Econometric Modeling
Financial risk is currently at the center of all economic activity due to the incredibly unstable financial environment of the world economy. As a consequence the search for ways to reduce risk has taken a front seat in the important issues of our day. Several instruments exist in order to increase risk reduction possibilities, these include forward and futures contracts as well as various derivatives. That the most optimal number of risk reduction tools is used is vital. That ratio, the optimal number of risk reduction instruments, is decided by the relationship that exists between the spot instrument and the risk reduction tool. A time varying parameter model has been proven to be more effective in finding the relationship between economic variables and can therefore find an optimal reduction risk ratio that is not constant and can be controlled (Hatemi-J and oca, 2006). The economic exposure can be controlled…...
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References
Adler, M., and Dumas, B., (1984) Exposure to currency risk: definition and measurement. Financial Management 13, 41 -- 50.
Baillie, R.T. And R.J. Myers (1991). Bivariate GARCH Estimation of the Optimal Commodity Futures Hedge. Journal of Applied Econometrics, 6, 109-124.
Butterworth, D. And Holmes, P. (2001). The hedging effectiveness of stock index futures: Evidence for the FTSE-100 and FTSE-Mid 250 indexes traded in the U.K., Applied Financial Economics, 11, pp. 57-68.
Bystrom, H.N.E (2003). The Hedging Performance of Electricity Futures on the Nordic Power Exchange. Applied Economics, 1, 1-11.
C. revealed some factors affecting healthcare costs. This includes (Francis, 2003).
Drug companies who are spending roughly as much on advertising and promotion - $20 billion a year - as they do on research and development of new drugs.
American pharmaceutical firms employing one sales person for every physician in the country. They also pick up the tab for doctors to attend seminars promoting their products.
New technology - from diagnostic devices to surgical techniques - which usually accounts for more than half the rise in total healthcare spending in the past three years.
Profit margins on healthcare products and services, including health insurance, have been continuously going up - rapidly - rather than down.
How to Solve the Issue
hat's to be done about rising medical costs? Here are some suggestions by experts (Francis, 2003).
Provide more information to consumers on what drug works, what procedures are best, which hospitals and physicians have good records. Insurance,…...
equations for a macroeconomic model including private, public, and international sectors. Derive the aggregate demand function. List the forces (i.e., factors) which are held constant for each behavioral equation. Select four of these and, for each, explain how a change in the exogenous factor will affect the aggregate demand function. Explain the effect of each change on real income and output, employment, the price level, the interest rate, the foreign exchange rate, and the government budget balance.
While this question asks us to derive the aggregate demand function, it should be noted that aggregate demand models do not exist sui generis but rather as a part of the paired set of aggregate supply and aggregate demand. These paired ideas together form a model of an aggregate economy, which is simply one in which the price level of any good is set by a balance that exists (or is sought) between…...
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High levels of inflation are most often found during times of war (certainly one rather dramatic constraint on typical marketplace activities) along with other serious forms of political upheaval as well as such key problems in the structure of productivity as poor harvests due to drought or sudden and unexpected shortfalls of key component parts of industrial processes. The Fed has every reason therefore to be cautious right now about inflation: There are few enemies more daunting to sustainable growth than inflation.
Much of contemporary economic growth theory can in fact be boiled down to various attempts to develop (and, one assumes, to have implemented) a theoretical model that is capable of bringing the rate of the growth of aggregate demand and the rate of the growth of aggregate supply into line with one another on the personal, national and international level.
All such economic models of growth may be loosely classified into two types: Those that emphasize tinkerings in demand (and which are called supply-determined models) and those that emphasize adjustments in supply (which are called demand-determined models). None of the many models in either of these two modes have proven to be entirely successful and it is perhaps because neither has taken into sufficient account the importance of the concept of sustainability. After all, we are in this for the long run - or at least we hope that we are. http://www.digitaleconomist.com
Economics of Alchohol Abuse
Alcohol for consumption is not a necessary food item, but for some has become a standard part of adult culture. Increasing the level of alcohol consumption, however, moves from an economic paradigm to a social issue due to the ancillary health and behavioral effects from alcohol abuse. In turn, this becomes part of economics in that it requires fiscal resources to treat societal issues caused by alcoholism: domestic abuse, crime, traffic or driving issues, etc. The economic effects of alcohol are undebatable, and are pervasive in the overt and covert areas of the economy (short- and long-term) (Fogarty, 2006).
