Research Paper on Floating Exchange Rate Regime: Implications & Impact

Introduction

The exchange rate is the value for example of nation or country currency exchanged in terms of another currency. Exchange rate regime is linked with monetary policies as it's a concept that a government employ rate their respective currencies in other major currencies of the world. Exchange rate regimes can be named us floating, pegged float and fixed floats exchange rate.

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In the floating exchange rate regime case value currencies are influenced by financial markets movements and it's extensively used in countries like Japan in their Japanese Yen. Also known as dirty float or managed float and it consist of three types known as crawling band, pegging with horizontal band and the crawling band.

In crawling band there are some limits for the exchange rates during fluctuation while values based on certain central value while there is fixed exchange rates in crawling pegs and hence within an horizontal peg exchange rate is allowed within specified limits considered more than one percent more than the band. Example of an exchange rate regime of a developed nation for example Japan.

Figure: Showing the exchange rates regime.

From the graph above fluctuations occurs between different exchange rates in greater margin difference as from above some have high exchange rate regime while some showing the neutral parts to some extent until they stabilise where a small difference appear to occur.

Taxation policy in Japan.Taxation income s primary depends on national income tax and residential tax, other taxes are exercise tax, property and enterprise tax, vehicle tax of which are taxed at certain level for example municipal level. In japan taxes patents, unity models, trademarks, copyrights and trade secrets are taxed in Japan

Human capital (e.g. higher education) IN JAPAN AND AUSTRALIA.Human capital is a measure of skills activities such as education, capacity and labour attributes as the influence earning potential and capacity production. The graph above shows the example of employed human capital.

It reflects the rise and fall of human in real wages. This shows that human capital is determined by a so many factors for example work experience, social skill such as communication, emotional intelligence and judgement. They help in addition of advantages in the work business to a mass more profit. Therefore human capital in japan and Australia in primary and secondary sector are have greater capacity of jobs as it require different skills and of which it's difficult to measure their output.

Human capital can be increased through division of labour whereby everyone should concentrate in the areas they understand the most. Others include vocational training, competitiveness and a climate of creativity.

Effects of Global Financial Crisis in Japan

The financial crisis in Japan happened in 2008-2009 and hit the country so hard. The demand of Japanese products decreased due to the worldwide slowdown. This was brought about by high value of Yen being so high thus making the prices of Japanese products expensive which lowered their demand. The level of confidence for both business and customers lowered. This was accompanied by high rates of unemployment within the two years. The ratio of the jobs which were available to the people who were seeking jobs had reached 9: Exporters orders reduced by a whopping 40 percent. Employees lacked productive things to do and found themselves sweeping floors.

References

School enrollment, tertiary (% gross). (n.d.). Retrieved from https://data.worldbank.org/indicator/se.ter.enrrTax revenue (% of GDP). (n.d.). Retrieved from http://data.worldbank.org/indicator/GC.TAX.TOTL.GD.ZSEffective exchange rate indices. (2019, May 9). Retrieved from http://www.bis.org/statistics/eer.htm