IS-LM FrameWork

Assalamu Alikum All,

Attacheched with this post a powerpoint presentation that will surely Insha’Allah help you all understanding some points on the monetary and fiscal policy and their consequences.

My Regards

monetary-fiscal-policy-islm-framework

Thank You All

Assalamu Alikum,

Really I don’t know how to thank you all for the great efforts carried through out the previous week and during what we can call STAGE 1 of our group work. I really appreciate the efforts of each one, one by one, boys and girls.

I wrote this post to share and express my feelings with you all and I will not accept anything less than sharing yours all one by one and replying back with all your comments, feedbacks and valued additions on all what we all did, what we all particpated with and what we all can do to improve and enrich our efforts during the new stage, STAGE 2 which will be occuring from now till the next lecture Insha’Allah.

My Best Reagrds and Wishes,

Anas.

The Standards: Conclusions

Assalamu Alikum,

Thanks to all those that came and participated with us since the last week and their efforts are really much appreciated. I would like to say that we started something that is completely new in our department and the honor and achievement of doing it for the first time will be related back to us. We all deserve it and may Allah Help us in doing it to the end.

In this post, I concluded all the most valued comments that I believe were near to what we were looking for so as to continue working on them. I would be very happy if anyone refers me to any comment which I mistakenly skiped.

I hope that we now focus on just adding under this comments and enriching them with more valued comments and please, NEVER ADD INDICATORS AGAIN BECAUSE THEY ARE MUCH THAN WE NEED.

My Regards,

Anas Elshamy.

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The Economic Growth Report

A much valued comment was added by Mahmoud which contains the following:

s3 ,
In order to determine the standard growth rate for countries in the take-off stage we should search the net for the standard growth rate .And I tried to do so ,and unfortunately I didn’t find any :S ,
So the other option in my opinion is that we can read about each country’s economy and see if they lie or satisfy the conditions of the take-off stage or not. And start to know the average growth rate of those countries ( ex. 10 countries that lie in the take-off stage.)
And in order to do so we should know more about the take-off stage :

Take-off occurs when there is a sector that leads growth becomes common and society is driven more by economic processes than traditions.

So the keyword here is “Transition” from tradition to economic processes .

we should also know the conditions of the take-off stage :

1: the first and essential condition for take off is a rise in the rate of productive investment from say five percent or less to over ten percent of national income. In other words the percentage rate of investment must be five or six times greater than the percentage increase in population.

2: The second condition for take off is the development of one or more leading sectors in the economy. According to Rostow, the rapid growth of the leading sector depends on the presence of four basic factors.

First: there must be an increase in the effective demand of their products.
Second: a new production function along with an expansion of capacity must be introduced into these sectors.
Third: there must be sufficient initial capital and investment profits for the take off in these leading sectors.
Lastly: these leading sectors must introduce expansion of output in other sectors through technical transformation.

NOTE : https://www.cia.gov/library/publications/the-world-factbook/geos/ag.html#Econ
this link provides summarized details about countries economies ,hope it can help you.

About countries that could be in the take-off stage :
1:_ALGERIA
Where the Algerian economy depends mostly in the hydrocarbon sector (satisfying the 2nd condition) trying to increase foreign and domestic investment in more than one sector (satisfying the 2nd condition ).
Algeria’s investment %of GDP is =24.5 % ,which is 20 times the rate of increase in population (i.e satisfying the 1st condition ).
It’s growth rate is 4.5 %..
2:_PERU..

PLEASE, CONTINUE FROM WHERE HE STOPPED AND DISCUSS IF HE MISSED ANYTHING.

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The External Debt Report

Anas added the following comment:

Some points that may be of value:

- For most countries, a country’s debt is deemed to be ‘unsustainable’ if the net present value of its total external debt is more than 150% of its average exports.

- For countries which are exceptionally open (with an export-to-GDP ratio of more than 30%) and with a very high debt in relation to fiscal revenues despite a relatively good revenue performance (above 15% of GDP) a debt to revenue criteria is applied. For these countries, the debt sustainability target is set so that the net present value of debt is at 250% of revenues at the decision point.

PLEASE, CONTINUE FROM WHERE HE STOPPED AND DISCUSS IF HE MISSED ANYTHING.

