Econ

[Author s Name][Tutor s Name][Class]21 May 2008omicsThe case for targeted fiscal boost A spherical frugal slow rout is under way , - this is the central vagary of the article written by Dominique Strauss-Kahn . The author describes the economic implications of the expanding fiscal and housing crises within the U .S , and their possible impact on other industrialized countries . In Strauss-Kahn s opinion , the combination of counter-cyclical policies and medium-term fiscal policies is crucial to stand stability in international financial marketsStrauss-Kahn distinguishes several important aspects of reducing medium-term misbalances between investment and disbursement . Monetary policy remains the key factor in cutting interest pass judgment . Strauss-Kahn admits that cutting interest rates can cause higher inflation , tho the credibility of current fiscal policies helps economies name and loanress the expanding slowdown . Simultaneously , pecuniary policy may not be enough to amaze the growing economic crisis : monetary policies do not energize consumption , investment , and do not help countries right away recover from crises . This is why medium-term fiscal policy should be employ to boost aggregate demand . Ultimately , this fiscal come out can be quickly deployed as soon as monetary and economic goals are achievedIMF says world(prenominal) outgrowth go forth decelerate in 2008 The IMF expects world growth to slow down 3 .7 percent in 2008 (FinFacts . Although it is very probable that 2009 contribute display somewhat better growth results , the world is accounting entry the peak of its economic recession . The study(ip) problem is in commodity prices , which increase inflation and make fiscal and monetary policies substantially less effectiveFinFacts refer to the United States as the major source of the international economic turmoil : the U .S . financial crisis leads to liquidity shortages and decreases the prices of mortgage-related securities tough market conditions impact other advanced economies especially in Western Europe (FinFacts . Surprisingly , but the U .S crisis has not seriously affected emerging economies - mainland China and India will retain their economic growth rates (FinFacts .

The major advanced economies are experiencing slower commodity price growth , but inflation remains the major economic worry internationally . Inflation is rising in many emerging and developing economies (FinFacts . FinFacts underline the challenges international economy must address . First monetary policy must balance economic growth with inflation : the strong growth should not lead to inflation buildup (FinFacts . Second fiscal policy will add to stabilizing monetary effect , and will systematically support demand and investment in case a global economic downturn takes placeWorks CitedFinFacts . IMF Says Global Growth Will loosen up in 2008 Led by a Sharp mental retardation inthe United States 9 April 2008 . FinFacts . 21 May 2008 . HYPERLINK hypertext transfer protocol / vane .finfacts .com /irishfinancenews /article_1013149 .shtml http /www .finfacts .com /irishfinancenews /article_1013149 .shtmlStrauss-Kahn , D . The Case for a Targeted pecuniary Boost 30 January 2008 . InternationalMonetary Fund . 21 May 2008 . HYPERLINK http /www .imf .org / out-of-door /np /vc /2008 /013008 .htm http /www .imf .org /external /np /vc /2008 /013008 .htm PAGEPAGE 1 Author s Name...If you want to get a full essay, order it on our website: Orderessay

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