Do the Financial Institutions Affect the Economic Growth of A Region Essay

Do the Financial Institutions Affect the Economic Growth of A Region of Not - Essay Example This theory was the base of Lucas's neutrality-of-money paper. The neoclassical tradition emphasizes that the demand for a product in the market and the quantity supplied determine the employment and labour cost. Milton Friedman had also constructed mechanisms with a similar view. The minor misconceptions in the Friedman's theory were corrected by Lucas by establishing a perfect balance between the "long-run" and the "short-run" non-neutrality essential for money based business cycles. The basis of both their constructs is that money is "exogenous†. They simply mean the central authority handling it can easily determine the constant supply of money. We all know the institution of banking is the above mentioned authority in the modern economy. By analysing the banking sector further, with the Lucas's theory, we will be able to determine whether the modern day money-creating systems lean towards neutrality or non-neutrality of money. Both the scholars did not consider the relatio n of bank assets and money as well as the borrower’s use of these assets. The banking sectors operate actively by investing on assets and lending the profits earned to others. We all know how influential the banking sector innovations can be on the core business management strategies. The best example is the 1985 game of mergers and acquisitions. Schumpeter said, innovation is the base of market power which will provide great temporary powerful positions, but this monopoly power will erode soon. It is true. We see the rise and fall of several banks, boosting the economy of a region considerably and disappearing like a bubble in a short time. The reason for this is, several banks spring up following one successful model, without any proper goal. They are just â€Å"lured imitators† according to Schumpeter and they are the main factors causing the short term monopoly in the market. Certain scholars like Hicks argue these quick profits created by the short term monopolies are quite important to keep the market active, inspired and running. Schumpeter’s innovation concept doesn’t fit the banking sector alone. In fact, they fit all technological and developing sectors. Innovations in finance will increase investments on the other sub sectors, creating a more technically sophisticated world. The role of speculators or middle men who act as a bridge between the financial sectors and the industries requiring investment also plays an important role in determining the actions of the financial institutions. Keynes’s words stating speculators are not mere bubbles, but they are capable of making a whole institution become bubble in the speculation whirlpool is worth consideration. According to Schumpeter strong financial institutions are the base of a countries economic growth, as it is innovative and kindles growth. But, Lucas, Levine and many other authors just considered the role of such organizations like banking have been â€Å"badl y over-stressed† in relations to economical growth of a country. There are some key questions to answer 1. How do the financial institutions emerge and why? 2. Under what circumstances do the financial institutions develop rapidly? 3. Are they really necessary and do they actually affect the money flow of a region or country? Any innovative organization wants more money to grow. They are the drivers behind these financial instit

James Fowlers Stages of Faith Assignment Example | Topics and Well Written Essays - 1250 words

James Fowlers Stages of Faith - Assignment Example It is also the product of a person’s interactions with other people, whether or not these people nurtured the person’s faith or not. Or, it can also be the result of various personal experiences which may or may not resonate with others but had a profound impact on how a person lives life every day. Thus, regardless of whether a person believes in a supreme being, many creators, or not acknowledging the importance of divine entities, faith is the driving force for people to commit and to move their ways through life’s hardships, trials, and times of happiness and joy (â€Å"Stages of Faith† 4). Fowler’s stages of faith are not a measurement of how good a person is in whatever religion or belief system one belongs to, and that it is only a measurement and approximation of one’s thought patterns with respect to a Higher Being, whether these are complex or simple for one’s age (Fowler and Dell 40). ... s similar to what others believe as well, which in turn makes them think that what they believe in is something common that everyone else thinks of as well (â€Å"Stages of Faith† 153). Also, it has been previously mentioned that many people become stable in this stage and grow quite comfortable with the ceremonial aspects of their religions, accepting everything without question and doubts. However, this is also a stage where the believers can also be harshly critical and judgmental of others whom they believe do not share the same ideas with them, and this can lead to negative reactions and feedback from these â€Å"other† people (152). This is typically due to the fact that people in this stage are not liable to think outside the box, and that doing so makes them feel unworthy and sinful due to questioning their religious leaders and in turn, makes them question God. Such ideas are exemplified in a case study of an acquaintance, and despite the age of late twenties s till seems to be in the synthetic-conventional stage of faith: Marlene (not her real name) has been an active member of the local Catholic Church for as long as she can remember. When she was younger, she attends church with her family every Sunday and every Feast Day, and was a member of the children’s choir who actively participates in each practice session. As she grew older, she also became involved in catechism sessions for younger children before receiving their first holy communion, and she also participates in Sunday schools whenever possible. This was her routine habit until she left to study college in another state. She had many friends and acquaintances in university, and they say that she was a hard-worker and a dedicated student, aside from being their go-to friend whenever they have