The average monthly increase in employment was approximately 155,000 in 2000 and 220,000 in 1999. For almost ten years, unemployment has fallen and the number of employed persons has increased by more than 15 million. In March 2001, the number of jobs decreased by 86,000, the largest monthly decrease since 1991. Job losses were most prominent in the manufacturing sector (81,000 jobs), but there were also losses in the retail trade sector (46,000 jobs). These losses were partially offset by employment increases experienced in the construction and finance sectors.
OPEC forced the multinational oil companies agree to increase the oil tax and adjust the oil policy repeatedly and recover the large concession to nationalize the countrys’ petroleum resources. They made a limited production price policy in the situation of the world oil market oversupply in the early 1980s, dominating the world oil industry (Li, 2013). The fourth stage is from 1973 until present time. The price levels fluctuated in the scope that supply and demand can accept and depend more on the markets from 1987 to 1999. The price of crude oil continues to rise after 1999 and it still maintains a high level.
This will result in negative implications on the economic growth in the economy. The consequence of inflation is people will expect prices to rise, then they will consume more to avoid higher costs. Because local trader will hide the stocks or take advantages in the situation that the oil price increase to increase the prices of good. Increase of crude oil price make Malaysia soared to a 26-years high inflation in year 2008, June (Lesova, 2008). In that time, the oil price has increased to USD 145 a barrel (Crude Oil Price History, n.d.), and caused Malaysia to face 7.7 percent inflation in year 2008, June and increase again to 8.5 percent in year 208, July (ssquah, 2008).
These was caused by both the monetary policy and fiscal policy.. Monetary Policy that caused the 2008 crisis By 2005, the Federal Reserve had recognized that they had expanded the monetary policy which caused a higher inflation. Therefore, they started to tighten policy through its standard procedure, of increasing its targeted interest rate, but as usual, the Fed went too far contradicting the government. When Fed increased the bank deposits, it provides the bank with more capital which enabled people to make loans and investments. This process increases money supply, which also increases the spending rate, thus, as the spending increases more than the ability of an economy to produce goods and services, it caused inflation. This was clearly shown, when St. Louis Federal Reserve data on Fed deposit increased by 20 percent that was from April 2001 to 2005, April.
However, between 1976 and 1980 it also increased its total "external debt by a spectacular 67% annually (Clark 1997: 5)," and has not proceeded to slow down. This coupled with the decline of oil prices (from $35 in 1979 to $10 a barrel in 1986) and the rise of real interest rates spelled its doom.
This rise may be a bit surprising due to the recent inflation caused by the increase in oil prices. This inflation has been matched by an increase in nominal wages and salary income. These increases help keep the economy stable. Concerns of the Fed The biggest concern the Fed has is obviously inflation. The rise in oil prices that has influenced a rise in other good and services has been a concern for the past few years.
A steep fall in the current accounts leads to further worsening of the treasury budgets, which in turn, will further worsen the balance between savings and investments. When a country has a fixed nominal exchange rate and there is also an output gap, increases in oil prices leads to an increase in the general price levels. According to a RBI report (2005), for every unit dollar increase in crude oil price, WPI inflation rises by 30 basis points. Kaushik Bhattacharya et al. (2005) analyzed the impact of increase in oil price on inflation.
The Global Financial Crisis forced the government to use the entire surplus and more that had been accrued during the Howard years, (which was recorded at $21 billion at the end of the 2007/8 financial year, and -$30 billion by the end of the 2008/9 financial year); however this use of funds was to great effect. Although many have been sceptical of how the government spent its stimulus package, (first injection ... ... middle of paper ... ...at which point Australia had an unemployment rate of 4.3%. Australia’s rate of unemployment has risen to 5.6% in late 2009, with prospects of higher rates of unemployment. This has required expansionary economic policies to raise aggregate demand levels and increase GDP growth. There are a number of causes of unemployment in the economy.
The current crude oil price spike began early in 1999 due to a variety of factors. Struggle in the Middle East along with minimal policy changes from the Organization of Petroleum Exporting Countries and the U.S. Government has kept prices high to this very day. The History of Oil Crisis Within the United States Before looking at the current oil situation, it is important to understand the times of oil crisis in our country?s past. Through the years between 1970 and 2000, the price of oil has risen and fallen in often-drastic amounts. It is these price fluxuations in crude oil that has caused fuel prices to vary and the economy of the United States to be volatile.
Rising inflation, unemployment and increased government spending marked the period. During the Carter Administration, the nation was introduced to the term stagflation, a combination of stagnation and inflation. Petroleum prices multiplied. The rate of economic growth slowed down. Inflation increased rapidly.