history thought theory origins study business cycles monetary theory general early believed monetary factors affect real factors real output john attacked classical theories produced general theory described economy terms individual parts attempting explain unemployment noticed tendency people businesses cash avoid investment recession argued assumptions classical thought markets clear leaving surplus goods willing labor left idle generation followed synthesized theory form synthesis theory originally omitted explanation price levels inflation later adopted phillips curve model price level changes opposed synthesis method combining theory system advocated models instead led adopted ideas importance demand money argued ignored role money supply inflation robert lucas new classical criticized models work rational expectations lucas argued models stable models based foundations new classical school culminated real business cycle theory like early classical economic models models assumed markets clear business cycles driven changes technology supply demand new tried address criticisms leveled lucas new classical neo new adopted rational expectations built models sticky prices suggested explained demand factors stop prices falling market clearing level leaving surplus goods labor new synthesis combined elements new classical new consensus avoided new classical new debate short term dynamics developed new growth theories long run economic growth great recession led retrospective state field popular attention turned economics origins descends areas research business cycle theory monetary theory monetary theory dates 16th century work business cycle analysis dates mid 19th business cycle theory beginning william stanley 1860s attempted explain cycles frequent violent shifts economic activity key milestone endeavor foundation national bureau economic research mitchell marked beginning boom statistical models economic models based cycles trends instead economic theory led discovery apparently regular economic patterns like wave focused theory business cycle analysis business cycle theories focused single factor monetary policy impact weather largely agricultural economies time business cycle theory established 1920s work dennis little impact public policy partial theories capture general markets interact particular early business cycle theories treated goods markets financial markets separately research areas methods explain employment price level interest rates monetary theory initially relationship price level output explained quantity theory money david presented theory work money essays moral political literary essay iii quantity theory viewed entire economy law stated supplied market sold short markets clear view money neutral impact real factors economy like output levels consistent classical view real aspects economy nominal factors price levels money supply considered independent example adding money economy expected raise prices create goods quantity theory money dominated theory 1930s versions particularly influential developed fisher works included purchasing power money cambridge course early 20th century fisher version quantity theory expressed holding money velocity frequency given piece currency transactions real income constant allowing money supply price level vary equation exchange formula classical theories including fisher held velocity stable independent economic activity cambridge john began challenge assumption developed cambridge cash balance theory looked money demand impacted economy cambridge theory assume money demand supply accounted people holding cash economy value holding cash cambridge took significant steps concept preference later develop cambridge theory argued people hold money reasons facilitate transactions maintain later work added motive speculation preference theory built create general theory proposed monetary theory centered interest rates analysis rates market interest rate determined banking system real natural interest rate determined rate return capital theory cumulative inflation occur technical innovation causes natural rate rise banking system allows market rate fall cumulative occurs opposite conditions causing market rate rise natural theory produce direct relationship quantity money price level according money created increase quantity hard currency long natural exceeded market interest rate conditions turn profit deposit cash bank reserves expands money supply lead cumulative process inflation increases continuously expansion monetary base work influenced swedish stockholm school general theory modern said begun publication book general theory employment interest money expanded concept preferences built general theory economy worked theory brought monetary real economic factors time explained unemployment suggested policy achieving economic stability contended economic output positively money velocity explained relationship changing preferences people increase money holdings times economic difficulty reducing spending economy claimed individual attempts survive demand money increases money velocity economic activities means markets clear leaving excess goods waste capacity idle turning quantity theory head argued market changes shift quantities prices replaced assumption stable velocity fixed price level spending falls prices surplus goods reduces need workers increases unemployment classical difficulty explaining unemployment applied law labor market expected willing work prevailing wage employed model employment output driven aggregate demand sum consumption investment consumption remains stable fluctuations aggregate demand stem investment driven factors including expectations animal spirits interest rates argued fiscal policy compensate government increase spending purchase excess goods employ idle labor effect increases effect direct spending newly employed workers spend income economy firms invest respond increase demand strong public investment ties interest uncertainty given unique perspective statistical treatise probability written years major economic works thought strong public investment fiscal policy counter negative impacts uncertainty economic fluctuations economy successors paid little attention parts work uncertainty played central investment preference aspects general theory exact meaning work long debated interpretation policy unemployment explicit parts general theory subject debates scholars debate intended advice major policy shift address problem moderately conservative solution deal minor issue successors successors debated exact mechanisms consequences model group emerged representing orthodox interpretation combined classical thought produce synthesis dominated economics 1940s early 1970s camps critical synthesis interpretation group focused aspects work took stance began post tradition synthesis generation followed neo created synthesis combining neo dealt issues providing foundations aspects theory consumption investment second combining general theory general theory individual markets interact price exists perfect competition perfect information paul foundations economic analysis provided basis synthesis work set pattern neo economic theories expressed formal mathematical models theories prevailed period successors largely abandoned informal favor mid 1950s vast majority ceased debating accepted synthesis view room disagreement remained synthesis attributed problems market clearing sticky prices failed adjust changes supply demand group focused economics tried reconcile concept absence market clearing neo models john published article incorporated thought general framework markets goods money met overall investment savings preference money supply model basis decades policy analysis 1960s model represents goods market curve set points representing investment savings money market represented curve set points representing supply demand money intersection curves identifies aggregate economy unique values interest rates economic output model focused interest rates monetary transmission mechanism channel money supply affects real like aggregate demand employment decrease money supply lead higher interest rates reduce investment lower output economy built framework notably franco added labor market model represented economy system general markets labor finance goods explained unemployment rigid nominal wages growth interest 18th century classical like adam smith work tapered 19th early 20th century revolution researchers focused study growth revived neo roy independently developed model extension theory long run area looked models combined model investment produced simple result growth savings rate divided capital output ratio capital divided output model dominated growth theory robert swan independently developed growth models swan produced appealing model balanced growth based labor capital production swan suggested increased savings temporarily increase growth technological improvements increase growth long run swan growth research tapered little research growth incorporated theoretical work synthesis large scale models combined individual factors consumption investment money demand observed data line research reached height mit penn social science research council mps model developed collaborators mps combined aspects synthesis including growth model phillips curve relation inflation output large scale models phillips curve targets critics synthesis phillips curve lay explicit theory price level early models assumed wage price levels fixed assumptions caused little concern 1950s inflation stable mid-1960s inflation increased issue models phillips set basis price level theory observation inflation unemployment related richard provided theoretical explanation generally explanations curve held excess demand drove high inflation low unemployment output gap raised unemployment depressed prices late 