In the economic sphere of political and social policy, alcohol, like tobacco and gambling, are considered a "sin" tax that is ostensibly designed to reduce transactions for issues society considers dangerous or undesirable. However, when it comes to alcohol, many see that this type of a sumptuary taxation policy…...
Further reported by Kodakanhi et. al, is the fat that one of the Afrian ountries, and there are many, that faes poverty and inequality disaster is the ountry of Ghana. Advanes in tehnology in Ghana are stated to be "meager sine its independene in 1957." (2006) the eonomi development model based on it for developing ountries takes into aount the major onerns to it advent into these ountries whih are those of the: (1) Inability to invest in the it field due to poor finanial infrastruture; and (2) inadequate human power with the knowledge of it." (Ibid) the eonomi model, whih has been proposed, is one that has larger foreign investment and government poliies in support of it development as well as an awareness on the soial level of the importane of it. Higher…...
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cited in Raji, Ayoade and Usoro, 2006) the roles that government play in the facilitation of appropriate use of ICT include: (1) approval of policies for the major sectors of the industry [National Telecommunications Policy, National Information
In the future, the politicians could support an agenda promoting the national manufacturers in an attempt to reduce imports and increase exports. The direct impact for the mechanic could be that he might have more work in the future.
Another example of how the book is useful is given by the need or desire to understand the features of the contemporaneous economic crisis. Despite the fact that the media present apocalyptic stories of today's financial challenges, a reading of Clayton and Giesbrecht's book would reveal that the economy has often been confronted with challenging times and that times of economic boom and recession are normal. Otherwise put, a Guide to Everyday Economic Statistics would help the reader understand the cyclic character of an economy and he would as such be less pessimistic. Listening only to the media coverage of one bankruptcy following another would definitely take a negative toll on…...
International Trade Theory and Export Promotion
The two graphs represent the production outputs of two countries. The first graph represents a developed country, which specializes in the production of machines, which is capital intensive.
The second graph represents a developing country which specializes in textiles, which is labor intensive. The factor endowments model of international trade is based on the concept that each country has a certain specialty that they are skilled at producing and that there are not enough resources or skills in every country to produce everything that is needed. Each country specializes what it is good at producing and trades for goods that it cannot product itself.
In perfect trade equilibrium, the production and consumption of both items would be increased. When the value of exports and the value of imports for both countries are equal, then both countries are at maximum consumption of both goods. In this scenario prices…...
Exxon Mobile
ExxonMobil is the world's largest publicly traded international oil and gas company (ExxonMobil, N.d.). The industry is multifaceted and is composed of many different segments -- everything from the exploration of oil, the refinement process, and the transportation via ship, tanker, or pipeline. The oil and gas is of critical importance to the world's economy because there are many other industries are directly dependent upon these fuels. For example, oil can be used as a raw material to produce many other goods. Furthermore, oil and gas are the preferred fuel for the world's transportation system that is responsible for moving goods and services globally, which has also become increasingly important as the world has rapidly become more globalized.
John Galbraith challenged much of the conventional wisdom associated with classical economics (Economist View, 2006). One of his criticisms deal with what he refers to as the dependence effect. This thought deals…...
Two alternative solutions are available. The first sees that the U.S. federal authority uses the budget allocated to support the development of the national industries, without raising barriers to imports. The second possible solution is for the United States to strive to increase its exports by focusing more on international operations.
Criteria / goals
The evaluation criteria for the proposed solutions revolve around the benefits they generate, as well as the costs they imply. Otherwise put, the decision will be made in accordance with the arguments in favour and against each of the two alternatives, and by the solution's ability to meet the established goals. These goals include the insurance of economic stability within the United States (for all population, corporations and the entire system), the maintenance or even development of international relations, as well as the sustained development of the domestic industries.
Evaluation of alternatives
Alternative 1:
Pro: does not negatively affect international…...
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References
January 29, 2009, Buying American, the Economist, last accessed on February 5, 2009
Steps in the P.A.C.E.D. Model, the Gus a. Stavros Center for Free Enterprise and Economic Education
d.).
