Impact of NAFTA & Inflation on Real Estate in Texas Real estate has traditionally provid

One definition of inflation is that it results when available volume and credit exceeds available goods and services (Sperandeo, August 16, 1993, p. 10). During inflationary times, prices are driven up by too many dollars chasing too few goods. From this standpoint, inflation measures the growth of an economy. However, too much inflation and the economy grows stagnant: prices increase faster than goods and services can be produced, shortages occur, interest rates soar and the economy slows down. For these reasons, some amount of inflation is necessary; it is the Federal Reserve's role (through monetary policy) and the government's role (through fiscal policy) to control infla

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an have undue influence over the rest. If a small bank increases or decreases its prime lending rate, the remainder of the industry is not likely to pay much heed. However, if a large bank, such as Citibank, Bank of America or Mitsui increases its prime rate, other banks will pay considerably more attention. Monetary policy, therefore, depends on the vagaries and competition of the marketplace to accomplish its overall goals. NAFTA The North American Free Trade Agreement (NAFTA) seeks to create a trading bloc consisting of Canadian, the United States, and Mexico. The bulk of the treaty was negotiated by the Bush administration, but it falls to the Clinton administration to coordinate its ratification by Congress. To understand NAFTA's effect, it is necessary to understand the environment into which NAFTA will be implemented. Mexico effectively restructured its economy during the late 1980s. Prior to that time, the country was highly protectionist and socialist, unable to compete on an international basis, and heavily reliant on its oil reserves. In addition, Mexico had a high level of debt (much of it to American financial institutions) (Peak, March 1993, p. 11). Under President Carlos Salinas de Gortari, the number of
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Some common words found in the essay are:
Federal Reserve, Peak March, Texas NAFTA, Texas Real, Koretz June, Reserve Board, Mexico NAFTA, C22 Individual, Welsh June, A1 Inflation, real estate, home prices, prime rate, funds rate, estate industry, federal funds, real estate industry, federal funds rate, trade mexico, real estate prices, consumer price, estate prices, mortgage rates, consumer price index, peak march 1993,
Approximate Word count = 5764
Approximate Pages = 23 (250 words per page)