La crisis global (inglés-español)

The Global crisis has really felt nowadays, not only by third world countries but also by the richer and industrialized countries causing disturbances happening in different parts of the world by people who want change and a better life. Even in our country, the crisis is getting heavier each day. But then the real question is not the “what”, but more so, the “how”. How do we really solve this problem?

“The international community must take a collective stand to create a new global growth model based on stable economies, social equality, decent job opportunities and greater financial regulation to tackle the ongoing global economic crisis”(un.org). The Federal Reserve is the central bank of USA and it devices and regulates the monetary policy that interferes, when a country is facing recession, and slows down country's economy. The county may face a reduction in growth in GDP and increase in unemployment, and the usage of Federal Reserve’s monetary policy can be used to handle recession. "Monetary Policy involves changes in the base rate of interest to influence the rate of growth of aggregate demand, the money supply and ultimately price inflation” (Amadeo, 2013). Thus, monetary policy determines supply of money and cost of money but I will recommend the usage of the expansionary monetary policy. It is a policy which aims at easing the money supply. This is primarily done to increase economic growth and improve the liquidity situation (Robb, 2012). Fed can achieve this by:-Decreasing the Fed funds rate

La crisis global realmente se ha sentido hoy en día, no solo por los países del tercer mundo sino también por los países más ricos e industrializados, provocando disturbios en diferentes partes del mundo por personas que quieren un cambio y una vida mejor. Incluso en nuestro país, la crisis se agrava cada día más. Pero entonces la verdadera pregunta no es el "qué", sino más aún, el "cómo". ¿Cómo solucionamos realmente este problema?

“La comunidad internacional debe tomar una posición colectiva para crear un nuevo modelo de crecimiento global basado en economías estables, igualdad social, oportunidades de trabajo decente y una mayor regulación financiera para hacer frente a la actual crisis económica global” (un.org). La Reserva Federal es el banco central de EE. UU. Y maneja y regula la política monetaria que interfiere cuando un país se enfrenta a una recesión y ralentiza la economía del país. El condado puede enfrentar una reducción en el crecimiento del PIB y un aumento en el desempleo, y el uso de la política monetaria de la Reserva Federal puede usarse para manejar la recesión. "La política monetaria implica cambios en la tasa de interés base para influir en la tasa de crecimiento de la demanda agregada, la oferta monetaria y, en última instancia, la inflación de precios" (Amadeo, 2013). Por lo tanto, la política monetaria determina la oferta de dinero y el costo del dinero, pero lo haré recomendar el uso de la política monetaria expansiva. Es una política que tiene como objetivo aliviar la oferta monetaria. Esto se hace principalmente para aumentar el crecimiento económico y mejorar la situación de liquidez (Robb, 2012). La Fed puede lograr esto: -Disminuyendo la Fed. tasa de fondos

-Decrease in Reserve requirements

-Open Market operations: Buying of Government securities (Robb, 2012).

Decrease in Fed funds rate, reserve requirements will lead to decrease in cost of money

and increase in the liquidity of the money. This will lead to improvement in money supply and

aggregate demand of economy. Hence, quantitative easing involves reducing funds rate, reserve

requirements and buying bonds. The Fed should continue with the quantitative easing as US

economy and the global economy is still struggling and is in recession mode. “The FOMC can

change the Fed funds rate to control inflation, while maintaining healthy economic growth. The

FOMC members watch economic indicators determine if the economy is speeding up inflation or

slowing down recession. The key indicator for inflation is the core inflation rate and the most

important indicator in predicting a slowdown is the durable goods report” (Amadeo, 2013).

Furthermore, the Fed has several tools to diffuse the money supply that can help achieve

the Fed funds rate; in which, bank charges their rate each other for their overnight deposits. The

Fed requires banks to maintain a certain amount of their deposits in reserve at their local Federal

Reserve branch office every night and for those banks that have extra reserve can lend their

excess for the banks that do not have enough (Amadeo, 2013). When the Fed minimizes the

target rate, then it becomes more economical for banks to maintain their reserves, leaving them

with more money to lend. As a result, banks can lower the interest rates they charge their

customers. If this doesn't sufficiently stimulate the economy, the Fed will manage for its next

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