Central Banks and Monetary Policy Research Paper

Central Banks and Monetary Policy - Research Paper Example There are four main objectives of the central bank such as stable inflation, high and stable real growth, stable interest rates and stable exchange rates (Almoayed Group, 2007).   It will also address how the central bank monitors the money supply and the numerous tools of the monetary control will also be discussed in this study. The most significant part of this research paper is to study the association between price stability as well as other goals of the central bank. The behavior of the monetary aggregates, inflation as well as output in the context of UAE will also be discussed in a detailed way in this study. Last but not the least, the research study will endeavor to review the performance of the UAE central bank and discussion regarding interest rate as well as exchange rate stability in the UAE will be explained in brief. 1. Discuss briefly the five objectives of central banks. In their pursuit of maintaining price stability, central banks are said to manage the money su pply process. The central bank in the United Arab Emirates (UAE) was set up in the year 1980 and is considered to be the chief regulatory as well as the supervisory body with regard to the overall banking industry. The central banks of the UAE are believed to exert increasingly stringent vigilance on the financial institutions. Apart from this, the main objectives of the central banks operating in the UAE region are principally concentrated on issuing currencies, suggesting the government regarding the monetary as well as the financial issues, acting as the last resort lender for the other member banks and likewise, it is held to be responsible for managing the supply of money in the market and ascertain the way an economy operates. The initial objective of the central banks have been identified as being the responsible authority is to set up and preserve financial stability within the economy or rather stable real growth. It is since central banks are known to possess quite inclusi ve information regarding the risks in terms of financial stability with the assistance of its research as well as surveillance activities. The second objective of the central banks has been stated as the exercise of its essential roles for promoting and monitoring the reliability of the various financial institutions, particularly the banks since they are known to enjoy regulatory as well as supervisory control over those institutions. The third main objective of the central banks is the application of their respective tools to make certain of the prevalence of price stability such as the functions related to the open market and the interest rates. The tools are regarded as the effectual instruments for the purpose of manipulating financial stability through the intermediary procedures along with manipulating the aspect of demand with regard to the economy (Almoayed Group, 2007). The fourth objective of the central banks is to discharge its role as the ‘lender of the last reso rt’.

Beef Hormone Crisis Essay Example | Topics and Well Written Essays - 2500 words

Beef Hormone Crisis - Essay Example The future implications of what could turn out to be a drastic exploitation of science are uncertain, but should they prove to be negative, someone will have to be held responsible. Experimentation with hormones has been taking place for approximately fifty years. In the early 1980s the potential use for hormones as growth stimulants in cattle were realised: "A hormone-treated animal gains weight more rapidly, producing a more flavorful and tender product. By reaching market weight sooner, there is a reduction in the cost of beef production. Thus, consumers are provided with a higher quality of meat at lower prices" (A Primer On Beef Hormones). Research intensified in attempts to better understand and ultimately put to use potentially revolutionary procedures in hormone administration. Six hormones became the focus of attention for scientists and agriculturalists alike, three of which occur naturally within humans and animals (estradiol, progesterone and testosterone), and three synthetic hormones (trenbolone acetate, zeranol and melengestrol acetate). As early as 1981, Europe's stance concerning hormones became clear as the European Commission (EC) Council "adopts Directive 81/602 to prohibit the use of hormones, except for therapeutic purposes, but later postpones action on five hormones pending EC study" (Chronology of the EU's hormone ban). The United States adopted a more lenient policy towards the use of hormones as growth stimulants, encouraging the use of both naturally occurring and synthetic hormones as growth stimulants. Problems immediately arose as both parties either side of the Atlantic began to realise the financial implications of their differing views. Finding themselves on the raw end of the deal, in September 1986 the United States "raises EC hormone ban in the Committee on Technical Barriers to Trade ("Standards Code") of the General Agreement on Tariffs and Trade (GATT)", and then early in 1987 "invokes dispute settlement under the Tokyo Round Agreement on Technical Barriers to Trade" (Chronology of the EU's hormone ban). Hence a virtual trade war begins. The main results are a European Commission ban on all U.S. meat, and, in retaliation, one hundred percent tariffs on many millions of dollars worth of EC imports. Following the climax of trade disputes between Europe and the U.S., a relatively quiet period ensued leading up to 1993. The greatest significance of this year was perhaps the development and introduction of a new synthetic hormone, "Posilac", otherwise known as bovine somatotropin. According to its manufacturer, "supplementing dairy cows with bovine somatotropin safely enhances milk production and serves as an important tool to help dairy producers improve the efficiency of their operations" (Posilac; Bovine Somatotropin). Quite clearly the financial potential associated with such a product is considerable, and, just a few years after its introduction into the U.S. market, a new series of appeals arose as the United States bombarded the World Trade Organization (WTO) with complaints that Europe was not complying with International trade law. Canada also joined in the protestations summarised in the Iowa Agricultural Review: In 1996 the United States