Liberalization Effect on Economy Essay

Liberalization Effect on Economy Essay Introduction Liberalization in general can be defined as the act in which something is made less strict. Financial Liberalization therefore refers to the reduction in any type of regulations in the financial industry of any given country (Hermes Lensink, 2005). It is the lessening of restrictions on different types of the lending instruments which can be traded and lending institutions. Examples of lending institutions that are affected by the financial liberations are the banks, money market funds, investment banks, county’s treasury or any individual issuing bonds, hedge funds and others. Financial liberation leads to the breaking away or avoiding the state of the economy being financial repression which is commonly related to government being involved in fixing interest rates which has adverse consequences in a countries economy based on the financial sector. Financial liberation is therefore related to the freeing of lending institutions interest rates as well as elimination in differ ent restrictions in the financial sector including the removal of the restrictions in banking sector, restrictions as well as managed changes in the monetary policy institutional framework, and even in the reform of different external sectors. This paper therefore assesses how financial liberation usually affects economies taking United Kingdom as our case study. It provides theoretical evidence on the merits and demerits of financial liberation in UK economy and how it spurs growth in productivity as well as marginally effects on the economy capital accumulation. The failure of some of the consumption models in predicting reasons for the fall in UK savings ratio during the late 1980s as well as in rise of the saving ratios in the early 1990s motivated economists to draw some of the US studies so as for other different models which would have been better for different consumers in UK that were unable to borrow. This, together with increased competitive lending markets led to financial liberation in UK where restrictions were eased for borrowers (ShehzaZ De Haan, 2008). UK is now known to have a liberalized system with many people blaming the current financial crisis due to liberalization. People view financial liberalization as having allowed risky financial instruments to be created and the interest rates restrictions which creates different more problems leading to recession. Examples of this include the increase in credit, increased number of loans that are risky, as well as different many bubbles. However, despite this, financial liberati on affects the economy productivity both positively and negatively as well as directly and indirectly in growth rates and capital accumulation. After the worst economic and financial crisis like three years before, the UK economy as well as the financial sector has in some ways stabilized due to financial liberalization and notably through ensuring that reform regulatory practices and policies are momentary maintained. This has been through the FSA which has played a major role in this important endeavor. For instance, the UK proposals for the new structure of financial regulation in 2010 that mainly remedies the failures in the already existing financial regulatory system and especially of the bank of England, the FSA, i.e. the Financial Service Authority as well as the Treasury are deemed to be collectively liable for the UK economic and financial stability. The new approach maintained in this structure to mostly partake supervision such as yearly stress tests in all UK financial institutions will reform them to better performance (Ucer). This will not only crystallized consumer risks but will also take care of consumers detriments. However, some significant demerits involves the inability is spotting and preventing some of the major risks from crystallization hence resulting in damaging consumers as well as market confidence and in the end harming consumers (Ross, 1997. One major argument is that financial liberation usually allows UK markets in determining interest rates which on the other hand stimulates savings as well as investments in the economy. This therefore gives rise to the economy’s virtuous cycle of growth and household’s savings. Through investments, major projects can be undertaken in the economy that leads to further growth and individual enhancements. UK as a liberalized system usually ensures that the financial system have a cyclical effects on the financial interest rates. However, deregulation in the economy has some adverse effects and especially on household saving although in the short-term (Maria Williams, 1999). On the other hand, financial liberation affects the economy productivity directly when it is expected to create international competition for different funds, thus forcing capital