Relationship Between Balance Of Payments And Exchange Rate Finance Essay - Free Essay Example

Sample details Pages: 8 Words: 2358 Downloads: 2 Date added: 2017/06/26 Category Finance Essay Type Argumentative essay Did you like this example? The accedence of developing countries such as China, Thailand, VietnamÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦to the international trade give them the prosperous and economic growth; however the countries have faced many issues in managing their macro-economy to sustain the economic growth and development. Especially, in Vietnam, the government usually has serious difficulties in managing and operating the economic with the deficit in the Balance of Payments, the depreciation domestic currency and retraining the local inflation. The balance of payment is one of the most considerations of the governments when they formulate the national trade, fiscal and monetary policies, so it has the significant important role in governments policy decision-making. Don’t waste time! Our writers will create an original "Relationship Between Balance Of Payments And Exchange Rate Finance Essay" essay for you Create order It also has an indispensable part to organizations (i.e. banks, companies, nongovernment organizations) and individuals that are directly or indirectly involved in international trade and finance (Dominick Salvatore, 2011). And the Balance of Payments is a significant indicator of the pressure on the exchange rate of a country (David K. Eitman, Arthur I. Stonehill Michael H. Moeffett, 2010). In the context of Vietnam, the surplus in the Balance of Payments encourages the governments allow the value of the domestic currency to increase. On the other hand, the significant deficit in Balance of Payments force the government to devalue the price of VND (David K. Eitman, Arthur I. Stonehill Michael H. Moeffett, 2010). Next, the theories of exchange rate determination that related to the inflation and the balance of payments are Purchasing Power Parity Approaches and Balance of Payments Approaches respectively. According to Purchasing Power Parity approaches, the determination of the equilibrium of exchange rate in long term is the ratio of domestic prices relative to foreign prices (David K. Eitman, Arthur I. Stonehill Michael H. Moeffett, 2010). And along with Balance of payments approaches, the exchange rate reflects the transactions in the current and financial accounts of the balance of payments (David K. Eitman, Arthur I. Stonehill Michael H. Moeffett, 2010). The exchange rate movements also produce the risk for firms, because they result in foreign exchange exposure, i.e. transaction risk, translation exposure and operating or economic exposure. The transaction risk refers to the exposure of the firms contractual transactions in foreign currencies (Jeff Madura, 2008). The translation exposure refers to the exposure when the firms translate or consolidate their subsidiaries financial statements to the currency of the parent company (Jeff Madura, 2008). The economic exposure refers to the exposure of a firms present values, which are affected from the cha nges in operating cash flows, which are effected movements of exchange rate (David K. Eitman, Arthur I. Stonehill Michael H. Moeffett, 2010). Thus, the transaction exposure is the subfield of the economic exposure (Jeff Madura, 2008). In the context of Vietnam, USD is considered as a tool to invest; thus when the value of USD increase with respect to the value of VND, people and investor will exchange from VND to USD. There are two reasons behind that fact; first, they want to invest in USD; second, they afraid of the inflation and the devaluation in VND. Therefore, the movements of exchange rate will impact the inflation in Vietnam. And the inflation impacts everyone directly or indirectly. It impacts on savers and investors, people with fixed incomes (i.e. pension payment); for example, if the inflation rate goes up higher than the return on savings or investment, the received money will be worth less than it was when they deposited. However, the increase in the inflation may impact positively the people who owe money; they may generally get benefit from inflation if the value of the money they repay is less than that of the amount of their loans. On the other hand, the inflation may affects negatively the people who lend money, if the value of the money they lend to other people is worth than the value of money the borrowers repay them. To be noted, the inflation will influences business; the inflation will increase the costs, so the companies have to try to increase their incomes higher than the increase in inflation in order to compensate the increase in the costs (Gerson Antell and Walter Harris, 2005). The inflation also impacts the international trade of a country. In the circumstances of other things equal, if the inflation rate increases relative to that of the trade-partner countries, its current account will decrease. Because the people in that country will purchase more imports