The Growing Importance of Monetary Policy in Government

The Growing Importance of Monetary Policy in Government Monetary policy is important in decisions the United States government makes about economic practices and regulations, but equally important are the fiscal policies, which government spending and tax reform are geared toward in stimulating the economy. To understand the importance of monetary policy in the equation, one must first understand what the term means. The Economic Times defines monetary policy as the macroeconomic  policy  laid down by the central bank, which manages interest rates, money supply, and functions as the demand side of economic policy to affect inflation, consumption, growth, and liquidity. There is, however, a limit to the amount monetary policy can affect the economy because it hinges upon interest rates and monetary circulation. Once the interest rate hits zero, theres not much more the Federal Reserve can do in terms of monetary policy to help the economy. Fighting Inflation Versus Fighting Unemployment The  U.S. Department of State  argues that one of the key reasons that monetary policy is favorable during financially successful periods of the American economy is that it affects inflation rates positively but is relatively useless in fighting unemployment.   This is because theres a limit to the amount of monetary manipulation the Federal Reserve can do to the global value, or exchange rate, if the U.S. dollar plummets. Monetary policy primarily affects interest rates through control of the amount of currency in circulation (and other factors), so when the interest rate bottoms out at zero percent, theres nothing else a bank can do. If you take a look back at the Great Depression, over 3,000 banks failed during the 1930s- monetary policy meant very little when the value of the dollar had sunk to its lowest rate in history. Instead, fiscal policy and a series of unpopular yet successful economic policies helped America get back on its feet. Fiscal policy opened up new jobs and increased government spending to right the wrong of the market crash. Basically, the United States- or any governing body- can, in times of need, enact aggressive fiscal policy to combat market stagnation. How Monetary Policy Applies Now Because the United States economy has experienced its highest point in the last decade (the 2010s), monetary policy that cuts taxes and increased government spending in business and job-creation markets, especially under former President Barack Obama, has led to a decrease in the unemployment rate and a rapid increase in the United States GDP. Fiscal and monetary policies go hand in hand in the  federal legislature, where annual budgets dictate government spending in certain economy-stimulating areas as well as the creation of jobs through social welfare initiatives. The Federal Reserve annually dictates interest rates, liquidity, and currency circulation, which in turn also stimulate the market. In truth, without either fiscal or monetary policy in United States federal- and indeed local and state- government, the delicate balance of our economy might slip back into another Great Depression. Regulations, therefore, are important to maintaining a status quo across all states wherein each citizen is guaranteed their rights to life, liberty, and the pursuit of happiness.

Pizza Hut and GE Culture Management Essay Example | Topics and Well Written Essays - 1500 words

Pizza Hut and GE Culture Management - Essay Example GE’s culture was based on individuals and intrinsic motivation which helps its employees seek benefits for the company while they seek benefits for themselves. As outlined by Jack Welch in his management related book Winning (2005), GE rewards those employees who are instrumental in helping GE grow and achieve the corporate vision and punishes those who are not performing to the highest level. In fact, layoffs and quarterly removal of lowest performing employees is an essential part of the management style employed at GE. The method used by GE to control the culture of their operations in Hungary was dependent upon the Hungarian acceptance of their 95 page manual on corporate culture titled Integrity: The Sprit and Letter of Our Commitment. The initial results were disastrous to say the least since bad press, negative sentiments and resentment amongst the employees was created once GE’s creed was being established in the company. However, with time, the situation subsided and the majority of employees accepted the way GE worked. The most important advantage of changing GEL’s European operations from the domestic to regional and global levels was the change in culture which came about when the employees realized they were competing in such markets. The location and availability of labor can also be expected to have played a role here since the Hungarian labor market is closer to the western countries it is supposed to cater for rather than the Russian bloc or the Asian markets where GE’s products might be seen as too expensive. While the expansion of GEL’s operation to global level worked in this particular case, there is not enough information to say whether the same process would be successful if it is applied to other GE operations around the world There are several factors which must be considered before local operations can be asked to provide