Research-method-essay.docx - THE IMPACT OF POUNDS...

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THE IMPACT OF POUND’S DEPRESSION ON INFLATION IN UNITED KINGDOM (UK) (Data Collection and Regression Analysis) JuoYun Tsai (Vicky) 02550546 TzuLing Yeh (Sandy) 03571775 YuehHan Lin (John) 03570870 Vu Nguyen Uyen My (Min) 05910493
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I. INTRODUCTION From the first beginning, we will make a brief explanation about what is inflation and exchange rate. The former means the rate of increase in the price level while the latter means the price of a nation’s currency. Since then, I believe that we all may come up with the idea that exchange rate and inflation may be closely related or linked together. However, only knowing the relationship between them is not enough we still need to figure it out the impact between these two and to put the country into practice. The United Kingdom has a regulated market economy. Based on some information we can find out that the United Kingdom is being ranked as the fifth-largest economy in the world and in Europe it goes after Germany as the second-largest economy. When it says to the United Kingdom, we will then think of London, which is its capital. It said that London has always been the top three of the global economic cities in the world and its GDP was even the largest among all other European cities. Nevertheless, according to the data “The World Factbook”, a book that provides the summary of all kind of aspects of the country, has announced that until August, 2016 the inflation rate of the United Kingdom has gone to 0.6%. Besides the “The World Factbook”, there is still an inflation report that releases to public in every February, May, August, and November by the Bank of England, which is the United Kingdom’s central bank and has the duty to issue notes and coins. Some surveys indicated that the relationships between changes in currency values, both internal and external, and the international investing, trading, production, and making decisions of multinational firms are clearly of great interest to the national governments involved. (Alan C. Shapiro 1975.) From here we can find out that one country’s currency will affect a country and also how other countries think about it. While there was also said that the exchange rate pass-through to import prices for a large number of countries is incomplete and
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