University Degree: Business and Administrative studies

Conclusion analysis

Good conclusions usually refer back to the question or title and address it directly - for example by using key words from the title.
How well do you think these conclusions address the title or question? Answering these questions should help you find out.

1. Do they use key words from the title or question?
2. Do they answer the question directly?
3. Can you work out the question or title just by reading the conclusion?

• Discuss the implications short-term capital flows into emerging countries have on the financial stability and the economic development of those countries.

  "In conclusion, short-term capital inflows can be said to have grown faster than any other type of investment. The overall impact in recipient economies has been ambiguous. However, with reference to the recently experienced crises, large unregulated short-term flows have only proved to be volatile in nature, disturbing the economic and financial stability of the emerging nations. A clear pattern is identified, where short-term inflows are eventually reversed sharply causing currency crisis, banks and enterprises bankruptcies, dramatic reductions in output and economic activity in general. The benefits obtained by recipient countries were in many cases impaired by the dramatic outflows of capital. The expected progress to be brought about with financial liberalization was certainly not attained. Tobin (1997), cited in Rodriguez Y (2000), states that "experience has not, not yet anyway, vindicated current orthodox confidence that free global financial markets are the keys to global prosperity." Capital controls are proposed as a probable solution for developing markets in order to reduce the euphoria and the erratic ebbs, flows, and volatility of capital. What is essential is that policy negotiations keep sight of fundamental principles and remember that the financial system must serve the needs of the world economy, not the other way around. (Frank E, 1999)"

• Discuss the main theories of international finance and assess how each of them would pass Professor Buckley's test of standing up in the real world.

  "In conclusion, there are three main factors, which are used to predict the future exchange rate in freely floating exchange rate system. 1. Expected change in spot rate 2. Difference in expected inflation and interest rate 3. Forward exchange premium or discount rate These three factors are directly related with each other. Due to the assumption that the international money markets are efficient, every factors will change rapidly if there are any changes in any other factors. However, the expected inflation rate is the most important variable that will lead to the change in other factors. So the exchange rate predictors always try to analyse the factors that can lead to the change in inflation rate, such as money supply, business cycle, productivity, and capacity utilisation. 1"

• State and analyse the arguments for the privatisation of public corporations.

  "The reader must also be aware of the arguments against privatisation. It must be noted public enterprises still have a purpose in society. A PE gives the state control over monopoly power and profits in those areas where monopoly is unavoidable. For example, utilities such as water and electricity. Most opponents of privatisation indicate that privatisation is not always the answer as it corrupts the marketplace. Economic efficiency is concerned with the utilisation of scarce resources. Most private sectors reach certain levels of economic efficiency but they incur social and externality costs such as pollution and unemployment compensation. The government also incurs infrastructure costs. Also, privatisation does not necessarily mean that goods and services will be provided more cheaply or efficiently by the private sector than by the public sector. Public sectors play key roles in the development of countries but they manifest many problems as they are slow at developing and introducing new technologies and they are subject to over-frequent and damaging political intervention. Privatisation seems to offer a means of ridding the state of the financial burden of loss-making activities, while at the same time spreading share ownership. Privatisation when correctly conceived and implemented fosters efficiency, encourages investment, new growth and employment and frees public resources for investment in infrastructure and social programmes."