1960s early 1970s phillips curve faced attacks theoretical fronts presumed trade output inflation represented curve weakest system despite prevalence synthesis critics strain non theory developed criticized synthesis apparent contradictions allowing phenomena especially unemployment modeled models argued presence market associated unemployment tied excess supply goods market don work vein robert introduced dual decision hypothesis person market determine wants buy ultimately limited buy based sell argued formed fundamental theory deserved greater attention robert formulated general models individual markets locked prices general markets produced false prices resulting soon work models fell favor united_states abandoned adopted new classical market clearing american quickly abandoned models european open models market clearing europeans expanded tradition worked explain price instead simply assuming analysis develop theory unemployment argued labor goods markets lead goods labor leading unemployment adopted framework argued rigid modern industrial prices compared relatively flexible systems raw goods dominate agricultural economies prices fixed quantities adjust considers state classical unemployment likely work tradition confined special case theory reaching case impossible achieve given nature industrial developed alternative eventually labeled generally idea supply money matters emerged 1950s 1960s neglected role money played inflation business cycle directly challenged points criticizing phillips curve phillips curve appeared reflect clear relationship inflation output curve broke 1970s economies suffered simultaneous economic inflation known phillips curve followed attacks mounted theoretical grounds argued unexpected inflation impacted employment variations expectations augmented phillips curve standard tools models long run trade inflation unemployment instead phillips curve models based natural rate unemployment monetary policy temporarily shift unemployment natural rate eventually firms adjust prices wages inflation based real factors ignoring nominal changes monetary policy boost wiped importance money anna collaborated produce major works monetary history united_states linked money supply business cycle 1950s 60s adopted view monetary policy impact aggregate output business cycle based evidence great depression interest rates extremely low output remained depressed argued looked nominal rates neglected role inflation plays real interest rates high depression real terms monetary policy effectively putting downward pressure output employment looking nominal rates thought monetary policy developed quantity theory money referred fisher inherited quantity theory money incorporated demand money preference equation similar classical equation exchange updated quantity theory allowed possibility monetary fiscal policy remedy major broke arguing money demand relatively stable argued fine tuning fiscal monetary policy found money demand stable fiscal policy shifts fiscal monetary policies suffer slow prevent mild prominence decline attracted attention policy makers 1980s version phillips curve performed better gave boost credibility mid-1970s new central banks united_kingdom united_states largely adopted policy targeting money supply instead interest rates setting policy targeting monetary proved difficult central banks measurement difficulties faced major test paul took federal reserve money supply brought inflation creating severe recession process recession popularity clearly demonstrated importance money supply economy credible stable money velocity defied predictions began united_states early 1980s methods single equation models non statistical analysis plotted data lost simultaneous equation modeling favored policies method analysis lost influence central academics core long run neutrality money increases money supply long term effects real output use monetary policy mainstream new classical economics new classical economics evolved presented challenges early new considered new classical school evolved new abandoned belief monetary policy systematically impact economy eventually embraced real business cycle models ignored monetary factors entirely new broke economic theory completely built ideas despite theory new classical share focus explaining short run fluctuations new replaced primary opponents changed primary debate look short run fluctuations models grounded theories like new classical economics rooted university_of_chicago principally robert lucas leaders development new classical economics include edward university minnesota robert university rochester new classical wrote earlier theory based theory described efforts providing foundations new introduced rational expectations argued governments little ability stabilize economy given rational expectations economic agents new classical revived market clearing assumption assuming prices flexible market modeled rational expectations policy recognized people based economic decisions expectations future 1970s models relied expectations assumed expectations based average past trends example inflation averaged period economic agents assumed expect inflation following year lucas influenced agricultural economics paper john introduced rational expectations essentially expectations modeled behavior backward looking rational expectations modeled economic agents consumers producers investors forward looking new classical claimed economic model internally inconsistent assumed agents models behave unaware model assumption rational expectations models assume agents predictions based optimal forecasts model imply people perfect act informed understanding economic theory policy thomas wallace applied rational expectations models phillips curve trade offs inflation output found monetary policy systematically stabilize economy wallace policy proposition found economic agents inflation adjust higher price levels influx monetary boost employment output monetary policy increase employment central bank systematically use monetary policy expansion economic agents catching anticipating price changes impact robert hall applied rational expectations permanent income hypothesis people base level current spending wealth lifetime income current income hall found people smooth consumption time alter consumption patterns expectations future income change hall versions permanent income hypothesis challenged view short term policies like tax cuts stimulate economy permanent income view suggests consumers base spending wealth temporary boost income produce moderate increase consumption tests hall hypothesis suggest consumption income increases hall work helped equation models consumption lucas critique lucas wrote paper criticizing large scale models policy evaluation lucas argued economic models based relationships unstable policies change relationship policy regime invalid regime changes lucas critique went argued policy impact determined policy expectations economic agents model stable accounts expectations expectations relate policy new classical argued abandoning models focusing behavior based models remedy faults responded building models grounded stable theoretical relationships lucas supply theory business cycle models lucas rapping laid new classical approach aggregate supply model changes employment based worker preferences leisure time lucas rapping modeled decreases employment voluntary choices workers reduce work effort response prevailing wage lucas proposed business cycle theory based rational expectations imperfect information market clearing building model lucas attempted incorporate fact trade inflation output money non neutral short run model included idea money surprise monetary policy matters causes people surprised confused price goods changing relative lucas producers aware changes industries recognize changes industries given assumption producer perceive increase general price level increase demand goods producer responds increasing production find surprise prices increased economy generally specifically goods lucas supply curve models output function price money surprise difference expected actual inflation lucas surprise business cycle theory fell favor 1970s evidence failed support model real business cycle theory money surprise models efforts continued develop new classical model business cycle paper introduced real business cycle theory theory business cycles explained entirely supply models represented economy systems constant dismissed need explain business cycles price surprise market failure price uncertainty instability instead built models explained business cycles changes technology productivity employment levels changed technological productivity changes altered desire people work rejected idea high unemployment dismissed idea money stabilize economy idea money real business cycle sought build models based arrow general models inspirations dynamic general models models common tool disagree new classical theory new economics new classical economics pointed inherent contradiction synthesis market clearing general lead markets failed clear new recognized new abandoned new abandoned market clearing late 1970s 1980s new researchers investigated market like competition nominal like sticky prices consistent new formulated models rational expectations proposed lucas adopted new classical nominal real stanley fischer responded thomas wallace monetary proposition showed monetary policy stabilize economy model rational expectations fischer model showed monetary policy impact model long term nominal wage contracts john taylor expanded fischer work found monetary policy long lasting effects wages prices adjusted taylor arrived result building fischer model assumptions contract negotiations contracts fixed nominal prices wage rates extended periods early new theories based basic idea given fixed nominal wages monetary