area of global trade that they initially think of which makes it incredibly interesting to me.
Explanation of the Key Term
Volatility indicates the likelihood of fluctuations in currency exchange rates anticipated within a year (Satterlee, 2023). The greater the uncertainty in a currency’s behavior, the increased risk associated with transactions involving that currency and conducting business in its home country (Satterlee, 2023). This can affect the price of everyday goods, employment rates, and personal investments for the people of the country. Fluctuations in exchange rates also influence domestic production and agriculture by stimulating the competitiveness of exporting domestic goods to foreign markets (Satterlee, 2023). This shows that volatility does not necessarily have to be a completely negative concept. Volatility can sometimes provide benefit from the different partnerships made with other countries when their currency was experiencing volatility.
Major Article Summary
The article presented discusses how economic strength can help manage periods of volatility. For instance, capitalism discourages risky investments during volatile times, contributing to market stabilization (Uddin et al., 2021). Because the country’s industry is controlled by private owners looking for profit, it discourages businesses owners under capitalism from taking risks that could add to the volatility that the country’s currency is experiencing. The level of financial development a country has plays a crucial role in minimizing market volatility, especially during events like virus outbreaks (Uddin et al., 2021). Developed financial markets with strong banking networks and well-structured capital markets are better equipped to reduce stock price volatility (Uddin et al., 2021).
There are differences in the way that developed and emerging markets would approach volatility. Policy rate changes during periods of fear and uncertainty have varied impacts across developed and emerging markets (Uddin et al., 2021). Improved health systems boost investor confidence and reduce market volatility, particularly in emerging markets (Uddin et al., 2021). If an emerging market is experiencing volatility, they should focus on improving health systems to draw in more investors. The more people are willing to work with your country’s global market, the sooner the country’s currency can move out of the period of volatility. Developed markets generally exhibit more successful management of market volatility compared to emerging markets, supported by their economic resilience (Uddin et al., 2021). Since developed markets are stronger and more varied, they reinforce the idea that focusing on building economic strength can help a country weather volatility.
Discussion
The cited work and definition of volatility work hand in hand. While understanding what volatility is important, it is just as important for countries and businesses to know some of the ways to overcome volatility. Volatility in currency is something that affects the country’s whole population, so it is important for more people to understand the inner workings of it. While it can be worrisome to approach, by strengthening their economies, countries around the world can better weather the storm that currency volatility can bring. Fluctuation in currency markets is something that can affect any market, but it can especially hamper emerging markets, so it is important for these markets to focus on strengthening aspects such as healthcare so that investors can be drawn in.
The additional articles researched support the main cited source by discussing ways to predict volatility. Forecasting volatility, traditionally valuable for risk management, has gained significance due to the direct tradability of volatility using swaps and futures (Patton & Sheppard, 2015). Volatility in one commodity can predict future volatility in related commodities (Marfatia et al., 2022). When predicting the future volatility of individual agricultural futures, their common volatility is more informative than volatility in the oil market (Marfatia et al., 2022). Through the ability to predict areas of volatility, countries are better able to identify any misalignments in their areas of trade and try to resolve the issue before that market begins the plunge into volatility.
References
Marfatia, H. A., Ji, Q., & Luo, J. (2022). Forecasting the volatility of agricultural commodity futures: The role of co‐volatility and oil volatility. Journal of Forecasting, 41(2), 383-404.
to an external site.
Patton, A. J., & Sheppard, K. (2015). good volatility, bad volatility: Signed jumps and the persistence of volatility. The Review of Economics and Statistics, 97(3), 683-697.
to an external site.
Saterlee, B. C. (2023). International Business with Biblical Worldview. McGraw-Hill Education LLC.
Uddin, M., Chowdhury, A., Anderson, K., & Chaudhuri, K. (2021). The effect of COVID – 19 pandemic on global stock market volatility: Can economic strength help to manage the uncertainty? Journal of Business Research, 128, 31-44.
