Text 3 for question.

In addition to her impending, and no doubt ultimately successful, quest for Senate confirmation, Janet Yellen will have a lot on her plate in the coming months. Now that House Republicans and Senate Democrats have come to yet another temporary agreement on the budget and debt ceiling, there still exists another threat to the economy: The Federal Reserve’s temptation to pursue an overly ambitious monetary policy aimed at offsetting the damage to the economy arising from poorly conducted fiscal policy. Now that President Obama’s Fed Chairman nominee has been announced, the Fed needs to shift its focus from wondering who will lead it to what its realistic goals can be. Substantially different views are held by Fed hawks and doves.

The economy is still on uncertain footing, and public frustration with the Fed is increasing, especially since the May taper into September no-taper serious misstep. The Fed seems to be making up policy as it goes along. It has become distracted with trying to fix problems it is not well-equipped to handle, including sustained lower unemployment and a faster pace of growth than is obtainable during a period of fiscal consolidation and weak global growth.

The Fed’s post-financial crisis mission creep, since 2008, has fueled an unhealthy codependence between it and the market, akin to the infamous pre-crisis “Greenspan put,” whereby the Greenspan Fed was expected to — and did — step in to support financial markets whenever there arose a threat to rising asset markets. Markets assume the Fed can and will fix any problems, such as the latest episode of Washington’s fiscal policy bungling, that might harm the economy or depress stock prices. Once necessary, but now dangerous, improvisations of monetary policy — quantitative easing and forward guidance in particular — have become alternately ineffective and counter productive, as the recent tapering trauma has shown. Yellen, as the primary author of the Fed’s new communication strategy, needs to identify ways to improve the Fed’s communication with markets and the public.

The Fed has come a long way since its founding one hundred years ago. Its original role was to be the lender of last resort in a financial crisis. That role, as a temporary emergency supplier of liquidity in a panic, has continued and should continue going forward. But in the postfinancial crisis period, the Fed has been forced to accommodate the extra cash demands of households and firms confronting a world of elevated uncertainty about the direction and conduct of monetary and fiscal policy. That is because higher uncertainty has forced firms and wealthy households to self-insure against possible bad outcomes and to preserve optionality in the face of unforeseen shocks and opportunities.

Failure by the Fed to satisfy higher cash demands worsened the Great Depression in the United States and the deflationary lost decade in Japan. These elevated, postcrisis cash needs explain why the Fed’s rapid additions to the monetary base through quantitative easing have been followed by disinflation, not inflation, as many have predicted. Chairman Yellen will have to be vigilant to avoid tightening too soon, while uncertainty remains high.

Makin, John H. The challenge of a lifetime. In: The international economy.

Fall 2013, p. 10-11. Available at: <http: //www .internationaleconomy. com>. Adapted. Retrieved on: March 1, 2014.

Based on the article (text 3), decide if the item are right (C) or wrong (E).

The author compares the Federal Reserve’s post-financial crisis policy with the pre-financial policy which consisted of supporting asset markets financially whenever they were at risk.

Text 1

Book Review 1 –

Karachi: Ordered Disorder and the Struggle for the City

by Laurent Gayer

With an official population approaching fifteen million, Karachi is one of the largest cities in the world. It is also the most violent. Since the mid-1980s, it has endured endemic political conflict and criminal violence, which revolve around control of the city and its resources (votes, land and bhatta — “protection” money). These struggles for the city have become ethnicized. Karachi, often referred to as a “Pakistan in miniature”, has become increasingly fragmented, socially as well as territorially.

Despite this chronic state of urban political warfare, Karachi is the cornerstone of the economy of Pakistan. Gayer’s book is an attempt to elucidate this conundrum. Against journalistic accounts describing Karachi as chaotic and ungovernable, he argues that there is indeed order of a kind in the city’s permanent civil war. Far from being entropic, Karachi’s polity is predicated upon organisational, interpretative and pragmatic routines that have made violence “manageable” for its populations. Whether such “ordered disorder” is viable in the long term remains to be seen, but for now Karachi works despite — and sometimes through — violence.