authority central bank control employment rate wages fixed nominal rate monetary authority control real wage wage values adjusted inflation changing money supply impact employment rate 1980s new dissatisfied early nominal wage contract models predicted real wages real wages rise economy fell evidence showed real wages tended independent economic cycles slightly contract models sense standpoint unclear firms use long term contracts led instead looking labor market new shifted attention goods market sticky prices resulted menu cost models price change term refers literal cost restaurant printing new wants change prices use refer general costs associated changing prices including expense evaluating change firms spend money change prices adjust point markets clear lack price adjustments explain economy studies data united_states consumer price index confirmed prices tend sticky good price typically changes months sales excluded months studies suggested menu costs small aggregate impact ball david showed real interact nominal create significant real occur firm slow adjust real prices response changing economic environment example firm face real market power costs wages locked contract ball argued real labor market firm costs high makes firms hesitant cut prices lose revenue expense created real combined menu cost changing prices makes likely firm cut prices market clearing level coordination failure coordination failure potential explanation unemployment factory idle people willing work people willing buy production jobs scenario economic appear result coordination failure invisible hand fails coordinate usual optimal flow production consumption russell cooper andrew john expressed general form coordination models multiple agents coordinate improve harm respective situations cooper john based work earlier models including peter diamond model demonstrated case coordination failure involving search matching theory diamond model producers likely produce producing increase possible trading partners increases likelihood given producer finding trade cases coordination failure diamond model multiple welfare agent dependent decisions diamond model example thick market causes markets function better people firms participate potential sources coordination failure include self fulfilling firm fall demand cut hiring lack job worry workers cut consumption fall demand meets firm expectations entirely firm actions labor market failures new offered explanations failure labor market clear market unemployed workers bid wages demand workers meets supply markets ranks unemployed limited workers transitioning jobs workers choose work wages low attract developed theories explaining markets leave willing workers unemployed theories new especially associated efficiency wages insider outsider model explain long term effects previous unemployment short term increases unemployment permanent lead higher levels unemployment long run insider outsider model interested unemployment levels oil shock early 1980s return lower levels considered natural rate lawrence summers explained unemployment insider outsider models proposed dennis series papers book employees working firm concerned welfare wages high cut pay expand employment unemployed outsiders voice wage process interests represented unemployment increases number outsiders increases economy recovered outsiders continue process larger pool outsiders created periods economic lead higher levels unemployment presence labor market raises importance monetary fiscal policy temporary economy create long term increases unemployment policies provide temporary relief prevent short term long term increases unemployment efficiency wages efficiency wage models workers paid levels maximize productivity instead clearing market example developing countries firms pay market rate ensure workers afford nutrition productive firms pay higher wages increase loyalty morale possibly leading better productivity firms pay higher market wages models particularly influential joseph created model employees tend avoid work firms monitor worker effort threaten employees unemployment economy employment fired simply moves new job individual firms pay workers premium market rate ensure workers work current job instead risk having new job firm pays market clearing wages labor market fails clear creates pool unemployed laborers adds expense getting fired workers risk lower wage risk stuck pool unemployed keeping wages market clearing levels creates makes workers efficient leaves willing workers unemployed new growth theory following research growth model 1950s 1960s little work economic growth occurred papers paul particularly influential revival growth research beginning mid-1980s early 1990s shifted focus long run started new growth theories including growth growth sought explain facts including failure sub africa catch growth east asian tigers productivity growth united_states prior technology boom 1990s convergence growth rates predicted growth model apparent failure inspired research growth families new growth models challenged models challenged assumption previous models economic benefits capital decrease time early new growth models incorporated positive capital accumulation firm investment technology generates benefits firms knowledge spreads second focused role innovation growth models focused need encourage innovation patents incentives set referred revival expanded definition capital growth theory include human capital strain research began showed cross country growth explained model augmented human capital growth theories implied countries experience rapid catch growth open society encouraged technology ideas nations growth theory suggested governments intervene encourage investment research development private sector invest optimal levels new synthesis new synthesis new synthesis emerged 1990s drawing ideas new new classical schools new classical school adapted including rational expectations methods new school took nominal price market new synthesis theory developed models called dynamic general models models behaviors preferences firms households numerical solutions resulting models models included element created economy original models limited technological change recent models incorporated real changes models theoretical advantage avoiding lucas critique new synthesis adopted academic soon policy makers central analysis models suggested real factors affect economy paper frank stated monetary policy explained small fluctuations economic output new synthesis models affect demand supply new synthesis implies monetary policy effect economy contrary new classical theory synthesis debates ideological business cycle broken camps favor favor models values based studies casual observation instead statistical evaluate models model operating characteristics determine quality model offered formal evaluation model noted like hours worked match real data elements model methods models evaluated based standard statistical goodness fit criteria generally associated real business cycle new classical school differences cut ideology lucas advocates prominent new classical favors financial crisis great recession breakdown consensus financial crisis subsequent great recession challenged theory predicted crisis great disagreement address new synthesis consensus broke debated policy responses deal deep recession new synthesis formed great tested severe economic environment agree crisis stemmed economic bubble major schools paid attention finance theory asset bubbles form recognized prevented failures current economic theory deal crisis spurred thinking commentary ridiculed mainstream proposed major elements modern consensus criticized following financial crisis robert testified congress modeling useful anti recession policy built essentially assumptions conclusion policy criticized models frequently assuming single representative agent represent complex interaction diverse agents real world robert gordon criticized gordon called renewal modeling new classical new assumed markets clear called renewal economic models included market clearing sticky priced goods oil housing respectively criticizing models argues recent work finance shows progress suggests modern needed centered scrapped wake financial crisis theories adhere theories sufficiently outside mainstream treated irrelevant establishment initially including joan robinson worked alongside mainstream groups isolated created groups late 1960s 1970s present day publish journals mainstream formal modeling favor abstract theoretical work financial crisis subsequent recession highlighted limitations existing theories models popular press discussed post economics austrian economics traditions little influence mainstream economics post economics neo integrated ideas theory post went directions post opposed synthesis shared interpretation sought develop economic theories classical elements core post belief rejection central classical mainstream views neutrality money gross post reject neutrality money short run money important factor long run view dropped 1970s gross implies goods relative price changes cause people shift consumption proportion change asserts future economy predicted based past present market conditions assumption agents unable form rational expectations new classical theory non economy predictions hard decision making hampered uncertainty partly uncertainty post different stance sticky prices wages new nominal explanation failure markets clear instead think sticky prices long term contracts anchor expectations alleviate uncertainty efficient markets post economic policies emphasize need reduce uncertainty economy including safety nets price stability applied post notions uncertainty instability theory financial crisis investors increasingly debt returns longer pay interest assets resulting financial crisis financial crisis brought