TR
Apr 21, 2024Apr 21 at 8:51pm
Key Term and Why Interested: Securities Exchanges
I picked securities exchanges because I find the whole concept interesting. The idea that we no longer have companies that are just locally owned- shows how far we have come as a society. Also, the idea that the market determines how much a company is worth is crazy to think about. The company I work for recently had Carl Ichan buy a great deal of stock, enough to get two board seats. This has caused a great deal of talk within the company as we know that he is in it to make money. Just with him buying stock will change the value of the AEP stock, because of his reputation.
Explanation of the Key Term:
Securities are futures, options, stocks, bonds, treasury bills, etc., according to Satterlee, (2023). When companies sell stock the owners of that stock can resell that stock on the security exchange market (Satterlee, 2023). Securities exchanges are the securities changing ownership. Security exchanges occur at a physical place- called the stock market (Satterlee, 2023). Several security exchange marketplaces- Hong Kong, New York, and London, are the most famous (Satterlee, 2023). The New York Stock Exchange opened in 1792 (Satterlee, 2023). At this time, trade was not very regulated, today, the Securities Exchange Commission regulates the activities of the securities exchange markets (Satterlee, 2023).
Major Article Summary:
The article I chose centered around the history of the US financial exchanges. Jorgensen, Kavajecz, and Swisher believe that macroeconomic fluctuations, advances in communication, increased regulation, and times of uncertainty have had the most impact on exchange dynamics (2021). They also mention it is important to remember times of war also change the dynamics of securities exchanges (Jorgensen et al., 2021). Jorgensen and associates found that with the personal computer becoming popular increased entry and reduced exit events (Jorgensen et al., 2021). As expected, the federal security regulation reduced the number of exchanges and entries but did increase exit events (Jorgensen et al., 2021).
This article gives a history of the US financial exchanges. The article states that since the 1800’s the US has seen many dramatic changes in financial exchanges (Jorgensen et al., 2021). There have been times, such as in the early 1900s when mining exchanges increased the number of exchanges (Jorgensen et al., 2021). The article studied 327 US exchanges between 1855 and 2012 (Jorgensen et al., 2021). The study found that economic growth, regulation, and communication affect financial exchanges the most (Jorgensen et al, 2021). They found that economic growth helped entry positively while regulation affected it negatively (Jorgensen et al., 2021).
Discussion:
This article helped me to understand the history of the US financial exchanges. The whole concept of a stock market to where a company’s value is dependent on that market, is very thought-provoking for me. With someone buying into the company I work for, it helps to understand how the process works. I understand that the company wants to look good on paper so that their value is increased. Their numbers need to be good so that people will still want to invest in them and that their stock does not go down. I work in the customer service department, customer service is about keeping the customers happy with our service, it is not about profits, so when someone wants to increase profit, they must cut expenses.
The other articles I found on this subject all looked at certain aspects of security exchanges, not history or overall. The article by Klimczak and associates was on deterring financial conduct when crime pays well (2021). This article looks at extrinsic and intrinsic motivation and also altruistic motivation (Klimczak et al., 2022). The article by Helland and Voita discusses administrative courts (2023). This article discusses how the SEC has been allowed to move cases from the administrative courts to federal courts (Helland & Voita, 2023). While these articles were interesting, they were not what I was looking for.
References
Helland, E., & Vojta, G. (2023). Legal Outcomes and Home-Court Advantage: Evidence from the Securities and Exchange Commission’s Shift to Administrative Courts. The Journal of Law & Economics., 66(4), 797–835.
Jørgensen, B.,N., Kavajecz, K. A., & Swisher,Scott N.,,IV. (2021). The historical dynamics of US financial exchanges. Financial History Review, 28(2), 153-174.
to an external site.
Klimczak, K. M., Sison, A. J. G., Prats, M., & Torres, M. B. (2022). How to Deter Financial Misconduct if Crime Pays?: JBE. Journal of Business Ethics, 179(1), 205-222.
to an external site.
Satterlee, B.C., (2023). International Business with Biblical Worldview, Second Edition. McGraw- Hill Education LLC.
