Tuesday, April 21, 2009
Weather Forecast
| Washington, DC |  | 55° |
| Toronto, CAN |  | 45° |
| Sydney, AUS | | 67° |
| St. Louis, MO |  | 57° |
| Seattle, WA |  | 64° |
| San Diego, CA |  | 90° |
| Salt Lake City, UT | | 64° |
| Portland, OR | | 79° |
| Phoenix, AZ |  | 93° |
| Philadelphia, PA | | 54° |
| Paris, FRA |  | 48° |
| Orlando, FL | | 72° |
| Moscow, RUS |  | 31° |
| Minneapolis, MN | | 50° |
| Milwaukee, WI | | 41° |
| London, GBR | | 45° |
| Madrid, ESP |  | 45° |
| Memphis, TN |  | 63° |
| Dallas, TX | | 66° |
| Delhi, IND | | 88° |
| Columbus, OH | | 55° |
| Charlotte, NC | | 66° |
| Cairo, EGY | | 61° |
| Buenos Aires, ARG | | 59° |
| Boston, MA |  | 45° |
| Indianapolis, IN |  | 57° |
| Beijing, CHN | | 56° |
| Atlanta, GA | | 64° |
| Denver, CO | | 48° |
| Anchorage, AK | | 45° |
| New York, NY | | 73° |
| Miami, FL | | 73° |
| Honolulu | | 81° |
| Chicago, IL | | 72° |
| Las Vegas, NV | | 81° |
| San Francisco, CA | | 70° |
| Los Angeles, CA | | 79° |
| Tokyo, JPN | | 58° |
| Rome, ITA | | 54° |
Wednesday, March 25, 2009
Measurement of Value
But modern value theory has a different starting point. It conceives of value as the significance attributed to individual commodity units by a human being who wishes to consume or otherwise dispose of various commodities to the best advantage.
Every economic transaction presupposes a comparison of values. But the necessity for such a comparison, as well as the possibility of it, is due only to the circumstance that the person concerned has to choose between several commodities. It is quite irrelevant whether this choice is between a commodity in his own possession and one in somebody else's possession for which he might exchange it, or between the different uses to which he himself might put a given quantity of productive resources.
In an isolated household, in which (as on Robinson Crusoe's desert island) there is neither buying nor selling, changes in the stocks of goods of higher and lower orders do nevertheless occur whenever anything is produced or consumed; and these changes must be based upon valuations if their returns are to exceed the outlay they involve.
The process of valuation remains fundamentally the same whether the question is one of transforming labor and flour into bread in the domestic bakehouse, or of obtaining bread in exchange for clothes in the market.
From the point of view of the person making the valuation, the calculation whether a certain act of production would justify a certain outlay of goods and labor is exactly the same as the comparison between the values of the commodities to be surrendered and the values of the commodities to be acquired that must precede an exchange transaction.
For this reason it has been said that every economic act may be regarded as a kind of exchange
Every economic transaction presupposes a comparison of values. But the necessity for such a comparison, as well as the possibility of it, is due only to the circumstance that the person concerned has to choose between several commodities. It is quite irrelevant whether this choice is between a commodity in his own possession and one in somebody else's possession for which he might exchange it, or between the different uses to which he himself might put a given quantity of productive resources.
In an isolated household, in which (as on Robinson Crusoe's desert island) there is neither buying nor selling, changes in the stocks of goods of higher and lower orders do nevertheless occur whenever anything is produced or consumed; and these changes must be based upon valuations if their returns are to exceed the outlay they involve.
The process of valuation remains fundamentally the same whether the question is one of transforming labor and flour into bread in the domestic bakehouse, or of obtaining bread in exchange for clothes in the market.
From the point of view of the person making the valuation, the calculation whether a certain act of production would justify a certain outlay of goods and labor is exactly the same as the comparison between the values of the commodities to be surrendered and the values of the commodities to be acquired that must precede an exchange transaction.
For this reason it has been said that every economic act may be regarded as a kind of exchange
Saturday, March 21, 2009
Cycles or fluctuations?
In recent years economic theory has moved towards the study of economic fluctuation rather than a 'business cycle' - though some economists use the phrase 'business cycle' as a convenient shorthand.
For Milton Friedman calling the business cycle a "cycle" is a misnomer, because of its non-cyclical nature. Friedman believed that for the most part, excluding very large supply shocks, business declines are more of a monetary phenomenon.
Rational expectations theory states that no deterministic cycle can persist because it would consistently create arbitrage opportunities. Much economic theory also holds that the economy is usually at or close to equilibrium. These views led to the formulation of the idea that observed economic fluctuations can be modeled as shocks to a system.
In the tradition of Slutsky, business cycles can be viewed as the result of stochastic shocks that on aggregate form a moving average series.
For Milton Friedman calling the business cycle a "cycle" is a misnomer, because of its non-cyclical nature. Friedman believed that for the most part, excluding very large supply shocks, business declines are more of a monetary phenomenon.
Rational expectations theory states that no deterministic cycle can persist because it would consistently create arbitrage opportunities. Much economic theory also holds that the economy is usually at or close to equilibrium. These views led to the formulation of the idea that observed economic fluctuations can be modeled as shocks to a system.
In the tradition of Slutsky, business cycles can be viewed as the result of stochastic shocks that on aggregate form a moving average series.
Floating exchange rate
A floating exchange rate or a flexible exchange rate is a type of exchange rate regime wherein a currency's value is allowed to fluctuate according to the foreign exchange market. A currency that uses a floating exchange rate is known as a floating currency. The opposite of a floating exchange rate is a fixed exchange rate.
Roles and Responsibilities
The main functions of the Bangko Sentral are:
- Liquidity Management, by formulating and implementing monetary policy aimed at influencing money supply, consistent with its primary objective to maintain price stability,
- Currency issue; the BSP has the exclusive power to issue the national currency. All notes and coins issued by the BSP are fully guaranteed by the Government and are considered legal tender for all private and public debts,
- Lender of last resort, by extending discounts, loans and advances to banking institutions for liquidity purposes,
- Financial Supervision, by supervising banks and exercising regulatory powers over non-bank institutions performing quasi-banking functions,
- Management of foreign currency reserves, by maintaining sufficient international reserves to meet any foreseeable net demands for foreign currencies in order to preserve the international stability and convertibility of the Philippine peso,
- Determination of exchange rate policy, by determining the exchange rate policy of the Philippines. Currently, the BSP adheres to a market-oriented foreign exchange rate policy, and
- Being the banker, financial advisor and official depository of the Government, its political subdivisions and instrumentalities and GOCCs.
- Reasonably responsible for the faults of the people behind it get the blame of the opposition to which it is grouped.
Bangko Sentral ng Pilipinas (Central Bank of the Philippines)
The Bangko Sentral ng Pilipinas (BSP) is the Central bank of the Republic of the Philippines. It was rechartered on July 3, 1993, pursuant to the provisions of the 1987 Philippine Constitution and the New Central Bank Act of 1993. The BSP was established on January 3, 1949, as the country’s central monetary authority.In 1900, the First Philippine Commission passed Act No. 52, which placed all banks under the Bureau of the Treasury and authorizing the Insular Treasurer to supervise and examine banks and all banking activity. In 1929, the Department of Finance, through the Bureau of Banking, took over bank supervision.
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