Monetary policy or exchange rates are applicable in defining the global economic order and the general economy. The article, Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute, examines the idea of national currency and the need to replace the fixed currency with flexible currency to enhance economic growth and development. Policy credibility is the main issue examined in the article and monetary policy’s role in balancing the global financial state. The article’s strengths include the comprehensive and detailed examination of the economic issues that affect the global economy and determines how countries and regions interact. The weaknesses include under-examination of the policy interventions and how they are used to determine how different currencies such as the renminbi and euro can improve the exchange rates and performance in the global trading environment (Kettell, 2004).
The CHOOSING (AND RENEGING ON) EXCHANGE RATE REGIMES is also used to discuss the actual exchange rates used at regional and international levels. One strength is the detailed information about the countries’ monetary stability and the strategies used to solve the issues related to instability in the exchange rates. The weakness associated with the text is the fact given describing institutional display and monetary floating. The other texts are primarily the exchange rate economy in the regime of political complications and instability in some countries that trade in the global economy. They have the advantage of giving theoretical evidence and scientific data regarding the required exchange rates or relevant monetary policies established to govern the international trading activities.
There are several intersections and similarities between the article content and the approaches used to examine the monetary issues used in business and the exchange of goods and services. The exchange rate regimes used appear to be similar for most of the articles, and they primarily build on the exchange rates commonly used. The powerful currencies such as the US dollar determine most of the country’s international trading zone’s performance. For instate, the traditional classification of currencies can directly influence how the different trading regions benefit from other exchange activities and the general account. For example, the US dollar is currently the top-performing exchange currency used to exchange various goods and services. It can be easily used to describe the monetary achievements and liability during trading involvement and broad participation in business that involve currency use (Bearce, 2003). Most articles illuminate why some countries prefer to flex and have reservations in their involvement in trading and export or import activities. All of the items have a theoretical consideration of the exchange rates and how they can be used as a potential intervention to solve monetary problems. Solving the problem means that the regional economies will improve and reflected on the global economy. The theoretical issues are relevant and used to understand the practical occurrence and investigate the exchange rate policies. These theoretical issues are critical and required to know how money issues can be addressed and eliminated without being pronounced. Once the effects have been destroyed, the global economy can be stabilized, and regional currency performance is balanced.
Additionally, an intersection appears from the credible commitment of the various financial institutions and the relationship with the established political systems. The political institutions play a crucial role in maintaining the performance, ranging from regional to international levels. The various study findings can determine how currency performance and exchange rates are directly influenced by political systems established and the policies that govern import and export activities. The articles give comprehensive content regarding the various political systems and governments. In countries where there are transparent systems, the currency performance is better, and economic growth and development are significantly improving. The political institutions further determine the inflation rates of both developed and developing countries. The influence of the political forces can be selected from the empirical evidence given in the various articles, such as transparency in handling the currency issues and the exchange rates. The influence is not related to the standards set by the Central Bank and IMF (Alesina & Wagner, 2006).
Political openness is another factor widely discussed in the various articles and are directly related to the extensive civil rights and the related freedom of monetary flexibility. In such cases, the two factors play a significant role in determining how the credible commitment and the political systems are the significant contributors of financial freedom and viability. The political systems also govern the institutions such as the central bank and IMF, and their operations intern affect the economic effect on the business industry and general economy. The exchange rates are determined by the regional political balance and stability that can influence the global market’s performance. The theoretical evidence and scientific data regarding the required exchange rates or relevant monetary policies established to govern the international trading activities are relevant. National currency and the need to replace the fixed money with flexible currency to enhance economic growth and development are significant intersection points and show similarity in most of the articles. Policy credibility is the main issue examined in the item and monetary policy’s role in balancing the global economic state.
