That Use to Be Us
The four challenges described in “That Used To Be Us” deal with adapting to globalization, adjusting to the IT revolution, learning how to cope with the large and soaring budget deficits stemming from the growing demand on government at every level and how to manage a world of both rising energy consumption and rising climate threats. Being in the finance field, most of these challenges will have some affect on me in which I will go in depth about.
In terms of adapting to globalization, it has not materially affected the ability of the Federal Reserve to influence financial conditions in the United States. One direct effect of globalization on the Federal Reserve operations has been to increase the time and attention devoted to following and understanding developments in other economies, the world trading system, and global capital markets. The Federal Reserve is continuing to place high priority on understanding the effects of globalization on our economy and monetary policy. Due to the increasing pressure of international competition in trade markets as well as the increased mobility of capital and multi-national corporations, states are incentivized to cut labour costs, to reduce the price of goods and services, reduce taxation to make their domestic market more competitive, and to decrease the size and scope of the welfare state.
The rate at which new technology is being adopted varies across countries and regions. Financial markets in developed countries may already have considerable information technology infrastructure, but this may hinder the development of new technology as well as promote it. Financial institutions in the United States have huge investments in legacy systems that are very stable and inexpensive to operate now that they have been fully depreciated. The availability of these legacy systems may impede the introduction of new services.
The global integration of information technology may be quite a novel
In terms of adapting to globalization, it has not materially affected the ability of the Federal Reserve to influence financial conditions in the United States. One direct effect of globalization on the Federal Reserve operations has been to increase the time and attention devoted to following and understanding developments in other economies, the world trading system, and global capital markets. The Federal Reserve is continuing to place high priority on understanding the effects of globalization on our economy and monetary policy. Due to the increasing pressure of international competition in trade markets as well as the increased mobility of capital and multi-national corporations, states are incentivized to cut labour costs, to reduce the price of goods and services, reduce taxation to make their domestic market more competitive, and to decrease the size and scope of the welfare state.
The rate at which new technology is being adopted varies across countries and regions. Financial markets in developed countries may already have considerable information technology infrastructure, but this may hinder the development of new technology as well as promote it. Financial institutions in the United States have huge investments in legacy systems that are very stable and inexpensive to operate now that they have been fully depreciated. The availability of these legacy systems may impede the introduction of new services.
The global integration of information technology may be quite a novel
References: Bertho, M., Crawford, B., & Fogarty, E. A. (2008). The impact of globalization on the United States. Westport, Conn.: Praeger. Global climate change impacts in the United States: a state of knowledge report. (2009). Cambridge [England: Cambridge University Press. Santow, L. J. (1988). The budget deficit: the causes, the costs, the outlook. New York, N.Y.: New York Institute of Finance. Wilbanks, T. J. (2007). Effects of climate change on energy production and use in the United States. Washington, DC: U.S. Climate Change Science Program.