UNITED STATES FEDERAL RESERVE1
United States Federal Reserve
Following the Guidelines of the American Psychological Association
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Introduction
For this essay I will write a 1,050-word report in which I select a company I am familiar with or a company where I currently work, and do the following: evaluate the internal and external environments of my selected company using an environmental scan, analyze the competitive advantage of my selected company, evaluate the strategies my selected company uses to create value and gain competitive advantage, examine the measurement guidelines my selected company uses to verify its strategic effectiveness and evaluate the effectiveness of the measurement guidelines my selected company uses.
Although the United States Federal Reserve would not typically be considered your typical company in the United States of America, it still holds a lot of importance as a corporation of the United States with much power that I would like to choose as my company to examine for this essay. This assignment had no specific guidelines on restrictions of companies that could be used, thus my choice of a company or government corporation is the United States Federal Reserve. My company will be the United States Federal Reserve and how through an analysis based on the points above, a clearer understanding of how this government/company entity functions will be understood.
My essay will be in accordance of American Psychological Association (APA) guidelines and I will cite three scholarly sources. First I will begin with the internal and external environments of the United States Federal Reserve.
Internal and External Environment of the United States Federal Reserve
In this section I will analyze first the internal environment of the United States Federal Reserve followed by the external environment.
According to Atkeson Ohanian (2001) the United States Federal Reserve they state that the United States Federal Reserve aims to calculate inflation which the United States Federal Reserve aims to monitor for the country of the United States based on something called the Phillips curves. These Phillips curves are analyzed to calculate on a monthly basis the fluctuations in the market and how this affects the rate of inflation for the entire country of the United States (Atkeson Ohanian, 2001). According to Atkeson Ohanian (2001), this analysis of the Phillips curve was used on the Bank of Minneapolis in their research to understand from the local of one state how the Phillips curve was affecting the internal environment of one state within the whole country of the United States.
The research of Atkeson & Ohanian (2001) did not predict the financial crisis that would hit the United States in 2010 and years surrounding it, as did the timely research at that time of Baker (2010). Baker (2010)’s research discusses how the global economic crisis during the time of 2010 and the years surrounding it hit the internal environment of the United States Federal Reserve hard as well as affected all Americans. Many Americans lost their homes, thus many of them losing their jobs to companies shutting down because of the fiscal disaster at that time, plus the financial markets surrounding that time period of Baker’s research (2010) was so dismal that even the former President Barack Obama needed to bail out the once top banks in the world on Wall Street (Baker, 2010). All of these internal factors put the United States Federal Reserve in a constant state of flux during this period (Baker, 2010) and the Phillips curve was extremely high to rate the high inflation rate at that time period in the United States (Atkeson Ohanian, 2001).
Also focusing again on the financial crisis in the United States in the years surrounding 2010 (Baker, 2010) that greatly affected the internal environment of the United States Federal Reserve was the internal migration of Americans within the country of the United States to try to improve their economic situations through better work situations and better housing opportunities in parts of the United States that were not as badly hit by the economic depression roughly between the years of 2008 to 2014 (Molloy, Smith & Wozniak, 2011).All of these factors of migration as well also affected the internal environment of the United States Federal Reserve. Next, I will discuss the external environment of the United States Federal Reserve.
Some of the external factors that are present with the United States Federal Reserve according to scholarly sources are the business it does with other countries such as Latin America and Japan (Calvo, Leiderman & Reinhart, 1993; Peek & Rosengren, 2000). In 1993, Latin America began benefiting greatly with a higher exchange rate with the American dollar, as well as increased capital flow within the continent due to its business relationship with the United States Federal Reserve (Calvo, Leiderman & Reinhart, 1993). In comparison, seven years later after the research of Calvo, Leiderman & Reinhart (1993), there was an unfortunate financial crisis in Japan which greatly affected the United States Federal Reserve’s markets globally and its external environment (Peek & Rosengren, 2000).Again with positive news, the external environment of the United States Federal Reserve has done much outreach towards the young people of America to educate them about the importance of financial matters which has created a positive external environment of more financial awareness among young people in America (Johnson & Sherraden, 2007). The efforts of the United States Federal Reserve to educate young people towards financial matters is spreading throughout the world and other countries such as Canada, parts of Europe, Australia and China are also following the lead of the United States Federal Reserve to educate their young people towards the value of money and how to best use it in their lives which shows a positive external role that the United States Federal Reserve is taking on an internal scale (Johnson & Sherraden, 2007). Next, I will analyze the competitive advantage of the United States Federal Reserve.
Competitive Advantage of the United States Federal Reserve
In this section I will discuss the role of the United States Federal Reserve in terms of its competitive advantage as a corporate entity governed by the United States of America. The issues that will be discussed the power of the United States dollar bills, the population power of the United States of America, and how competitive the United States Federal Reserve is in the role of global banking. First, I will begin with the power of the United States Dollar.
According to Blinder (1996) the United States Dollar (USD) does have its dips and falls on the international market, however its competitive advantage on the international market tends to remain consistent and strong over many, many decades since the 20th century of the world, as well as after World War II. Next, I will discuss the population power of the United States of America and how this affects the competitive advantage of the United States Federal Reserve.
According to Carlino, Chatterjee & Hunt (2007), the urban density and high market value of American companies, businesses and enterprises, whether they be banks that are governed by the United States Federal Reserve, computer organizations or infrastructure, state governmental practices, the food industry, the housing industry, the automobile industry or the market for education, the high urban density that tends to be characteristic of the United States puts the United States Federal Reserve at a competitive factor globally in comparison to such countries such as Greenland and their banking industry with a population of approximately 55,000 when converted into American dollars is the average salary of an American in the United States. This leads naturally into a discussion of the United States Federal Reserve’s power on an international scale.
