Monetary policy in the US Research Paper Example | Topics and Well Written Essays - 2750 words

Monetary policy in the US - Research Paper Example A monetary policy is the number one responsible for the country’s economic progress and the state’s overall development. The country’s monetary policy manages extensively all financial matters that concern the state. Its formulation requires a wide-range of consideration and employs complex economic concepts. Various factors affect the country’s financial condition which in effect impacts the overall development of the monetary system. It is the same with the United States, it takes a careful study and analytical approach when dealing with the monetary policy of the country. A monetary policy is the number one responsible for the country’s economic progress and the state’s overall development. The country’s monetary policy manages extensively all financial matters that concern the state. Its formulation requires a wide-range of consideration and employs complex economic concepts. Various factors affect the country’s financial condition which in effect impacts the overall development of the monetary system. It is the same with the United States, it takes a careful study and analytical approach when dealing with the monetary policy of the country. A monetary policy is the number one responsible for the country’s economic progress and the state’s overall development. The country’s monetary policy manages extensively all financial matters that concern the state. Its formulation requires a wide-range of consideration and employs complex economic concepts. Various factors affect the country’s financial condition which in effect impacts the overall development of the monetary system. It is the same with the United States, it takes a careful study and analytical approach when dealing with the monetary policy of the country. 2. LITERATURE REVIEW There had been numerous texts on the subject of monetary policy published in the past. It ranges from the theory of monetary policy to specific monetary policy applications. Authors like Michael Woodford, V. Chick have written manuscripts on the Theory of Monetary Policy such as the Interest and Prices: Foundations of a Theory of Monetary Policy, and The evolution of the banking system and the theory of monetary policy, respectively. Frederic Mishkin has written a Monetary Policy analysis in Monetary Policy Strategy. Manuscripts about monetary policy in the U.S. had also been published by authors like Richard Timberlake and John Odell. Monetary Policy in the United States: An Intellectual and Institutional History, and U.S. international monetary policy: Markets, power, and ideas as sources of change, respectively. 3. THE RESEARCH 3.1 BACKGROUND OF THE U.S. ECONOMY Today, America is one of the richest countries in the world with a Gross Domestic Product (GDP) per Capita of $48,442 (â€Å"World Bank†). It ranked seventh on Forbes 2012 World’s Richest Countries based on the Purchasing Power Parity Adjusted - GDP per Capita (â€Å"World’s Richest Countries†). In terms of the Gross Domestic Product (GDP) alone, America has the largest national economy in the world. The country currently has a GDP of $14, 657.8 billion which corresponds to almost 25% of the entire world’s GDP (â€Å"2012 Macro-Economic†). The country dominates world’s major industries like electronics, energy and medicine in the form of services, industrial and trading (â€Å"