mainstream attention work austrian business cycle theory austrian school economics began principles economics followers formed distinct group world war distinction austrian economics schools thought largely broken austrian tradition survived distinct school works von friedrich present day austrians distinguished interest earlier austrian works standard including austrians focus market processes instead mainstream generally critical created austrian business cycle theory capital theory theory money credit theory proposes model inter temporal investment production plans manufacture finished product producers revise production plans adapt changes consumer preferences producers respond derived demand estimated demand future instead current demand consumers reduce spending producers believe consumers saving additional spending later production remains constant combined market funds relates savings investment interest rate theory capital production leads model markets reflect inter temporal preferences model suggests economic bubble begins cheap credit boom resources early stages production receive resources begins later stages capital funded maintenance prevent early stages processed poorly maintained later stage capital boom bust lack finished goods leads forced saving fewer finished goods produced sale articles history viewed background marshall divide history political economy books economics taylor john michael handbook economics north holland isbn handbook monetary economics benjamin frank links description contents chapter outline previews links description contents chapter outline previews benjamin michael links description chapter information coordination essays theory new_york oxford_university press isbn michael interest prices foundations theory monetary policy princeton new_jersey princeton_university press isbn videos related nobel prize lecture videos material thomas chris research cause effect peter diamond christopher analysis markets search analysis policy finn edward dynamic time consistency economic policy driving forces business cycles george michael joseph analyses markets information institute new economic thinking conference proceedings videos robert challenge depression economic thinking friedrich versus john biographer theory economic crisis christopher evidence influence economic thinking defends models don austrian business cycle theory monetary policy inflation paul growth money


interest rate interest rate condition representing state investors indifferent interest rates available bank deposits countries fact condition hold allows potential opportunities earn profits covered interest assumptions central interest rate capital mobility perfect domestic foreign assets given foreign exchange market interest rate condition implies expected return domestic assets equal exchange rate adjusted expected return foreign currency assets investors earn profits borrowing country lower interest rate exchanging foreign currency investing foreign country higher interest rate gains losses exchanging domestic currency maturity interest rate takes distinctive forms uncovered interest rate refers condition exposure foreign exchange risk changes exchange rates covered interest rate refers condition forward contract cover eliminate exposure exchange rate risk form condition demonstrates unique relationship implications future exchange rates forward exchange rate future spot exchange rate found evidence covered interest rate generally holds precision effects risks costs taxation ultimate differences covered uncovered interest rate hold expose relationship suggesting forward rate future spot rate relationship employed test uncovered interest rate holds found mixed results uncovered interest rate purchasing power hold relationship named real interest rate suggests expected real interest rates represent expected adjustments real exchange rate relationship generally holds strongly longer terms emerging market countries assumptions interest rate rests certain assumptions capital mobile investors readily exchange domestic assets foreign assets second assumption assets perfect following similarities given capital mobility perfect investors expected hold assets offering greater returns domestic foreign assets domestic foreign assets held investors true difference exist returns domestic assets returns foreign assets domestic investors foreign investors earn equivalent returns single investor given expect earn equivalent returns investment decision uncovered interest rate condition satisfied use forward contract exposure exchange rate risk interest rate said uncovered risk neutral investors indifferent available interest rates countries exchange rate countries expected adjust dollar return dollar deposits equal dollar return euro deposits eliminating potential uncovered interest profits uncovered interest rate helps explain determination spot exchange rate following equation represents uncovered interest rate formula formula expected future spot exchange rate time number periods future time current spot exchange rate time interest rate country example united_states interest rate country currency area example dollar return dollar deposits formula shown equal dollar return euro deposits formula uncovered interest rate asserts investor dollar deposits earn interest rate available dollar deposits investor holding euro deposits earn interest rate available potential gain loss depending rate appreciation euro dollar useful uncovered interest rate follows assumptions uncovered interest rate holds investor indifferent dollar versus euro deposits excess return euro deposits offset expected loss euro dollar conversely return euro deposits offset expected gain appreciation euro dollar following equation represents uncovered interest rate formula formula change expected future spot exchange rate formula expected rate dollar universal way stating home interest rate equals foreign interest rate plus expected rate home currency covered interest rate condition satisfied use forward contract exposure exchange rate risk interest rate said covered investors indifferent available interest rates countries forward exchange rate dollar return dollar deposits equal dollar return foreign deposit eliminating potential covered interest profits furthermore covered interest rate helps explain determination forward exchange rate following equation represents covered interest rate formula formula forward exchange rate time dollar return dollar deposits formula shown equal dollar return euro deposits formula evidence covered interest rate found hold open capital mobility limited capital controls finding confirmed freely traded present day example united_kingdom germany abolished capital controls taylor calculated hypothetical profits implied expression potential inequality equation meaning difference returns domestic versus foreign assets 1960s 1970s constituted opportunities prevalence capital controls given financial resulting capital mobility temporarily possible restored abolition capital controls united_kingdom germany potential profits near zero transaction costs arising fees regulations opportunities costs exceed generally holds hold precision presence transaction costs political risks tax implications interest earnings versus gains foreign exchange differences domestic versus foreign assets researchers found evidence significant onset global financial crisis driven concerns risk posed counter parties banks financial institutions europe foreign exchange swap market european central bank efforts provide dollar foreign exchange swap market similar efforts federal reserve impact dollar euro scenario found reminiscent 1990s driven struggling japanese banks looked foreign exchange swap markets try acquire dollars bolster covered uncovered interest rate hold condition sheds light noteworthy relationship forward expected future spot exchange rates demonstrated formula formula dividing equation equation yields following equation formula rewritten formula equation represents hypothesis states forward exchange rate future spot exchange rate given strong evidence holds forward rate hypothesis serve test determine holds order forward rate spot rate equal conditions hold evidence validity accuracy hypothesis particularly evidence forward rate future spot rate mixed researchers published numerous papers demonstrating support failure hypothesis found support tests expected rates currency forward premium evidence suggests holds depends currency examined found substantial examining longer time studies monetary policy offered explanations fails researchers demonstrated central bank manages interest rate spreads strong response previous period spreads interest rate spreads negative tests study set model central bank monetary policy responds central bank interest rates explain failures study central bank dollar mark found limited evidence substantial effect found hold small spans time covering number hours high frequency exchange rate data tests economies experiencing institutional regime changes monthly exchange rate data dollar versus mark spanish versus british pound found evidence held german regime changes volatile held spain united_kingdom particularly spain joined european_union began capital mobility real interest rate particularly form purchasing power hold conditions reveal relationship expected real interest rates changes expected real interest rates reflect expected changes real exchange rate condition known real interest rate related international fisher effect following demonstrate derive equation formula formula formula represents inflation conditions hold combined rearranged following formula rests assumptions including efficient markets country risk zero change expected real exchange rate condition suggests real interest rates countries capital mobility result capital flows eliminate opportunities exists strong evidence holds tightly emerging markets asia japan half life period examined researchers found roughly seven months months certain countries variation half lives reflective differences degree financial integration country groups analyzed hold short time evidence demonstrated generally holds long time years