In order to understand this idea about inventories, it is necessary to understand that if the prices were to change and not be rigid, then it would be the prices and not the inventories that would guide companies in their decisions about production. For example, if prices were increasing, a company would know that their product is popular and that they should increase the production of it. And if the prices were decreasing, the company would know that their product is not selling well and that they should probably reduce its production. In an economy though where the prices are fixed, companies need another way of deciding whether they should increase or decrease production. This is where Keynes came to the conclusion that the key is to observe the changes in the inventories in order to drive production (hat Causes a Recession to be a Recession, n.d.).
Over the years the…...
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Works Cited
Harrison, Edward. "Chart of the Day: Unemployment as a Recession Indicator." 2008. Credit
Writedowns. 7 April 2009
Reddy, Sudeep. "Jobless Rate Hits 8.5%." The Wall street Journal. April 2009
Energy costs increased substantially and the yen's exchange rate was shifted to a floating rate. The eventual recession reduced expectations of future growth and reduced private investment. Economic growth went down from 10% to 3.6% during the period 1974-79 and to 4.4% in the decade of the 80s. ut despite the oil crisis and its consequences, Japan's major export industries stayed competitive through its cost-cutting policy and increasing efficiency. It reduced industrial energy demands and allowed the automobile industry, along with other industries, to improve. y the late 70s, the computer, semiconductor and other technology and information-intensive industries entered a period of rapid growth. During this high-growth era, exports continued to support Japan's robust economic growth in the 70s and in the 80s. However, the problems encountered on account of its growing balance of payments surplus urged for the opening of domestic markets and a stronger focus on domestic…...
Bernier, B. (1980). The Japanese peasantry and economic growth since the land reform of 1946-47. 40 pages. Vol 12 issue 1. Bulletin of Concerned Asian Scholars: Questia Media America, Inc.
Luu, L.T. et al. (1996). Summary report on Japan. Team # 6. Chinman: University of Hawaii..
Economics
In order to understand the ways that different changes in the external environment will affect the demand for milk, some assumptions need to be made with respect to the milk market. e know that demand for milk will increase as wealth increases, which is the result of milk being something of a luxury item (Arnold, 2007). This means that there is some degree of correlation between wealth and milk consumption, and that implies that if wealth declines, milk consumption will also decline.
e also know that demand for milk is somewhat price inelastic. hen prices rise, people still pay them (Dohery, 2007). This is the result of two factors. The first is that there is a baseline demand for milk that is not going to be affected by price. The second is that the demand for milk is affected more by the wealth of the purchaser than the cost of the…...
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Works Cited:
Arnold, W. (2007). A Thirst for Milk Bred by New Wealth Sends Prices Soaring. New York Times. Retrieved June 6, 2011.
Dohery, Regan. (2007). Milk Demand Stays Strong Despite High Prices. Reuters. Retrieved June 6, 2011.
Rittenberg Libby and T. Tregarthen. (2009). Chapter 5: Elasticity and A Measure of Response. Section 1 and 2 only. Principles of Microeconomics. FlatworldKnowledge.com. Retrieved June 6, 2011
Economic Order Quantity Analysis:
Management of Emergency Food Provision by NGOs
When ordering supplies, managers of both for-profit and not-for-profit organizations must answer the deceptively difficult question: how large an order should my organization place? The Economic Order Quantity (EOQ) analysis method gives an accurate picture of the variables involved in making order quantity decisions (Finkler, 2009). Some organizations like food pantries, for example, may not have the flexibility to adjust some of these variables (e.g. how much is available from particular suppliers; how much demand is made on resources), so the EOQ equation allows supply managers to adjust other variables to accommodate changes in supply and demand in nuanced ways.
The case study I will examine is a food bank that supplies meals for the homeless. They order large quantities of ingredients through government-subsidized contracts at a fixed price, but demand is not constant and thus carrying cost can change based on…...
