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Impact of Global Economic Slump in 2008

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Impact of Global Economic Slump in 2008
The impact of the global economic slump on the U.S., with particular emphasis on Jacksonville

MBA Students
Jacksonville University

October 4, 2011

Macroeconomic recessionary forces mire global, national, regional, and local economies
Financial markets wait on the edge of their collective seats for the U.S. Federal Reserve Bank’s Chairman to offer strategic insights into battling the recessionary global economy. All hopes placed on a short statement after each Federal Open Market Committee (FOCM) meeting; but will they take action or merely hint that actions could be taken if needed next month. If the Fed kicks the ball far enough to the right, the Christmas season will be upon us and the national economy will receive a boost from seasonal consumption.
The most recent FOMC meeting produced a highly debated economic strategy touted as “Operation Twist” by the popular press which consists of the Fed buying “$400 billion of U.S. debt with maturities of six to 30 years through June while selling an equal amount of securities due in three years or less” (Eddings & Walker, 2011). While initially met with resistance, as many of the announcements by the FOCM have recently, positive clamor from leading economists now monopolizes the internet news boards. Walker and Eddings cite in their story that long term bond rates have tumbled by as much as 70 basis points in anticipation of the Federal Reserve’s buying spree.
While monetary policy seems to be currently softening the recessionary impact, the Fed has limited tools and ability to impact the flailing global economy.
The Federal Reserve System possesses four basic tools to affect monetary policy; open-market operations, the reserve ratio, the discount rate, and the term auction facility. Using these tools, the Fed can pursue two basic strategies – expansionary and restrictive monetary policy. Since changing the reserve ratio is somewhat of a blunt instrument, and could have undesirable affects on the


References: Amato, P. (Sept. 16, 2011) SAFT Battery Plant Grand Opening on Jacksonville 's Westside. Retrieved from http://www.firstcoastnews.com/news/article/219052/11/Plant-Opening- on-Westside-Draws-Dignitaries--SLIDESHOW Phil Amato Anderson, P Bauerlein, D. (Sept. 21, 2011) Florida barbecue flavor spreads with Jerome Brown 's sauce. Jacksonville.com Retrieved from http://jacksonville.com/business/2011-06- 26/story/florida-barbecue-flavor-spreads-jerome-browns-sauce Brown, A Bureau of Labor Statistics (Sept. 16, 2011) Regional and State Employment and Unemployment – August 2011. USDL-11-1329. Retrieved from http://www.bls.gov/news.release/ laus.nr0.htm Central Intelligence Agency (Sept. 2011) The World FACTBOOK. Guide to Country Comparisons. Retrieved from https://www.cia.gov/library/publications/the-world- factbook/rankorder/rankorderguide.html Commerce, J.R Commission, J.E. (2011) City of Jacksonville. Retrieved from http://www.coj.net/Departments/Jacksonville-Economic-Development- Commission/Docs/Business-Development/business-development-rept-may-07.aspx CoreLogic® (Sept Cornerstone (2009) Statistics of economic growth in Jacksonville. Economic Growth Guide. Retrieved from http://www.expandinjax.com/Files/Data%20Center/About/Economic %20Growth%20Guide%202009-NEW%20TEMPLATE%20(1).pdf Cornerstone. (2010). About Cornerstone. Jacksonville: Retrieved from http://www.expandinjax.com/About/About_Cornerstone.aspx Decision Data (2009) ACCRA Cost of Living Index, 2nd Quarter 2009 Favole, J. (Oct. 1, 2011) Obama Wants Republicans ' Views on Jobs Plan. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB100014240529702 04226204576604414120722204.html Federal Reserve Board (Feb. 17, 2010) Minutes of Board of Governors discount rate meetings. News Events. Retrieved from http://www.federalreserve.gov/newsevents/press/monetary/ monetary20100413a1.pdf Jacksonville (2010). Annual Workforce Report. Jacksonville: City of Jacksonville. Retrieved from http://www.coj.net Jacksonville Port Authority (2010) Retrieved from http://www.jaxport.com/ JAXUSA (Oct. 1, 2011) Logistics and Distribution Corporate Headquarters, Jacksonville and Northeast Florida. Retrieved from http://www.jaxusa.org/Biz_Enviro/Comp_ You_Keep/Corp_Head.aspx Jenkins, L (Oct 1, 2011) Life sciences: a major contributor to economic growth Retrieved from http://www.myjaxchamber.com/news/ne_news_dtl.aspx?param=tEavk0t%2Fcm2TYmv2 OCzkm1Fw6mWQ2wuasLBS2DZof8o%3D Johnson, J.H., & Santos, P National Association of Realtors (Aug. 18, 2011) Existing-Home Sales Down in July but Up Strongly From a Year Ago. Press Room. Retrieved from http://www.realtor.org/ press_room/news_releases/2011/08/july_ehs Shiller, R. (2005) Irrational Exuberance. Second Edition. Broadway Books, a division of Random House, Inc. New York, NY. Stonington, J., & Wong, V U.S. Census Bureau (Sept. 13, 2011) Income, Poverty and Health Insurance Coverage in the United States: 2010. CB11-157. Retrieved from http://www.census.gov/newsroom/ releases/archives/income_wealth/cb11-157.html U. S. Department of Labor (Aug. 2011) Economy at a Glance Jacksonville Florida. Bureau of Labor Statistics. Retrieved from http://www.bls.gov/eag/eag.fl_jacksonville_msa.htm Appendix
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