qualifying industrial zone qualifying industrial zones industrial parks house manufacturing operations jordan egypt special free trade zones established collaboration neighboring israel advantage free trade agreements united_states israel trade agreements jordan laid united_states goods produced notified areas directly access markets restrictions subject certain conditions qualify goods produced zones contain small portion israeli input addition minimum value goods added finished product concept invented businessman industrial estate northern jordan authorized united_states congress january qualifying industrial zones jordan designated regions egypt idea establishment foster sense prosperity stability middle_east economic cooperation employment zones differ trade zones stand entities country directly connected countries addition products exports domestic consumption country limited specific countries importantly operate authority conditions laid host government history concept qualifying industrial zone credited businessman anticipation israel jordan peace treaty traveled israel intention business israeli businessmen interested business ventures advantage year old free trade agreement united_states israel allowed israeli goods enter markets duty free treaty signed business venture struck delta labor transferred northern jordan advantage low labor costs seventy percent lower israel envisioned exploiting israeli resources labor finances contacts produce value added goods economy jordan benefited addition economic cooperation nations help foster peace region set public share holding company century investments business israel organizations criticized purchase output jordan despite heavy criticism received support king jordan combat boycott began work larger international stake actively lobbied government set negotiate free trade agreement united_states lines united_states israel free trade area implementation act faced little enthusiasm government presidential proclamation palestinian agreement signed palestine liberation organization israel agreement areas border israel jordan designated qualifying industrial zones goods produced restrictions markets industrial estate factories located situated far bordering areas qualify status lobbied government extending regions parts jordan government officials luke warm idea told naive assume united_states jordan status response traveled united_states lobbied hard state department white_house trade representative interests extend jordan interiors lawyers united_states told small portion israeli territory associated proposal soon officials began travel jordan work deal finally agreement signed middle_east north_africa conference established agreement jordan march zone designated jordan setting companies took advantage benefits general hostility business israel instead chinese indian companies quickly took advantage vacuum set business establishments lack local enthusiasm criticized jordan times missing golden opportunity gradually businesses began set business establishments political hostilities began overshadowed business economics soon additional sites given status positive results led government egypt negotiating separate protocol united_states cairo december protocol came effect february regulations agreement requires articles eligible status manufactured directly imported areas administered palestine authority notified meet conditions quality scheme product substantially transformed manufacturing process material processing costs incurred total value product imported united_states materials materials israel jordan egypt depending program remaining input come israel jordan egypt remaining come world article meet conditions duty exemption sharing agreements manufacturer contribute final produce manufacturer israeli contribute high tech products israeli egyptian agreement israel clothing textile industry benefited arrangement goods united_states relatively high duty free benefits gain quick access markets united_states jordan march united_states trade representative designated industrial estate northern city addition designated country prominent include ibn industrial estate owned operated jordan industrial estate corporation jordan city privately owned industrial estate industrial park ready wear manufacturing company near upcoming industrial parks include gateway northern border israel industrial estate international complex jordan seen substantial economic growth set exports jordan united_states grew million usd billion usd government sources estimated jobs created set investment currently valued usd million expected grow million success led united_states jordan signing free trade agreement approved congress jordan moved united_states thirteenth largest trading partner middle east north african entities exports imports jordan totalled estimated billion exports estimated million times level imports billion times level despite united_states jordan articles enter united_states program industry dominates jordan total exports united_states accounting exports exports united_states reason dominance products enter united_states free duty jordan fully eliminated end year phase period egypt phased textile agreement textile clothing egyptian textile producers feared industry threatened global competition china india flood similar articles nations united_states edge egyptian exports possibly result loss job opportunities estimated cost billion foreign direct investment egypt egypt search sources increased economic growth trade provide jobs rapidly growing labor force positive results led government egypt negotiating protocol cairo december came effect february designated egypt greater cairo zone alexandria zone suez_canal zone november designated fourth zone central delta region expanded greater cairo suez_canal zones protocol signed nations non arrangement expected step establishment free trade agreement countries negotiations egyptian free trade agreement recently suspended human rights issues results positive israeli exports egypt rose usd million usd million exceeded usd million set egypt estimate approximately companies based wholly owned social impact experts note companies based hire foreign laborers thousands particularly women rural countryside found jobs factories traditional society jordan women little previous work experience largely home despite low wages paid factories women able support families traditional attitudes woman place home persist families continue prohibit female members working women jordan response ministry labor worked ease adjustment women moving home new job providing free transportation work cost food paying near factories cut times providing long term effect female employment concern time women difficulty achieving higher wages global economy manufacturers easily relocate cheaper labor markets program came observers regarded vehicle support development peaceful relations commercial ties israel arab states jordan egypt signed peace treaties cases peace continues prevail israel arab states conclusion jordan israel peace treaty october large numbers particularly palestinian origin members professional unions continue oppose israel resist expansion commercial relations establishment jordan increase volume trade overall totals remain modest criticisms far biggest international criticism jordan humanitarian crisis factories comprehensive report institute global labour human rights found workers subject routine sexual abuse rape united_states trade representative designation factories jordan jordan free trade agreement led disastrous realities gender inequality gender based violence poor young women foreign guest workers jordan largely foreign owned factories clothing export united_states free trade agreement enter duty free guest workers sri_lanka bangladesh india china egypt earn quarters wage workers account percent total workforce earn hour foreign guest workers home cents hour work hours day guest workers average hours day


fund accounting fund accounting accounting system emphasizing non profit organizations governments system fund self balancing set accounts segregated specific purposes accordance laws regulations special restrictions limitations label fund accounting applied investment accounting portfolio accounting accounting synonyms describing process accounting portfolio investments real estate held investment fund mutual fund fund investment accounting different system unrelated government nonprofit fund accounting overview nonprofit organizations government agencies special requirements financial statements reports money spent profit earned unlike profit oriented businesses use single set self balancing accounts general general fund depending financial reporting requirements entity able produce reports detailing expenditures revenues organization individual funds reports organization financial activities funds school system example receives grant state support new special education initiative grant federal government school lunch program award teachers working research projects periodic intervals school system issues report state special education program report federal agency school lunch program report authority research program programs unique reporting requirements school system needs method separately identify related revenues expenditures establishing separate funds chart accounts state local government funds state local governments use broad categories funds governmental funds funds funds governmental funds include following general fund fund account general operations