The theoretical aspects are critical, show an intersection, and understand how money issues can be addressed and the problems eliminated without the impact being pronounced. Eliminating the consequences means that the global economy can be stabilized and regional currency performance is balanced. Another intersection is a theoretical consideration of the exchange rates and how they can be used as a potential intervention to solve monetary problems. Solving the problem means that the regional economies will improve and reflected on the global economy. The institutions are very critical land. Their contributions are reflected in the financial positions and the currencies used in the trading involvements. One major factor to be considered in this case is that different countries or regions have diriment political systems, and their performance must be integrated into one global system (Fisher, 2005). The system then caters to the financial deficits and the differences presented by the instability in various regions. The major financial institutions are responsible for setting the standards and ensuring that each area adheres to the established policies and provisions. The factors can be balanced so that the adverse effects are counteracted by the positive impact, reducing the financial aspects’ adverse implications. When the characteristics are correctly eliminated, the exchange rates are not under political pressure and subject to the political regime’s negativities and the dynamic business world. Since exchange activities are the major determinants of the global economic performance, and time inconsistency being the determining factor, there are several ways to examine their influence on one another and reasons for using them to have a complementary effect.
The absence of the original models is another intersection and features in most articles, especially with the current advocacy for democratic political processes. Political incentives can be used to counteract the effects of high inflation and time-inconsistency that leads to the decline of the currencies and exchange rates of some countries being weaker than that of other places. The advantages can be extended to other countries and their effects being more pronounced in different business operating units. Optimal Currency Area (OCA) is a monetary criterion that features in the various articles and shows the connection between currency exchange and the regional economic forces such as credibility and financial consistency (Broz, 2002). Monetary consistency is a performance consistency and flexibility determined by the policymakers and the provisions for economic growth and development. The policies also stabilize the role and output variability with the various countries, with fixed rates being the deeming factor. The optimal performance efficiency is verifiable and is the country’s primary performance goal to achieve currency targets. The exchange rate target is a significant force that drives the various countries as their governments adopt policies that can influence their performance. The steady overvaluing is a way to put the financial house in order and stabilize both political and economic factors adopted to reach the financial target.
The theoretical issues can aid future research and complement the available details regarding monetary policies and exchange. Some of the government policies prove to be inconsistent, and the commitment is required to improve or enhance the current state of affairs. The central banks have policies and measures that specifically improve credibility at eliminating the imperfect steps. Also, the uncertain time lags form part of theoretical studies that can be used to complement the current currency state. There is an associated political cost associated with breaking the commitment, with the policed cost and enforcement functions being applicable in the practical business world.
According to the systems, public decisions should be made openly and presented transparently and clearly to the public. Monetary technology and political institutions are supported by institutions CBI and the central bank according to the dictates they receive from the central government (Fisher, 2005). The financial expressions inaction-averse with responsibilities that are oversight. Informal pressure also arises, and incentives can be used as the right intervention to support the relevant financial institutions, such as open societies for currency intervention. The exchange rates are determined by the regional political balance and stability that can influence the global market’s performance. The theoretical evidence and scientific data regarding the required exchange rates or relevant monetary policies can be established to govern international trading activities. Political pressure from the back-channel systems has proved to be costly. The procedures for detecting manipulation from different governments or other global regions have a bearing on the worldwide economy’s general performance. Various institutions are very critical land. Their contributions are reflected in the financial positions and the currencies used in the trading involvements. One major factor to be considered in this case is the fact that different countries or regions have diriment political systems, and their performance must be integrated into one global system
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Alesina, A., & Wagner, A. F. (2006). Choosing (and reneging on) exchange rate regimes. Journal of the European Economic Association, 4(4), 770-799.
Bearce, D. H. (2003). Societal preferences, partisan agents, and monetary policy outcomes. International Organization, 373-410.
Broz, J. L. (2002). Political system transparency and monetary commitment regimes. International Organization, 861-887.
Fisher, R. W. (2005). Globalization and monetary policy (No. 118). Federal Reserve Bank of Dallas.
Kettell, S. (2004). The political economy of exchange rate policy-making. In The Political Economy of Exchange Rate Policy-Making (pp. 10-32). Palgrave Macmillan, London.