from foreign countries due to the higher local inflation, while th e exports of that country will decline (Jeff Madura, 2008). That will impact the demand for and supply of the currencies of that currencies (Jeff Madura, 2008) Next, I would like to mention briefly about the three things the research is going to study. First, tn principle, the balance of payments is a summary statement which embraces all the transactions of the residents of a nation with the residents of all other nations, and they are recorded during a period of time. (Dominick Salvatore, 2011:434).Thus, it summarizes all transaction into some categories and only the net balance of each one is included and has time dimension. The transactions in the balance of payments are international, and are classified as credits or debits. The credit transactions refer to the receipts of payments from foreigners and they are noted with a positive sign. On the other hand, the debit transactions refer to the payments to foreigners and they are noted with a negative sign. (Dominick Salvator e, 2011). Next, an exchange rate is the price of one currency expressed in terms of another (Glen Arnold, 2008:965). There are two ways of quotation for exchange rate (i.e. direct quotation and indirect quotation). Within the direct quotation, the exchange rate between a domestic currency and foreign one is equal to the number of the domestic currency to purchase one unit of a foreign currency (Dominick Salvatore, 2011). The indirect quotation is vice versa. Next, the movements of the exchange rate refer to the terms depreciation and appreciation. The depreciation is increases in the price of the foreign currency with respect to the domestic currency; and the appreciation refers to decreases in the price of the foreign currency with respect to the domestic currency page (Dominick Salvatore, 2011). Thus, the depreciation in this study refers to the increases of the price of USD with respect to VND, and the appreciation refers to decreases in the price of USD with respect to VND. I n Vietnam, USD is the most popular foreign currency and it has an significant important role in the economy in Vietnam. Moreover, the people in Vietnam invest so much in USD in order to earn interest or avoid the risk of inflation of VND. Therefore, the exchange rate that the study will collect and analyze is the exchange rate between USD and VND USDVND. The rate is quoted directly, that means the rate reflect how much domestic currency (i.e. VND) for one unit of foreign currency (i.e. USD) Next, I would like to mention about the inflation, the method to measure the inflation in this study and the inflation in Vietnam. According to Romer Inflation is an increase in the average price of goods and services in terms of money (2006: 497). The inflation is measured by many methods such as: consumer price index, producer price index, GDP inflation indices, etc. The CPI and PPI are fixed-weight measures; that means the same basket of goods and services is analyzed each month. Meanwhile , the GDP inflation indices are a variable-weight measure; within this method, the basket of goods and services being assessed depended on what was produced during a particular quarter (Evelina M. Tainer, 2006). Among those methods, CPI is the most popular method to measure inflation in the world because it has many advantages with respect to other methods. For example, the GDP inflation indices cover more items than CPI, but the GDP inflation indices are released only quarterly; meanwhile the monthly release of the CPI help people observe the inflation closely and constantly. Moreover, the PPI just embraces the price changes in wholesales business; it does not involve services which is the fastest-growing section in the world (Bernard Baumohl, 2005). Therefore, CPI is more relevant to the cost of living and the cost of doing business. Consumer price index refers how much consumers pay for goods and services, that influences individual and corporate investment, the cost of business and the quality of life (Bernard Baumohl, 2005). And CPI is an index number which expresses percentage changes from base year. Structure of literature review The literature review of this study will follow the format: The Balance of Payment The definition The constituents of the Balance of Payments. When the Balance of Payments is surplus and deficit. Their impact on inflation and exchange rate An overview about the Balance of Payments in Vietnam and its challenges The Inflation The definition How to measure the inflation The method applied in the context of Vietnam The influence of the inflation on the exchange rate and the Balance of Payments The overview about the inflation in Vietnam and its problems The exchange rate The definition Why the author choose the exchange rate between VND and USD to study. The impact of the movements of exchange rate on the Balance of Payments and the deficit The overview about the Vietnamese currency regime and the exchange rate between VND and USD in Vietnam The relationship or reciprocal