activities requiring use funds special revenue special funds required account use revenue law particular purpose state federal fuel tax revenues require special revenue funds federal state laws restrict taxes transportation uses capital projects funds account construction acquisition fixed assets buildings equipment roads depending use fixed asset instead financed special revenue fund fund capital project fund exists completion project fixed assets acquired long term debts incurred capital project assigned government general fixed assets long term debts debt service funds account money pay interest principal long term debts bonds government finance major construction projects paid tax period years require debt service fund account debts permanent funds serviced funds separate debt service fund permanent funds report resources legally restricted extent earnings principal purposes support reporting government programs benefit government funds include following internal service funds operations serving funds departments government cost basis printing shop takes orders forms offices cost order suitable application internal service fund enterprise funds services provided public user charge basis similar operation commercial enterprise water sewage utilities common examples government enterprises funds account assets held trust government benefit individuals entities employee pension fund created state maryland provide retirement benefits employees example fund financial statements distinguish funds trust agency funds trust fund generally exists longer period time agency fund fixed assets long term debts state local governments groups self balancing accounts considered funds general fixed assets general long term debts assets belong government entity specific fund general fixed assets government wide financial statements reporting entity reported governmental fund statements fixed assets long term assigned specific enterprise fund referred fund fixed assets fund long term basis accounting basis accounting businesses requires revenue recognized earned expenses recognized related benefit received revenues actually received later period expenses paid earlier later period cash basis accounting small businesses recognizes revenue received expenses paid governmental funds concerned usually rely modified basis involves recognizing revenue available earned expenditures term preferred expenses modified accounting recognized related liability incurred funds business like activities usually operate basis governmental refer basis distinguish modified basis accounting accounting basis applied funds depends needs specific fund trust involves business like operation basis accounting appropriate fund basis appropriate trust funds interest invested principle amounts pay supported programs investments important financial reporting state local governments report results annual operations comprehensive annual financial report equivalent business financial statements includes single set government wide statements government entity individual fund statements governmental accounting standards board establishes standards preparation governments use terms profit loss describe net results operations difference revenues expenditures year surplus deficit making profit purpose government significant surplus generally means choice tax cuts spending increases significant deficit result spending cuts borrowing small federal government funds federal government accounting uses broad groups funds federal funds group trust funds group federal funds group general fund technically general fund control united_states treasury department federal agency maintains self balancing set accounts general fund account receipts payments belong fund special funds similar special revenue funds state local governments specific purpose business like activities revolving funds similar funds state local governments business like activities term revolving means conducts continuing cycle activity types revolving funds federal funds group public enterprise funds revolving funds public enterprise funds similar enterprise funds state local governments business like activities conducted primarily public postal service fund example public enterprise fund revolving funds similar internal service funds state local governments business like activities conducted federal government trust funds group trust funds specific programs purposes accordance statute fund trust statutory designation distinguishes fund trust special fund highway trust fund example trust funds trust revolving funds business like activities designated statute trust funds identical public enterprise revolving funds deposit funds similar agency funds state local governments assets belonging individuals entities held temporarily government state income taxes withheld federal government employee pay paid state example deposit funds accounting basis financial reporting united_states government uses basis accounting funds consolidated annual financial report uses measure financial health unified budget deficit net operating cost revenue unified budget deficit cash basis measurement equivalent balance indicator consider long term consequences historically focus budget reporting media unified budget deficit federal government financial statements rely basis accounting net operating cost revenue basis measurement calculated statements operations changes net position comparing revenues costs federal government net operating cost revenue comparable net income loss reported income statement business surplus deficit reported state local governments nonprofit organizations nonprofit organizations generally use following categories funds current fund fund account current assets discretion organization governing board current funds restricted use current assets subject restrictions assigned donors land building equipment fund cash investments reserved specifically acquire assets related recorded fund funds account principal gifts organization required agreement donor maintain intact specific future date event funds held according donor instructions basis accounting financial reporting report consolidated financial statements annual financial reporting nonprofit organizations similar state local governments nonprofit organizations use basis accounting funds nonprofit financial statements generally include following statement financial position balance sheet similar balance sheet business statement lists value assets held debts owed organization end reporting period statement activities statement support revenue expenses statement resembles income statement business uses terms excess deficit profit loss shows net results fund organization activities fiscal year reported excess deficit applied change fund increase decrease owner equity statement functional expenses expense organization amounts related organization functions functions segregated broad categories program services supporting services program services mission related activities performed organization non program supporting services include costs fund raising events management general administration statement cash flows identifies sources cash flowing organization uses cash flowing reported fiscal year standards nonprofit financial statements set financial accounting standards board board recent proposal announced public april establish new standards financial performance information available donors fund accounting fiscal cycle fictitious example following simplified example fiscal cycle general fund city fictitious city government opening entries fiscal cycle begins approval budget mayor city_council city fiscal year began july mayor office estimated general fund revenues million property taxes state grants parking fines sources estimate recorded fund general estimated revenues credit fund balance appropriation approved city_council authorizing city spend million general fund appropriation recorded fund general fund balance credit subsidiary appropriation divided smaller amounts authorized departments programs complexity appropriation depends city_council preferences real world list hundreds line item amounts appropriation legal authority spending given city_council agencies city government example city spend million smaller appropriation limits established individual programs departments recording revenues fiscal year city assessed property owners total million property taxes mayor office million assessment difficult impossible collect revenues million recognized portion assessment available current period payroll expenditures city spent total million employee payroll including taxes benefits employee portion payroll taxes paid fiscal period modified accounting requires expenditure recorded period liability incurred expenditures public works department spent million supplies services maintaining city streets closing entries end fiscal year actual revenues million compared estimate million million difference recorded credit fund balance city spent million million appropriation credit million applied fund balance current fiscal period ended appropriation expired balance remaining general fund time considered city government agencies allowed spend balance expenditures ended fiscal period share expired appropriation new appropriation necessary authorize spending fiscal period incurred end fiscal period goods services ordered received usually considered expended allowing payment later date current appropriation jurisdictions require amounts included following period budget instead applying balance general fund programs city_council choose spend money programs alternatively use balance cut taxes pay long term debt large surplus reducing tax burden normally preferred choice