Source: <www.amazon.com>. Retrieved on: March 2, 2014.

Text 2

Book Review 2 –

The China-Pakistan Axis: Asia’s New Geopolitics

by Andrew Small

The Beijing-Islamabad axis plays a central role in Asia’s geopolitics, from India’s rise to the prospects for a post-American Afghanistan, from the threat of nuclear terrorism to the continent’s new map of mines, ports and pipelines. China is Pakistan’s great economic hope and its most trusted military partner; Pakistan is the battleground for China’s encounters with Islamic militancy and the heart of its efforts to counter-balance the emerging US-India partnership. For decades, each country has been the other’s only ‘all-weather’ friend. Yet the relationship is still little understood. The wildest claims about it are widely believed, while many of its most dramatic developments are hidden from the public eye. This book sets out the recent history of Sino-Pakistani ties and their ramifications for the West, for India, for Afghanistan, and for Asia as a whole. It tells the stories behind some of its most sensitive aspects, including Beijing’s support for Pakistan’s nuclear program, China’s dealings with the Taliban, and the Chinese military’s planning for crises in Pakistan. It describes a relationship increasingly shaped by Pakistan’s internal strife, and the dilemmas China faces between the need for regional stability and the imperative for strategic competition with India and the USA.

Source: <www.amazon.com>. Retrieved on: March 2, 2014.

Based on the information conveyed by the two book reviews, judge the item right (C) or wrong (E).

The two books approach political issues in Pakistan from an international perspective.

Text 4 for question.

Bertrand Russell once predicted that the socialization of reproduction — the supersession of the family by the state — would “make sex love itself more trivial,” encourage “a certain triviality in all personal relations,” and “make it far more difficult to take an interest in anything after one’s own death.” At first glance, recent developments appear to have refuted the first part of this prediction. Americans today invest personal relations, particularly the relations between men and women, with undiminished emotional importance. The decline of childrearing as a major preoccupation has freed sex from its bondage to procreation and made it possible for people to value erotic life for its own sake. As the family shrinks to the marital unit, it can be argued that men and women respond more readily to each other’s emotional needs, instead of living vicariously through their offspring. The marriage contract having lost its binding character, couples now find it possible, according to many observers, to ground sexual relations in something more solid than legal compulsion. In short, the growing determination to live for the moment, whatever it may have done to the relations between parents and children, appears to have established the preconditions of a new intimacy between men and women.

This appearance is an illusion. The cult of intimacy conceals a growing despair of finding it. Personal relations crumble under the emotional weight with which they are burdened.

The inability “to take an interest in anything after one’s own death,” which gives such urgency to the pursuit of close personal encounters in the present, makes intimacy more elusive than ever. The same developments that have weakened the tie between parents and children have also undermined relations between men and women. Indeed the deterioration of marriage contributes in its own right to the deterioration of care for the young.

This last point is so obvious that only a strenuous propaganda on behalf of “open marriage” and “creative divorce” prevents us from grasping it. It is clear, for example, that the growing incidence of divorce, together with the ever-present possibility that any given marriage will end in collapse, adds to the instability of family life and deprives the child of a measure of emotional security. Enlightened opinion diverts attention from this general fact by insisting that in specific cases, parents may do more harm to their children by holding a marriage together than by dissolving it. More often the husband abandons his children to the wife whose company he finds unbearable, and the wife smothers the children with incessant yet perfunctory attentions. This particular solution to the problem of marital strain has become so common that the absence of the father impresses many observers as the most striking fact about the contemporary family. Under these conditions, a divorce in which the mother retains custody of her children merely ratifies the existing state of affairs — the effective emotional desertion of his family by the father. But the reflection that divorce often does no more damage to children than marriage itself hardly inspires rejoicing.

Christopher Lasch. The Cult of Narcissism. Abacus, Londres, 1980 p. 320-322 (adapted).

Based on the text, decide if the following statements about the author’s assessment of the family situation in America are right (C) or wrong (E).

