Exchange Rate Considerations- DB4 Essay Example | Topics and Well Written Essays - 500 words

Exchange Rate Considerations- DB4 - Essay Example A stable money supply plays a crucial role in economic growth. Excessive circulation of currency results in inflation while an insufficient circulation of currency makes it more difficult for consumers and firms to obtain credit to finance large purchases and business expansions. Given that the United States, the European Union, and Japan are the world richest economies as at the time of the ranking, Ben Bernanke, Jean-Claude Trichet, and Masaaki Shirakawa have considerable influence on the stability and growth of the global economy. In the United States, the Federal Reserve System (Fed) controls the monetary policy through the Federal Open Market Committee with Mr. Ben S. Bernanke as the Chairman. As mentioned above, the ultimate goal of the monetary policy actions of the FRS is to promote sustainable economic growth and stability through control of the availability of currency and credit. Whatever affects the flow of currency ultimately affects the interest rates and the economic p erformance.