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By comparison, if Meals for the Homeless ordered only once per year, assuming that the shipment of goods would indeed remain unspoiled for 12 months, their total cost would be $4,538.83. This is sub-optimal in terms of both holding costs and interest although it does keep ordering costs to a minimum. Interestingly, since Meals for the Homeless is not directly compensated for the merchandise it distributes, this one-order system may in fact be optimal. However, if the organization is compensated by governmental agencies based on the amount of meals it delivers to the served population, it may be prudent to utilize the EOQ model to determine optimal order quantity for this and other products.
S. The societal system practiced in France serves as a model towards which the U.S. aspire.
President Barack Obama's healthcare reform plan is considered by many as being a socialist experiment that will significantly hurt the economy (CBS, 2009). In opposition, the President has stated that he does not intend to implement a healthcare system that depends on the government. Instead, he would prefer a system in which the government competes with private insurance companies for selling coverage.
The Invisible Hand Principle
The invisible hand principle was developed as an opposition to the protectionist system. This principle is actually a metaphor describing the self-regulating characteristic of the market. In other words, such a system can be implemented due to a combination of factors, like self-interest, competition, supply and demand. Adam Smith, who developed this theory, considered that the action of these forces and their effects are able to allocate resources within the society.
Thus, a region or nation experiencing economic depression will be unable to use the interest rate lever to boost the economy. Similarly a country with high inflation will be unable to independently raise interest rates to contain inflation. Moreover, Islamic countries, which form a large part of the geography, do not believe in interest rates.
Political barriers -- Political differences between nations make it extremely difficult for them to adopt a common currency. It can lead to a loss in political sovereignty as monetary interests would need to surpass political interests. This is unlikely to be acceptable to most of the nations and the idea of a single currency may be difficult to implement (Gimp, 2008).
Will Pros and Cons change Over Time? Depending On the Country?
The economic conditions to determine a monetary union depend on: the openness and size of the economy involved to trade; the free movements of capital…...
Frankel, J. (1999, August). No single currency regime is right for all countries or at all times. Retrieved May 11, 2009, from Princeton University: http://www.princeton.edu/~ies/IES_Essays/E215.pdf
Essay Topic 1: The Evolution of Feminist Thought: From Suffrage to Intersectionality
Trace the historical trajectory of feminist thought, from the early suffrage movement to contemporary intersectional feminism. Analyze the shifting definitions and goals of feminism over time. Examine the impact of social, political, and economic factors on feminist ideologies.
Essay Topic 2: The Intersectionality of Feminism: Identity, Power, and Oppression
Explore the concept of intersectionality and its significance within feminist theory. Discuss how race, gender, class, sexuality, and other identities intersect to create unique experiences of oppression and empowerment. Analyze the ways in which intersectionality challenges dominant feminist narratives and....
Compare and contrast the themes and characters in two novels or plays by the same author. Analyze the similarities and differences in the narrative structure, setting, and style of two short stories. Discuss the different perspectives and interpretations presented in two poems on the same subject.
2. Historical Events:
Compare the causes and consequences of two major historical revolutions. Analyze the similarities and differences in the strategies and tactics used by two military leaders during a particular war. Discuss the impact of two different technological advancements on society.
Disrupting the Attention Economy through Strategic Hacking Techniques
The attention economy, predicated on capturing and monetizing individuals' attention, has become a dominant force in the digital landscape. However, strategic hacking techniques can be employed to disrupt this economic model and empower individuals to regain control of their attention.
1. Ad-Blocking and Content Filtering:
Ad-blockers and content filters effectively block intrusive advertisements and distractions from reaching users. By limiting exposure to unnecessary content, these tools reduce the ability of companies to capture and exploit attention.
2. Privacy-Enhancing Technologies:
Privacy-enhancing technologies, such as VPNs and browser extensions, prevent companies from tracking users' online activities. This makes it....
Mixed Economies: Striking a Balance Between Intervention and Market Freedom
Mixed economies represent a hybrid economic model that combines elements of both government intervention and free market principles. This delicate balance aims to leverage the strengths of both systems while mitigating their respective drawbacks. Understanding how mixed economies achieve this equilibrium is crucial for grasping their complexities.
Government Intervention
Government intervention in mixed economies primarily focuses on areas where the free market has proven inadequate or inefficient. This includes:
Public Goods and Services: The provision of essential goods and services, such as education, healthcare, and infrastructure, that are not adequately supplied by private....
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