It is an oversimplification to attribute the destruction of the basic fabric of the traditional family to the search for sex for its own sake and to the increasing growth of the rate of divorce.

Text 3 for question.

In addition to her impending, and no doubt ultimately successful, quest for Senate confirmation, Janet Yellen will have a lot on her plate in the coming months. Now that House Republicans and Senate Democrats have come to yet another temporary agreement on the budget and debt ceiling, there still exists another threat to the economy: The Federal Reserve’s temptation to pursue an overly ambitious monetary policy aimed at offsetting the damage to the economy arising from poorly conducted fiscal policy. Now that President Obama’s Fed Chairman nominee has been announced, the Fed needs to shift its focus from wondering who will lead it to what its realistic goals can be. Substantially different views are held by Fed hawks and doves.

The economy is still on uncertain footing, and public frustration with the Fed is increasing, especially since the May taper into September no-taper serious misstep. The Fed seems to be making up policy as it goes along. It has become distracted with trying to fix problems it is not well-equipped to handle, including sustained lower unemployment and a faster pace of growth than is obtainable during a period of fiscal consolidation and weak global growth.

The Fed’s post-financial crisis mission creep, since 2008, has fueled an unhealthy codependence between it and the market, akin to the infamous pre-crisis “Greenspan put,” whereby the Greenspan Fed was expected to — and did — step in to support financial markets whenever there arose a threat to rising asset markets. Markets assume the Fed can and will fix any problems, such as the latest episode of Washington’s fiscal policy bungling, that might harm the economy or depress stock prices. Once necessary, but now dangerous, improvisations of monetary policy — quantitative easing and forward guidance in particular — have become alternately ineffective and counter productive, as the recent tapering trauma has shown. Yellen, as the primary author of the Fed’s new communication strategy, needs to identify ways to improve the Fed’s communication with markets and the public.

The Fed has come a long way since its founding one hundred years ago. Its original role was to be the lender of last resort in a financial crisis. That role, as a temporary emergency supplier of liquidity in a panic, has continued and should continue going forward. But in the postfinancial crisis period, the Fed has been forced to accommodate the extra cash demands of households and firms confronting a world of elevated uncertainty about the direction and conduct of monetary and fiscal policy. That is because higher uncertainty has forced firms and wealthy households to self-insure against possible bad outcomes and to preserve optionality in the face of unforeseen shocks and opportunities.

Failure by the Fed to satisfy higher cash demands worsened the Great Depression in the United States and the deflationary lost decade in Japan. These elevated, postcrisis cash needs explain why the Fed’s rapid additions to the monetary base through quantitative easing have been followed by disinflation, not inflation, as many have predicted. Chairman Yellen will have to be vigilant to avoid tightening too soon, while uncertainty remains high.

Makin, John H. The challenge of a lifetime. In: The international economy.

Fall 2013, p. 10-11. Available at: <http: //www .internationaleconomy. com>. Adapted. Retrieved on: March 1, 2014.

Based on the article (text 3), decide if the item are right (C) or wrong (E).

By saying that Janet Yellen “will have a lot on her plate in the coming months”, the author implies she will have too many issues to worry about or deal with during her chairmanship.

Text 3 for question.

In addition to her impending, and no doubt ultimately successful, quest for Senate confirmation, Janet Yellen will have a lot on her plate in the coming months. Now that House Republicans and Senate Democrats have come to yet another temporary agreement on the budget and debt ceiling, there still exists another threat to the economy: The Federal Reserve’s temptation to pursue an overly ambitious monetary policy aimed at offsetting the damage to the economy arising from poorly conducted fiscal policy. Now that President Obama’s Fed Chairman nominee has been announced, the Fed needs to shift its focus from wondering who will lead it to what its realistic goals can be. Substantially different views are held by Fed hawks and doves.

The economy is still on uncertain footing, and public frustration with the Fed is increasing, especially since the May taper into September no-taper serious misstep. The Fed seems to be making up policy as it goes along. It has become distracted with trying to fix problems it is not well-equipped to handle, including sustained lower unemployment and a faster pace of growth than is obtainable during a period of fiscal consolidation and weak global growth.