towards on different projects that are most productive. Indirect effects are seen when financial liberation fosters developments financially which on the other hand affects the economy’s productivity. Through increased competition, internationally, capital accumulation as an effect of direct financial liberation is usually ambiguous. For instance, liberation leads to openness of different capital stocks where capital reallocation on the other hand translates to different net flows in the country. As an indirect effect, financial development is defined as weak thus triggering the financial instability in UK’s economy as well as causing banking crises (Maria Williams, 1999).. Banking crises are risky as they harm the capability of any financial system of any economy in providing credit to the e conomy; therefore, these results to slow down in the investments in both physical capital as well as innovation investments. This may also lead to worst effect of dropping down of the TFP as a major need to shut down some productive projects. Another important example of implication of financial liberalization in the economy is that it causes the relaxation in not only the consumption but also in causing liquidity constrains in the economy where savings precautionary are deemed to decrease. This therefore has the meaning that consumers are forced in holding low buffer-stock savings which leaves them very much exposed to the economy shocks. Reduction in the precautionary savings by individuals in turn results to consumers increasing in their aggregate consumption. The case of UK behavior in consumption particularly the savings ratio is one major example of the effects of the financial liberalization in UK. During the 1990s, UK financial sector was under heavy influence by broad deregulation of financial services and industries which led to long-run stable relationships for consumption function in U.K in shifting significantly. Financial liberalization influences consumption through the behavior that exists in two different groups of consumers (Barrell Davis, 2000). This include the consumers who are constrained in consuming only from their current income as well as those consumers who relies on borrowing mainly basing on the income inflows from the expectation of the future income flows. Financial liberation therefore affects the behavior of the consumers by shifting in their saving ratios. It also causes monetary policy transmission which alters in different significant ways leading implications in ways in which UK monetary policy are implem ented. For instance, financial liberalization is said to have the effect in which it strengthens the authority of finance over the UK State. The Bank of England autonomy usually removes different policies that are very imperative to UK’s economy such as, monetary policy, credit policy, and exchange rate policy from the government and hence trust such policies to the whims of different financiers, or even to a bunch of bureaucrats who on the other hand exercises control over the sovereign Central Bank (Sants, 2010). This therefore restricts the realm of intervention of UK. Additionally, since State borrowing from Bank of England is fixed, the autonomous Bank will simply push the State the financial market meeting it their requirements for borrowing above this limit†¦.Hence, UK state will only spends in limit to what it has been allowed by finance capital. This, in Finance capital’s eyes then becomes creditworthy and a matter of supreme importance to the State and it is dro ve to pursue policies that are only allowed by finance capital for the benefit of the economy. References Barrell, R Davis, P 2000. â€Å"Financial liberalization, consumption and wealth effects in 7 oecdcountries†,London: NIESR and Brunel University Hermes, Niels Lensink, Robert, 2005. Does Financial Liberalization Influence Saving, Investment and Economic Growth? Evidence from 25 Emerging Market Economies, 1973-96, Working Papers RP2005/69, World Institute for Development Economic Research (UNU-WIDER). Maria, M.C Williams, G. 1999. â€Å"Monetary policy and financialliberalization: The case of United Kingdom consumption†, Viewed 11 November 2011, http://www.sciencedirect.com/science/article/pii/S0164070401001604 Ross Levine, 1997. Financial Development and Economic Growth: Views and Agenda, Journal of Economic Literature, American Economic Association, vol. 35(2), pages 688-726,. Sants, H. 2010. â€Å"UK Financial Regulation: After the Crisis†, Viewed 11 November 2011, http://www.fsa.gov.uk/pages/Library/Communication/Speeches/2010/0312_hs.shtml ShehzaZ, C.T De Haan, J. 2008. Financial Liberalization and Banking Crises†, Viewed 11 November 2011, Ucer, M. E. n.d â€Å"Notes on Financial Liberalization†, London: Pembroke College University of Oxford United Kingdom, http://www.econ.chula.ac.th/public/members/sothitorn/liberalization_1.pdf