According to Saunders & Walter (1994), the United States Federal Reserve is one of the most powerful countries in the world when it comes to the international and global banking industry. It is for the reasons already mentioned such as the power of the USD and its population mass that account for this, plus many more reasons (Saunders & Walter, 1994). This section also responds to the question about how the United States Federal Reserve adds value and gains the competitive advantage. Next, I will discuss the measurement guidelines that the United States Federal Reserve uses to monitor themselves as a government corporation.
Measurement Factors of the United States Federal Reserve
In this section I will be discussing the measurement factors that the United States Federal Reserve uses in order to monitor its effectiveness. The issues that will be discussed are job creation or lack thereof, the Depressions that have affected the United States and its Federal Reserve and the tax rate. First, I will discuss job creation or lack thereof with the United States of America.
One of the ways that the United States Federal Reserve monitors who well the markets in the United States are on whether or not Americans are working, Americans are thriving and essentially if Americans are making money and/or being able to survive above the poverty line (Davis, Haltiwanger & Schuh, 1998) in comparison to the Phillips curve discussed earlier that monitors the inflation rate (Atkeson Ohanian, 2001). If Americans are working and the unemployment is rate or non-existent in a perfectionistic world, then the United States Federal Reserve would know that their job is going well because this means there is money in America (Davis, Haltiwanger & Schuh, 1998). Next, I will discuss the Great Depressions of the 20th century.
According to Kehoe & Prescott (2002) another way that the United States Federal Reserve monitors its effectiveness is how well the economy is doing. The Great Depressions that have affected the United States during the 20th and also 21st centuries have greatly affected the reputation and the business position of the United States Federal Reserve (Kehoe & Prescott, 2002). These depressions have effectively put the United States Federal Reserve in a tail spin when they happen and the resulting factors is that the Federal Government of the United States of America at all of the particular given times of a Great Depression in the United States, which also tends to happen globally, have taught the United States Federal Reserve many lessons to help avoid such Depressions in the financial market in the United States from happening again (Kehoe & Prescott, 2002).Next, I will discuss the tax rate and how it serves as a measurement for the United States Federal Reserve.
According to Mendoza, Razin & Tesar, 1994) a good tax rate for Americans means that the United States Federal Reserve is again doing a good job and the books are close to balancing for this financial company because then they do not need to tax Americans in a high manner in order to pay for overspending or any misdeeds of the government. Next, I will conclude this essay.
Conclusion
For this essay I wrote a 1,050-word (or more) report in which I select a company I am familiar with or a company where I currently work, and do the following: evaluate the internal and external environments of my selected company using an environmental scan, analyze the competitive advantage of my selected company, evaluate the strategies my selected company uses to create value and gain competitive advantage, examine the measurement guidelines my selected company uses to verify its strategic effectiveness and evaluate the effectiveness of the measurement guidelines my selected company uses.
Although the United States Federal Reserve would not typically be considered your typical company in the United States of America, it still holds a lot of importance as a corporation of the United States with much power that I chose as my company to examine for this essay. This assignment had no specific guidelines on restrictions of companies that could be used, thus my choice of a company or government corporation is the United States Federal Reserve. My company was the United States Federal Reserve and how through an analysis based on the points above, a clearer understanding of how this government/company entity functions will be understood.
My essay was in accordance of American Psychological Association (APA) guidelines and I cited at least three scholarly sources. First I began with the internal and external environments of the United States Federal Reserve.
References
Atkeson, A., & Ohanian, L. E. (2001). Are Phillips curves useful for forecasting inflation?Federal Reserve Bank of Minneapolis. Quarterly Review-Federal Reserve Bank of Minneapolis, 25(1), 2.
Baker, A. (2010). Restraining regulatory capture? Anglo‐America, crisis politics and trajectories
of change in global financial governance. International Affairs, 86(3), 647-663.
Blinder, A. S. (1996). The role of the dollar as an international currency. Eastern Economic
Journal, 22(2), 127-136.
Calvo, G. A., Leiderman, L., & Reinhart, C. M. (1993). Capital inflows and real exchange rate
appreciation in Latin America: the role of external factors. Staff Papers, 40(1), 108-151
Carlino, G. A., Chatterjee, S., & Hunt, R. M. (2007). Urban density and the rate of invention.
Journal of Urban Economics, 61(3), 389-419.
Davis, S. J., Haltiwanger, J. C., & Schuh, S. (1998). Job creation and destruction. MIT Press Books, 1.
Johnson, E., & Sherraden, M. S. (2007). From Financial Literacy to Financial Capability Among
Youth. J. Soc. & Soc. Welfare, 34, 119.
Kehoe, T. J., & Prescott, E. C. (2002). Great depressions of the 20th century. Review of Economic Dynamics, 5(1), 1-18.Mendoza, E. G., Razin, A., & Tesar, L. L. (1994). Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption. Journal of Monetary Economics, 34(3), 297-323.
Molloy, R., Smith, C. L., & Wozniak, A. (2011). Internal migration in the United States. The
Journal of Economic Perspectives, 25(3), 173-196.
Peek, J., & Rosengren, E. S. (2000). Collateral damage: Effects of the Japanese bank crisis on
real activity in the United States. American Economic Review, 30-45.
Saunders, A., & Walter, I. (1994). Universal banking in the United States: What could we gain?
What could we lose?. Oxford University Press.