economic development india economic development india followed socialist inspired policies independent history including state ownership sectors india capita income increased rate decades independence mid-1980s india slowly opened markets economic fundamental reforms renewal 2000s india progressed free market economy late 2000s india growth reached double average income decade analysts india pushed fundamental market reforms sustain rate reach government target states large responsibilities economies growth rates tamil delhi significantly higher india seventh largest economy world largest purchasing power adjusted exchange rates capita basis ranks world economic growth driven expansion services growing consistently faster sectors argued pattern indian development specific country able skip intermediate led phase transformation economic structure concerns raised nature economic growth favourable performance necessary sufficient condition significant reduction poverty indian population rate poverty decline higher post reform period improvements non economic dimensions social development favourable pronounced example exceptionally high persistent level child progress economic reforms india followed closely world bank suggests important priorities public sector reform infrastructure agricultural rural development removal labour regulations reforms states hiv aids india ranked ease business index setback compared china russia 51st brazil according index economic freedom world ranking annual survey economic freedom nations india ranks compared china russia ranks respectively turn century india billion economic reforms picked pace india grew fold reach estimates india growth january march period compared china making fastest growing economy india growth recovered marginally previous fiscal india services sector grew manufacturing sector agriculture indian government forecast growth agriculture india ranks worldwide farm output agriculture allied sectors like forestry logging fishing accounted employed total workforce despite steady decline share largest economic sector plays significant role overall socio economic development india yields unit area crops grown special emphasis placed agriculture year plans steady improvements irrigation technology application modern agricultural practices provision agricultural credit subsidies green revolution india largest producer world milk nuts tea black pepper world largest cattle population million second largest producer wheat rice sugar inland fish largest producer tobacco india accounts world fruit production rank production banana known required level investment development marketing storage cold storage infrastructure estimated huge government implemented schemes raise investment marketing infrastructure schemes construction rural downs market research information network development strengthening agricultural marketing infrastructure grading main problems agricultural sector listed world bank india large agricultural subsidies productivity enhancing investment agriculture increased costs price risks uncertainty government labour land credit markets inadequate infrastructure services research development indian agricultural research institute established responsible research leading indian green revolution 1970s indian council agricultural research apex body related allied fields including research education union minister agriculture president indian agricultural statistics research institute develops new techniques design agricultural experiments analyses data agriculture statistical techniques animal plant breeding known father green revolution heads research foundation known advocacy environmentally sustainable agriculture sustainable food security industrial output india tenth world factory output manufacturing sector addition mining electricity gas account employ total workforce economic reforms introduced brought foreign competition led certain public sector industries opened sectors hitherto reserved public sector led expansion production fast moving consumer goods recent years indian cities continued excessive business regulations remain problem cities like post indian private sector usually run old family firms required political connections faced foreign competition including threat cheaper chinese imports handled change costs management focusing designing new products relying low labour costs technology services india fifteenth services output service industry employ english speaking indian workers supply demand increased demand foreign consumers interested india service exports looking operations india industry despite contributing significantly balance payments accounts total 50th total services internet bubble led heavy investments cables linked asia rest world fall followed economic boom resulted auction cheap fiber cables tenth original price development resulted widely available low cost communications infrastructure investments events mention swell available talent resulted india overnight centre business process sector events sector big employment generator especially young college graduates number professionals employed sectors estimated million march indian estimated helped create additional million job opportunities indirect induced helpful manner created employment growth rate economic india growing higher rate companies indian companies listed forbes global ranking leading companies india resource consumption oil india second largest oil asia pacific region china combination rising oil consumption fairly production levels leaves india highly dependent imports meet consumption needs natural gas oil gas journal india cubic feet confirmed natural gas reserves india imports small amounts natural gas india consumed natural gas year country showed net natural gas imports india imported natural gas oil sector india state owned companies account bulk natural gas production oil india ltd oil leading companies respect production volume whilst foreign companies upstream developments joint ventures production sharing contracts reliance industries privately owned indian company bigger role natural gas sector result large natural gas find krishna basin gas authority india ltd holds effective control natural gas transmission allocation activities december minister petroleum natural gas issued new policy allows foreign investors private domestic companies national oil companies hold equity stakes pipeline projects whilst domination natural gas transmission allocation ensured statute continue leading player sector existing natural gas infrastructure issues regulation public sector corruption india ranked ease business index compared pakistan people republic china nigeria brazil indonesia corruption forms problems affecting india decades red tape bureaucracy licence private enterprise economic reforms cut worst regulations corruption corruption large study transparency international india found half surveyed experience paying bribe influence job public office chief economic consequences corruption loss climate investment increase cost government services india study estimates monetary value petty corruption basic services provided government like education healthcare judiciary police etc billion billion india ranks developing nations terms ease business compared china average time taken secure bankruptcy greater right information act equivalent acts states require government officials information requested citizens face action services central state government acts established commissions considerably reduced corruption opened avenues grievances report transparency international puts india place states significant improvements india reducing corruption employment india labour force growing year employment growing year official unemployment exceeds regulation obstacles discouraged emergence formal businesses jobs workers casual workers work able jobs remain unpaid rest time workforce regular employment india labour regulations heavy developing country standards analysts urged government abolish overall stock estimated million workers million operate sector self employed informal workers strong relationship quality employment social poverty characteristics relative growth informal employment rapid organised sector related employment organised sector suggested increasing use contract labour employers order benefit flexible labour practices children constitute total labour force country children work rural family settings engaged traditional agricultural activities work manufacturing services repairs child labour complex problem basically rooted poverty indian government implementing world largest child labour elimination program primary education targeted million numerous non governmental voluntary organisations involved special investigation cells set states enforce existing laws banning employment children hazardous industries allocation government india child labour million million allocation million environmental degradation billion people developing nations lack clean safe water household industrial dumped directly rivers lakes treatment contributes rapid increase diseases humans india towns cities partial treatment facilities treatment facilities cities dump sewage partially cremated bodies directly river downstream water drinking bathing washing situation typical rivers india developing countries globally especially developing nations like india people cook coal open fires billion humans suffer continuous exposure smoke india concentrations houses reported range greatly exceeding maximum standard indoor matter united_states changes ecosystem biological diversity evolution parasites invasion exotic species frequently result disease cholera emerged india frequency aids hiv increasing indians million population tested found infected hiv