The Fed’s post-financial crisis mission creep, since 2008, has fueled an unhealthy codependence between it and the market, akin to the infamous pre-crisis “Greenspan put,” whereby the Greenspan Fed was expected to — and did — step in to support financial markets whenever there arose a threat to rising asset markets. Markets assume the Fed can and will fix any problems, such as the latest episode of Washington’s fiscal policy bungling, that might harm the economy or depress stock prices. Once necessary, but now dangerous, improvisations of monetary policy — quantitative easing and forward guidance in particular — have become alternately ineffective and counter productive, as the recent tapering trauma has shown. Yellen, as the primary author of the Fed’s new communication strategy, needs to identify ways to improve the Fed’s communication with markets and the public.

The Fed has come a long way since its founding one hundred years ago. Its original role was to be the lender of last resort in a financial crisis. That role, as a temporary emergency supplier of liquidity in a panic, has continued and should continue going forward. But in the postfinancial crisis period, the Fed has been forced to accommodate the extra cash demands of households and firms confronting a world of elevated uncertainty about the direction and conduct of monetary and fiscal policy. That is because higher uncertainty has forced firms and wealthy households to self-insure against possible bad outcomes and to preserve optionality in the face of unforeseen shocks and opportunities.

Failure by the Fed to satisfy higher cash demands worsened the Great Depression in the United States and the deflationary lost decade in Japan. These elevated, postcrisis cash needs explain why the Fed’s rapid additions to the monetary base through quantitative easing have been followed by disinflation, not inflation, as many have predicted. Chairman Yellen will have to be vigilant to avoid tightening too soon, while uncertainty remains high.

Makin, John H. The challenge of a lifetime. In: The international economy.

Fall 2013, p. 10-11. Available at: <http: //www .internationaleconomy. com>. Adapted. Retrieved on: March 1, 2014.

Considering the information about the Federal Reserve conveyed in the article (text 3), decide if the item are right (C) or wrong (E).

Its procedures to counterbalance the consequences of the government’s fiscal policy are a threat to the country’s economy.

Texte IV — pour le question

[…] A la chute du mur de Berlin, un vent d’espoir avait soufflé sur le monde. La fin de la confrontation entre l’Occident et l’Union soviétique avait levé la menace d’un cataclysme nucléaire qui était suspendue au-dessus de nos têtes depuis une quarantaine d’années ; la démocratie allait désormais se répandre de proche en proche, croyions-nous, jusqu’à couvrir l’ensemble de la planète; les barrières entre les diverses contrées du globe allaient s’ouvrir, et la circulation des hommes, des marchandises, des images et des idées allait se développer sans entraves, inaugurant une ère de progrès et de prospérité. Sur chacun de ces fronts, il y eut, au début, quelques avancées remarquables. Mais plus on avançait, plus on était déboussolé.

Un exemple emblématique, à cet égard, est celui de l’Union européenne. Pour elle, la désintégration du bloc soviétique fut un triomphe. Entre les deux voies que l’on proposait aux peuples du continent, l’une s’était révélée bouchée, tandis que l’autre s’ouvrait jusqu’à l’horizon. Les anciens pays de l’Est sont venus frapper à la porte de l’Union; ceux qui n’y ont pas été accueillis en rêvent encore.

Cependant, au moment même où elle triomphait et alors que tant de peuples s’avançaient vers elle, fascinés, éblouis, comme si elle était le paradis sur terre, l’Europe a perdu ses repères. Qui devrait-elle rassembler encore, et dans quel but ? Qui devrait-elle exclure, et pour quelle raison ? Aujourd’hui plus que par le passé, elle s’interroge sur son identité, ses frontières, ses institutions futures, sa place dans le monde, sans être sûre des réponses. […]

Amin Maalouf. Le dérèglement du monde. p. 17 et 18. 2009 (extrait).

En fonction des affirmations de l’auteur dans le texte IV, jugez si le item suivants sont vrais (C) ou faux (E).

Juste après la chute du mur de Berlin, les pays européens étaient désorientés.