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The Balance Of Payments Report

A much valued comment was added by Abeer which contains the following:

definition of the balance of payments intended to measure a country’s ability to meet its obligation to exchange its currency for other currencies or for gold at fixed exchange rates. To meet this obligation, countries maintained a stock of official reserves, in the form of gold or foreign currencies, that they could use to support their own currencies. A decline in this stock was considered an important balance-of-payments deficit because it threatened the ability of the country to meet its obligations. But that particular kind of deficit, A country is more likely to have a deficit in its current account the higher its price level, the higher its gross national product, the higher its INTEREST RATES, the lower its barriers to imports, and the more attractive its investment opportunities—all compared with conditions in other countries—and the higher its exchange rate. The effects of a change in one of these factors on the current account balance cannot be predicted without considering the effect on the other causal factors. Contrary to the general perception, the existence of a current account deficit is not in itself a sign of bad economic policy or bad economic conditions. If the United States has a current account deficit, all this means is that the United States is importing capital. And importing capital is no more unnatural or dangerous than importing coffee. The deficit is a response to conditions in the country. It may be a response to excessive INFLATION, to low PRODUCTIVITY, or to inadequate SAVING. It may just as easily occur because investments in the United States are secure and profitable. Furthermore, the conditions to which the deficit responds may be good or bad and may be the results of good or bad policy; but if there is a problem, it is in the underlying conditions and not in the deficit per se.

PLEASE, CONTINUE FROM WHERE SHE STOPPED AND DISCUSS IF SHE MISSED ANYTHING.

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The inflation Report

Nothing yet was brought up although we talked much about Inflation!!!

Hope u get it…

Hey Guys…

really i want 2 tell u how dr. ghars idea is a brilliant one.. that he wanted us 2 write a 2 pages report ..and no one can do it except if he really got the idea of this subject (ya3nee lazem nb2a sharbeeen el mawdooo3 3ashan tela5aso fe wara2teeen) and let the doctor get the idea and get that u really got the subject BY GETTING THE effective WORDS…

So now all our effort is to read about the subject as much as u can and understand all about it so that u can talk freely about them without copying & pasting..

It is big advantage for us 2 really get the whole view of these subjects they r economic basis in any lesson…w dr. el marakby subject is covering most of these topics. His banflets will b a great help & the links we r giving too…but please u must understand dont just copy & paste that is for the best..

Also,, if u r really getting my point.. the MACRO book OF THE SECOND YEAR is a big help…u can study the IS-LM model & i didnt go all through it yet but it also include BOP & INFLATION & EXTERNAL DEBT…and after reading all the info we r getting i think by the end of the week we will have a good points to write about..but TAKE CARE..WE GOT VERY VERY SHORT TIME…

DO ALL UR BEST

Aya Ayman

البقاء لله

إنا لله و إنا إليه راجعون

يا جماعة , إنتقلت إلى رحمة الله تعالى النهاردة الصبح

والدة زميلتنا / دينا سعيد

يا ريت يا جماعة تدعولها بالرحمة و المغفرة و إن ربنا يدخلها الجنة

و إن ربنا يصبر أهلها و خصوصاً زميلتنا دينا

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تنبيه مهم

يا ريت يا جماعة نتقابل بكرة الحد الساعة 5 المغرب

عند صقر قريش

عشان نروح العزاء كلنا إن شاء الله

و يا ريت ما حدش يتأخر

إنا لله و إنا إليه راجعون

Important Notification

Assalamu Alikum All,

Please I notify you all for something very important: Dr. Ghars asked us to gather information and data on Standards and Indicators.

Let us leave Indicators aside now as its data is very simple and easy and can be brought and let me assure you, they are ready with me now if you want.

Let us focus on Standards as I think they are the most important thing as based on them, the remaining elements in any report will be easy to do.

Please, let us start focusing on the standards to set for each topic and know how to get them.

For example, in the topic of Balance of Payments, let us study and get information on how to know which is better for an economy; a balanced, surplus or deficit in BOP? What are the standards for a well organized BOP and when can we say that the current situation of the BOP of a country do not have a negative effect on its economic growth?

I hope that the point I wanted to clarify reached to you all and am waiting for your feedback.

My Regards.

Notifications & Comments

Assalmu Alikum,

Below this post are the posts for each

of the 4 required reports that

Dr. Ghars asked us to prepare.

Each group should enter the post for

the report that they choosed and

start their discussion and sharing there.

If there is any questions or general notes

we want to pass to each other,

then please comment in this post.

My Regards,

Anas Elshamy