commercial import program commercial import program known import program economic aid arrangement south vietnam main supporter united_states lasted january fall dissolution south vietnam following invasion north vietnam forces withdrawn country cease fire agreement initiative trading plan designed large amounts american capital south vietnamese economy help fuel growth self high levels inflation normally occur drastic injection money scheme dollars given south vietnamese government treasury selected given import licenses allowed purchase dollars south vietnamese currency rate far market value american currency buy goods government kept south vietnamese currency paid businessmen fund military public service objective mechanism large amounts money economy indirect way material goods inflation avoided initiative failed generate economic development spent funds consumer goods main effect aid package fuel rapid expansion urban middle upper class life remained unchanged south vietnam rural majority served increase anti government resentment peasants urban support government officials aware failure program propel economic development try divert spending investment regarded urban support government important dependence urban class achieve political changes south vietnam sought pressure government alliance began cut funding gesture urban civil servant military officer class disapproved following south vietnamese leader overthrow assassination backed coup resumed history world war imperial japan attacked control france defeated allies power vacuum resulted communist dominated fought vietnamese independence french attempted regain control colony creating french union allied state vietnam war french lost battle geneva conference held determine future french given control north vietnam state vietnam controlled territory south 17th parallel geneva agreements state vietnam sign called elections held state vietnam received support anti communist countries midst cold war saw partner fight spread communism commercial import program created january immediately transfer france remaining direct influence state vietnam chief state emperor prime minister americans feared communist electoral victory national polls took place october proclaimed president newly formed republic vietnam won fraudulent referendum aid continued wanted build strong stable anti communist state southeast_asia program introduced generated merchant vietnam large proportion imports point france traders dependent selling french products found difficulties expensive import access cheaper american alternatives suppliers french goods threatened organize strike time south vietnam suffering lack foreign currency reserves seen urgent mechanism introduction brought unprecedented new level economic capitalism class struggled meet challenges market leading series significant shortages goods inexperience judging market forces resultant economy initially applications import licenses received early years initiative proportion funding came proceeds sale surplus american agricultural products france inception program licenses granted determined progress manage number licenses decreased people obliged assemble access scheme inflation regarded pressing concern limitations imported notable restrictions alcohol jewellery reasoned restrictions imports cause lack supply goods causing price increases restrictions increased years average washington pumped million south vietnam historian george calculated came end took control country declaring president provided billion aid addition million loans given accounted economic assistance accumulated million reserves aid peaked million began dropping reaching million economic method program import subsidies pump dollars south vietnamese treasury regimes sold dollars business people held licenses import american goods businessmen bought dollars treasury south vietnamese half official exchange rate acquired american currency import goods meant american manufacturers currency received selling goods free market south vietnamese twice goods money government collected selling aid dollars placed fund held national bank vietnam fund expansion training army republic vietnam national police civil service rule majority cost military police public service paid extra money actually circulating south vietnamese economy competing supply goods services inflation stimulated similar fiscal device employed marshall plan aid package rebuilding western_europe following destruction caused world war american economist described greatest invention wheel operation plan theoretically sound ineffective economic growth time little meaningful economic investment development infrastructure businessmen import subsidies purchase consumer goods boats radios music systems similar goods time program effective expanding size urban middle class generate economic investment minority purchases capital goods manufacturing equipment supplies factory production result subsidies created economic production government funds generated selling licenses problem corruption explicit theft effectiveness means military civil service addition government officials sell licenses businessmen bribe paid criticism funds collected government significant government sector economic investment mainly fund army defended stating national security paramount time began concern administration worried lack corruption initiative remained problem rural peasants vietnam comprised population unaffected aid package resentment observed relative city counterparts compared impoverished state program credited transforming textile industry machines imported year operation dan anti communist opposition politician prominent opponent win seat legislative election imprisoned barred taking position said commercial import program costs brings massive scale luxury goods kinds artificial society enhanced material conditions don sacrifice brings luxury ruling group middle class luxury means corruption political impacts massive south vietnamese economy expand urban middle class ease pressure government collect taxes government set high import duties effectively cut price exchange rate funds normal revenue subject american oversight unlike proceeds counterpart fund result proceeds import duty income tax low progressive income tax rate countries upper class affected taxation peers nations supported strongly effective income taxation rate south vietnamese president privately told adviser michigan state university group happy allowed build large support base newly created middle upper class american economic aid administrators aware effects urban political support successors aware yielding substantial gains economic development noted reports said program continued regardless effective urban middle class ensuring political support gaining loyalty military officers business leaders public servants report concluded absent economic levels resulting fall living standards create political problems erosion government support urban minority allowed import goods half price regarded virtual guarantee business success regardless skill result licenses highly prized confident sales ability healthy profit usually selling license willing businessmen especially demand far supply government report concluded possible guarantee domestic profit profit safely achieved black market exchange rates money american bank despite shorter term political benefits south vietnamese government complaints way americans set claimed involved applications imports process slow hindered development emerging economy market situation changed rapidly particular investment capital goods cost needed formal american review approval publicly criticized review policy occasions citing private infrastructure investments blocked american administrators felt regulations americans use fund obtained vietnamese ability accelerate development especially planning approval reviews took long time despite fact effect building urban middle class base regime consumer goods unhappy situation fearing long term detrimental effects lack investment capital goods country particularly opposed clause regulations restricted purchase capital goods businesses entirely private proved large areas south vietnamese government policy having majority ownership industry deemed vital national importance banning foreigners having stake ventures south vietnam ambassador van protested americans clause success wrote american restriction capital goods dependence aid american aid valuable partly devoted promoting country industrial capacities time administration frustrated refusal republic vietnam stable nation refused exchange rate equivalent free market exchange rate fixed exchange rate meant americans heavily funding south vietnamese economy firms obtain goods money rate meant south vietnam goods economically competitive export market reluctant cut currency rate arguing diminish value aid south vietnam undermine urban middle class support regime loss cheap consumer luxury goods ambassador frederick economic advisers spend funds rural development attempt shore peasant support face increasing communist pressure rebuffed october briefly suspended united_states wake taylor mission fact finding expedition south vietnam conducted secretary defense robert chairman joint chiefs staff general taylor investigate progress fight communist report concluded concentrating fighting insurrection instead preoccupied buddhist protests religious equality raiding firing buddhist reasons suspension military officers signal washington unhappy increase prospects coup try foster urban resentment previously benefited change policy direction accordance wishes considered unlikely funding restored early november month later assassination military coup continued dissolution south vietnam april communists overran south vietnam following withdrawal forces following cease fire agreement said elements economic support substantially expanded south vietnam middle class helped purchase political loyalty regime american sponsor provided means way life artificial economy rested said initiative opposite effect stated aims promoted increasing economic