Dissertation Proposal
Introduction
Development of an individual economy passes through different economic phases. Sometimes it is booming and sometimes it suffers from recession. This phenomenon can be viewed as projection of consumption and investment strategies of the individuals and the government of the country. Interest rate, being a major factor of economics, plays a great role in economic activities carried out by nation and the nationalities. A change in interest rates may affect other factors of the economy. For instance, investment strategies of the investors, consumption strategies of the individuals, foreign exchange, imports, exports etc. are affected by the interest rates. An increase in interest rates may decrease the investment, decrease the consumption, and affect the exchange rates and finally may influence the GDP of the nation. However, the effect of the interest rate on consumption behaviour has been a subject to controversy.
Gross domestic product (GDP), measure of development of the economy, is composed of different factors of the economy such as consumption, investment, government expenditure, import and export. GDP is often correlated with the standard of living. Among these factors, normally consumption occupies a largest chunk. So a change in consumption directly affects the GDP. So, the interest rates, consumption and the GDP are interrelated. Thus, I intend to demonstrate the correlation between ‘interest rates and consumption’ and ‘interest rates and GDP’ of the United Kingdom, in short run, through this dissertation.
Aim: * To identify the correlation between interest rates and consumption in the United Kingdom. * To identify the correlation between interest rates and GDP of the United Kingdom.
Objectives: * To find the relationship between interest rates and exchange rates. * To find the affect of interest rates on public spending. * To find the affect of interest rates on investment. * To identify affect of interest
Development of an individual economy passes through different economic phases. Sometimes it is booming and sometimes it suffers from recession. This phenomenon can be viewed as projection of consumption and investment strategies of the individuals and the government of the country. Interest rate, being a major factor of economics, plays a great role in economic activities carried out by nation and the nationalities. A change in interest rates may affect other factors of the economy. For instance, investment strategies of the investors, consumption strategies of the individuals, foreign exchange, imports, exports etc. are affected by the interest rates. An increase in interest rates may decrease the investment, decrease the consumption, and affect the exchange rates and finally may influence the GDP of the nation. However, the effect of the interest rate on consumption behaviour has been a subject to controversy.
Gross domestic product (GDP), measure of development of the economy, is composed of different factors of the economy such as consumption, investment, government expenditure, import and export. GDP is often correlated with the standard of living. Among these factors, normally consumption occupies a largest chunk. So a change in consumption directly affects the GDP. So, the interest rates, consumption and the GDP are interrelated. Thus, I intend to demonstrate the correlation between ‘interest rates and consumption’ and ‘interest rates and GDP’ of the United Kingdom, in short run, through this dissertation.
Aim: * To identify the correlation between interest rates and consumption in the United Kingdom. * To identify the correlation between interest rates and GDP of the United Kingdom.
Objectives: * To find the relationship between interest rates and exchange rates. * To find the affect of interest rates on public spending. * To find the affect of interest rates on investment. * To identify affect of interest
References: 1. Greet Bekaert and Robert J. H. (2009) “International Financial Management”. Pearson Education. 2. John Maynard Keynes (2008) “The General Theory of Employment, Interest and Money”. BN Publishing. 3. John Sloman and Peter Smith (2006) “ECONOMICS STUDENTS HANDBOOK”. 6th ed. Pearson Education Ltd.