Determinants of an Exchange Rate Essay Example | Topics and Well Written Essays - 2000 words

Determinants of an Exchange Rate - Essay Example The exchange rates between countries are also essential in determining the balance of payments. According to Levich (2001) there is no general theory of exchange rate determination. Various economists apply different theories to come up with the short-run and long-run determinants of exchange rates. However, most of them agree that exchange rates are determined by parity conditions such as inflation, interest rates, and purchasing power. They are also determined by terms of trade, government expenditure and political risks (Dwivedi, 2010). The aim of this paper is to evaluate the main determinants of exchange rate behaviour in the short-run and long-run and explain why exchange rates tend to be volatile and notoriously hard to predict. To better understand the exchange rates, the paper will first discuss the foreign exchange market and then it will look at the exchange rate regimes. It will then discuss the exchange rate determination in foreign exchange market using combination of b alance of payment and asset approach to determination of exchange rate. The IS-LM model developed by Hicks will be used to analyse the changes in the product and money market which have a bearing on exchange rates through balance of payments. This is a market where currencies are traded or domestic currency is exchanged for foreign currency. The market is assumed to be efficient in that the price of the currency in the market is determined by forces of demand and supply (Carbaugh, 2011). The financial market like goods.

Jetblue Research Paper Example | Topics and Well Written Essays - 1250 words

Jetblue - Research Paper Example Some of the features underlying the Jet Blue Airline Company include satellite radio, television on every seat, and some in-flight entertainment (James, 2012). Jet blue airline also has an uncensored single-class system, outstanding flight attendants, a user friendly online air ticketing system, and an Airbus A320s. The airline has scooped awards for its outstanding performance over the years; it was awarded for being the best domestic airline by "Readers' Choice Award" commonly termed as the Conde Nast Traveler. Jet blue also won the "Highest Customer Satisfaction Among Low Cost Carriers in North America" award by J.D. Power and Associates' in 2008. The planes from JetBlue Airline Company connect over 80 destinations including; Bahamas, Las Vegas, West Palm Beach, San Juan, and Puerto Rico (James, 2012). The executive vice president of JetBlue’s systems and technology, John Eng revealed the plans of the airline company to disclose its modern workstation in New York at the Joh n F. Kennedy International Airport. A terminal that if launched would be the peak of one major technological project by the airline. At what is normally called terminal 5 at the John F. Kennedy International Airport, is comprised of 20 check-point security lanes, Wi-Fi all over the terminal and the planes, 65 e-ticketing kiosks and 40ticket counters, and self –service all over the terminal (James, 2012). The Jet Blue Company also broke up its contract with the Navitaire Company; a move which Navitaire claims is as a result of JetBlue’s misperception about the ability of the company’s functionality. According to Navitaire, it was providing JetBlue Company with an Open Skies platform. The Navitaire Company move to transit from the open Skies platform to New Skies system is one of the contributing factors that made JetBlue break their contract and sign a new contract with Sabre e-ticketing. The New Skies platform is designed to work with a ticketless model of which money is not attached to an individual ticket but to the customer record (James, 2012). However, Navitaire defends its ticketless New Skies as more effective and efficient than the Sabre e-ticket model since the New Skies can avoid the need of relocating data out and back among numerous systems. Despite of the new ticketing technology that allows for ticketless model that is attached to customer records, Jet Blue Airline chose to remain with their usual ticketing model with SabreSonic. Navitaire Company perceives Jet Blue’s luxity to adopt the new e-ticketing system that embraces a ticketless model, as a decision that has been influenced by having a team that has roots with the U.S legacy carriers (James, 2012). Navitaires states that JetBlue cannot understand the benefits that come with the new ticketless model. The benefits mentioned include; flexibility of services, reduced costs, and ticketing efficiencies. The Chief executive Officer (CEO) and president of JetBlue Airli ne, David Barger confirmed against Navitaires perceptions and stated that Sabre will provide his company with numerous benefits. Berger continues and says that the new platform adopted by Jet Blue provides the company with robust and flexible tools to increase the products and services rendered to their customers. The CEO adds on that the technological system will help in further augmenting the brand of the airline and advancing the general customer