among The exchange rate, the Balance of Payments and the Inflation in the context of developing countries that has the conditions and situations like Vietnam The issue and challenges that Vietnam is facing in the relationships among the exchange rate (USD/VND), the Balance of Payments and the Inflation Significance of the study This study will produce the reader an overview and help them understand more about the relationship or reciprocal among the Balance of Payments, the movements of exchange rate and the Inflation in Vietnam. So, the study will produce significant benefits: The government in Vietnam will have one more useful research paper in the governance of the macro-economy, especially about the control and manage the Inflation, the state of Balance of Payments when the exchange rate moves. The benefit of the study is helping the firms in Vietnam can understand and forecast the inflation and the exchange rate (USD/VND) in Vietnam better. That will help them hedge their incomes and payments in order to reduce the risks. As we know, Inflation causes instabilities and distorts economic decisions; however only unexpected inflation rates causes problems, not anticipated inflation rates. (Evelina M. Tainer, 2006) 3. Research questions and objectives 3.1 Research questions The study will try to answer the following questions in the context of Vietnam: 1. How the exchange rate moves when the state of Balance of Payment is deficit or surplus? 2. How the inflation responds to the movements of exchange rate between USD-VND? The research will not only analyze the movements of the three factors in the past form 1995 to 2010 but also try to produce the main reasons and causes behind the movements. Those will help the readers can have a deep and big view about the relationships between the Balance of Payments the exchange rate (USD-VND); and between the exchange rate (USD-VND) The inflation. 3.2 Research objectives There are two main objectives: 1. Finding common movements of the exchange rate when the Balance of Payments deficit and surplus; and the common respond of the inflation to the movements of the exchange rate. 2. Clarifying the main reasons and causes in those facts. In order to achieve the objective one, the author will collect date from 1995 to 2010; then the data will be examined by employing SPSS or Microsoft Office Excel Next, the second objectives will require more comprehensive academic reading and secondary researches or from some specialists and officers in the government to clarify the deep reasons behind the facts. 4. Research methodology Research design 4.1 research methodology This part will involve in the methodology or procedure to find out the relationship between the three factors in the context of Vietnam. The study will the method involved in secondary data collection, and there may be interviews with some specialists; then the analysis will be used to find the conclusions. 4.2 Research design The author proposes the questions and hypothesis; then the author collected quantitative data and information from secondary resources to analyze and find the answers. The questions and hypothesis come first and guide the process of gathering data. According to what I mention above, I can declare that the epistemology of this research is positivism. The data of this research is analyzed to test the hypotheses. The author is independent from what are being researched. 4.3 Data collection The research method of collecting data in this study is collecting data and information from secondary data sources. The author will collect data for exchange rates between VND and USD, the state of Balance of Payments and the Inflation in Vietnam, the balance of payments in Vietnam and the inflation in Vietnam from 1995 to 2010. The research will collect the date from 1995, because that is the time U.S abolished completely the trade embargo to Vietnam. That influenced international trade in Vietnam and created the relation between the balance of Payments and the exchange rate between USD-VND as well as the impact of the exchange rate on the inflation in Vietnam 5. Time scale This study is divided into four stages and the duration of each stage in particular and that of the study in general are predicted as follows: Stages Working Duration 1 Literature review 4 weeks 2 Collecting Data 6 weeks 3 Data analysis and presentation 4 weeks 4 Conclusion and recommendation 3 weeks It is flexible to change the duration of study subject due to unexpected problems occurring during the research process 6. Resources The research process will be involved in the following resources: A laptop computer to do the study Internet access to collect data and information Online library access to approach academic papers related to the study. The assistance from governments staff to access the date of exchange rates, the inflation index and the state of Balance of payments. Particular, the researcher needs the instructors guidance of how to use software to analyze data such as Microsoft Office Excel or SPSS, or others.