How Healthcare Is Moving Swiftly Into Uncharted Territory

Healthcare is moving swiftly into uncharted territory. New regulations, changes in Medicare and Medicaid, and even reimbursement issues are all on the forefront of the twenty-first century healthcare. Heated battles are ongoing in the political arena, however it is the American patient that will feel its effects, changes, and unfortunately undergo its transition. With the ever increasing needs related to patient care, such as living longer, more complex diseases, and rapid advancement in technology, a shift in education is a must. There is a profound difference it the handling of the healthcare system. Different viewpoints has caused a poor delivery system in patient care. As nurse leaders, leading the way will be instrumental in†¦show more content†¦The patient protection and affordable care act, which attempts to reform healthcare will serve as a likely opportunity for advanced practice nurses to contribute expressively to the delivery of healthcare. While some phy sicians are battling to restrict advance practice nurses, reformers on the other hand are working just as diligently to support the advance practice role and movement. Rebecca Patton, president of the American Nursing Association, states â€Å"In some situations it can be a turf battle† (Pickert, 2009). The use of word â€Å"doctor† has caused quite a stir amongst primary care physicians. Most feel it is confusing to say the least, but advance practice nurses are fully aware of the level of education one has acquired. Educating patients to know the difference does not oppose a conflict. A New Health Care System for the 21st Century According to the Institute of Medicine, we are faced with such rapid changes, the nation’s health care delivery system has fallen short in its ability to translate knowledge into practice and to apply new technology safely and appropriately (IOM, 2001). As an advanced practice nurse, leading and teaching shall be vital to the delivery system outcomes. The Institute of Medicine has identified six areas of needed improvement such as safe care, effective care, patient-centered care, timely services, efficient care, and

Telephone’s Influence on Society Free Essays

Over the centuries, people have been striving towards a fast, reliable means of communication. At first, those gaps were bridged with language, usable in face-to-face encounters and then written language, which could be transported over vast distances, though the timeliness of the message left something to be desired. Some civilizations used methods other than written languages to communicate messages accurately across long distances. We will write a custom essay sample on Telephone’s Influence on Society or any similar topic only for you Order Now Perhaps the most famous example would be the Incans of South America. When one village had to deliver a message to another village, several colored pieces of string would be knotted in a specific pattern then run to the neighboring village to deliver the message. Other peoples simply used oral messengers to carry the communication to others. Again, the problems with these systems were two-fold. If one simply sent a messenger, the communication could get lost in the traveling process, and if one sent some sort of written messages, those devices could easily be misplaced. Also, these methods relied on the speed of the messenger, which could vary, and the distance the message had to travel. For instance, in the War of 1812, the English and Americans signed the Treaty of Ghent in late 1814, effectively ending the conflict. However, it took six weeks for word to reach the capital of the United States and even longer for it to reach the outlying cities. Because of this, the bloody Battle of New Orleans occurred after the treaty had been signed, costing the British armed forces over 2,000 lives. Obviously, the need for instantaneous and accurate communication was reaching a paramount level with civilizations being spread across such vast distances. The telephone, invented by Alexander Graham Bell in 1876, solved this problem by transforming human speech into a series of electrical signals that could be sent very much like a telegraph, though on different wires. This invention took quite a while to catch on as the now popular telegraph system had a stable infrastructure already in place. However, the benefits of instantaneous, clear communication eventually outweighed the convenience of the existing infrastructure, and the telephone became the preferred means of communication across distances. Before the telephone, people generally communicated through written prose, usually some type of letter or other document. Although the telegraph did much to speed up the communication process, it was still too cumbersome for everyday use and was not something that normal people used to communicate with their friends and family. Long letter were the norm, with face to face contact being preferred with neighbors unless there was some sort of dispute to work out. Men and women also spent much more time in face to face communication when catching up with the neighborhood gossip. Local clubs and gathering were often hot spots for these exchanges. The telephone made these interactions at once more personal and yet more distant. People were able to communicate instantly (at least they were by the 1960’s when telephones were in more than four out of five American homes) and cost-effectively. For exchanges that took place over great distances, this was quite an advantage, as the news reaching these people was no longer outdated. But it also brought a gradual reduction in the time spent in face to face contact with neighbors or other local peoples. The telephone gradually morphed into many forms involving both wired and wireless technology. From the phonograph to the dial phone to the Iphone these innovations have become almost central to everyday life of modern Americans. And without these products, daily life would be much different, especially with the value people now place upon instantaneous information. This sort of communication is now central to most civilizations, and it would be impossible without the services of the telephone. How to cite Telephone’s Influence on Society, Essay examples