Javier Santana. English 206. May 14, 2017. Death In Romantic

Javier Santana English 206 May 14, 2017 Death In Romantic Poetry Throughout literature, death is a topic that is commonly used though it is spoken of in different ways. This is especially true in romantic literature. This is a time when society was exploring more, discovering more and thinking more. New inventions were being used and new writings became more popular. The romantic period was a time for new ideas in literature and some of these ideas and among some of those thoughts of some writers was life and death. Death is just such an emotional and a unique topic, in that there is no one particular view on death and it has such a significant impact on the living that it was a great topic for the romantics to explore. But every poet saw†¦show more content†¦It’s scary, but it is an inevitable part of life that we all must deal with. This poem is relatable to some if not most people in that it is showing death as something to fear. A common fear is dying before we can achieve our full potential and Keats finds a way to put it int o words. He takes his own fears of not having enough time and puts them into this poem. Conversely, in another of Keats’ poems â€Å"Ode on a Grecian Urn†, he describes a piece of art that is spoken of in admiration. Keats believes that art as beautiful as this or any art for that matter is forever. This artistic expression transcends death itself. â€Å"When old age shall this generation waste, Thou shalt remain, in midst of other woe† (Keats). While everyone around grows old and eventually passes away this art is untouched by the hands of death. The works people leave behind are immortal and will withstand the test of time. Whether it be a sculpture or a poet’s work. Keats is not the only one who sees a death as an opportunity though. In â€Å"On Death†, another of Keats’ poems he speaks of death as a chance to let go of the suffering in this life and find peace in another. In the first line of this poem Keats creates an idea that when we are living, or awake, we are dreaming. â€Å"Can death be sleep, when life is but a drea m, And scenes of bliss pass as a phantom by?†(Keats). I believe he’s saying that we are living in a dreamlike state, where we go by in our everyday lives and every

Managing Church Conflict Free Essays

Managing Church Conflict Conflict within Churches continues to be a problem (Tony Cartledge 2001), and it shows little sign of abating. In fact, the opposite could be much closer to the truth. Perhaps this is why so many in the ministry turn to the writings of Hugh Halverstgadt (2002), a ministry professor from Chicago. We will write a custom essay sample on Managing Church Conflict or any similar topic only for you Order Now In the introduction to his book â€Å"Managing Church Conflicts†, Halverstgadt analyzes the personal and congregational reasons that provide the root causes, which can lead from minor disagreements to outright conflict. His book develops the theme that, as in many areas of life, to sensibly address these problems, ministries and churches globally need to institute a system of conflict management. Leading the reader through a step-by-step conflict management strategy, covering a wide range of typical scenarios, Halverstgadt leads us to his image of peace in churches based upon the notion of Shalom, which promotes the â€Å"right harmonious relationships to other human beings,† (Nicholas Wolterstorff, 1983).   The real question is whether the views held, and the solutions that Halverstgadt promotes to resolve conflict, address the situation. Halverstgadt’s preface asks the question â€Å"can Church conflict be Christian?† and argues that where it degenerates into a â€Å"dirty fighting† scenario, which is not uncommon, this is perhaps not the case. To address this he suggests that ways of turning such disputes into a â€Å"fair† Christian fight need to be found. However, he accepts that there is no need for the Church to fear conflict, provided it is engaged in a manner of fairness. He provides an insight into the reasons conflicts, identifying that essentially the foundation for all conflict is power and that power turns to conflict once its balance is disturbed. Such disturbances can one sector seeks to promote its power in a way that other may perceive would result in a weakening, and therefore limiting or reducing, the power that they think they should enjoy. As, in the case of the Church, most conflicts are deemed centered round power battles within the congregation itself, the book promotes the theory that it falls to the pastor or minister to take on the mantle of conflict manager. It suggests that to successfully take on and execute the role, the manager will needs to reassess their own ideas and beliefs in terms of conflict and their reactions to a situation that arises. In effect, Halverstgadt is looking to the conflict managers to retrain themselves into this new role so that their approach will lead to a solution to the issue that will be acceptable to all of the parties concerned. He acknowledges that the force nature of such a role may be alien to the person, but counsels that as long as they approach it from a position of self-worth, a knowledge that one is a loved member of God’s and the communities family, others will respond positively to them. Part two of â€Å"Managing Church Conflicts† concentrates on the understanding of the issues that have given rise to the conflict, and analyzing these issues and the parties involved into their component parts. One of the first steps advocated is to set rules for the discussion of the conflict, which may mean reorganizing the current ways that existing systems of debates within the Church and its congregation are managed. Often, in conflict situations, both the root causes and indeed the participants in the dispute are not easily identifiable. Therefore, the book suggests that there is a need for the conflict manager to move between the disputing parties and draw them together in conversation that is open and productive. One of the first, and most important, steps in this process includes ensuring that the disagreements move from a â€Å"dirty fighting† stance, which is characterized by its personal direction and content, to an open discussion based upon the foundation of Christian ethics. Haverstadt suggests that it is only once all of these issues have been addressed that the ministry or pastor can move onto the next step, which is the task of managing the conflict and bringing about a resolution that is just, fair and brings about unity once again. Haverstadt further recognizes that managing a conflict situation is no easy task, even for the most experienced conflict manager, and that is has certain limitations. Therefore, in the second part of his book, he sets out a straightforward systematic process for the church mediator to follow.   How they can avoid damaging exchanges between the parties, partially by using the interpretations of faith on the issues, and seeking calmer methods of controlling the discussions. He further discusses ways in which this process should not be limited to just the main protagonists as this could bring about the arising of new conflicts, but include the Church community, so that everyone understands where the process is heading. Furthermore, recognizing that there are issues within the individuals involved that might be better served in private, he suggests that the using of a mentor, or coach, may be beneficial. This gives the individuals the opportunity to discuss those feelings on a personal basis, and to receive comfort and counseling from those appointed to assist them. The desire is that this will lead to a situation where parties can put forward the basis of their strategies and arguments in a positive and clearly defined manner. In the relative calmness of discussion that these moves are hoped to produce, Haverstadt’s book then attempts to deal with the subject of resolution itself, outlining the strengths and weakness of the possibility of trying to reunite the differences or achieving a negotiated settlement acceptable to all. The whole focus or aim of the procedures that Haverstadt’s book promotes is the perception that, by following the guidelines outlined, a position of shalom will be reached. Shalom, in the biblical understanding of the term, a vision which emphasizes the notion of a united, just community bound in pleasant relationships. Although this may seem to exclude discord and diverse viewpoints, as Haverstadt explains, this is not the case. Diversity in the vision of shalom is realized and accepted within an enthusiastic wish to maintain and restore relationships with others using the one abiding link between the congregation, namely their belief in God and the trilogy. Differences in this situation become part of the core strength of the community, rather than the influence that tears the community apart. Result To the extent that the focus of Halverstgadt’s interpretation that the causes of Church conflict are produced by a clashing of power bases, there is little evidence to argue against his findings. If one looks at the development of the Christian Church over the centuries since it’s birth with the death of Christ, the power theory is evidently supported. From a that one focus, Christianity, one has seen it develop into a multi-faceted structure, with the only link, and that somewhat precarious, being the core belief in the trilogy. Catholic, Anglican, Baptist and Methodist, amongst a host of Churches, ostensibly promote the same message, all offering the same vision for the salvation of the human being. Yet, when reflecting about each other, the divisions are obvious, sometimes almost vitriolic in their expression. Historically, it is clearly demonstrated that these divisions resulted from a conflict of power. A typical example is the way in which the King of England separated the Anglican Church from the Church of Rome. Halverstgadt’s promotion of the use of conflict management in an effort to resolve Church conflicts, by providing a calm and common sense vehicle through which issues can be identified and resolved is laudable. Such systems have been used as an integral part of human resource management in business for a number of years, often with much success. However, like all strategies, it has its limitations. Successful conflict management in a community relies upon all the protagonists having the same goals. Business is possibly unique, in that all involved have a tangible focus for conflict management, the business itself. The difference with Church conflicts is that although much of the dispute is about power, it also rests in emotions and non-tangible ideas and beliefs. For example, some of the congregation would promote the idea that the Church should accumulate wealth, so that it can promote its message from a position of strength, others promote the idea that strength of message is better served and more honest from a position of meekness. Conclusion My opinion of this book is that it will serve as a good foundation for dealing with Church conflicts in a number of instances, the main areas to benefit from this good will be concentrated on a parochial basis. At the level where major conflicts occur, as identified in the example of conflict between King of England and the Church of Rome, the power driven differences are too embedded within the psyche of the dominators of the various factions for mediation to be truly successful. In addition, whilst the vision of Shalom is a worthy target for all communities, particularly in Churches, such is the nature of the Human Being that it is unlikely the culmination of this vision will come to fruition. My conclusion therefore is that, whilst the book provides valuable direction from which the Church, its concentration and examples are too localized to make a significant impact upon the area where it is needed most, namely the hierarchy of the various religious sects themselves. References Halverstgadt, Hugh. F. (1992). Managing Church Conflict. Westminster/John Knox Press. U.S. Cartledge, Tony. W.   ed. (2001). Church conflict a common problem. Biblical Recorder. North Carolina. U.S.A. Wolterstorff, Nicholas (1983). Until Justice and Peace Embrace Grand Rapids: Eerdmans. p 70.                How to cite Managing Church Conflict, Essay examples