The Current Macroeconomics Situation

1947 Words4 Pages
bulb-icon

Recommended: Monetary and fiscal policy great recession

THE CURRENT MACROECONOMICS SITUATION It seems that it is apparent that the current macroeconomics situation in US is bit difficult in numerous ways. The situation relating to employment, inflation, monetary and fiscal policies has been detrimental to US citizens who have undergone through an trembling economy for a lot of years. When there is enlargement in monetary activity, then the affluence will be experienced by a larger number of fiscal entities, in addition to industries, firms, workers, owners of capital as well as others. When there is a fall in fiscal activity, then the segment of companies’ encounters with decrease in production and further sectors of the financial system with the decrease in consumption. Accordingly due to reduced production, the companies lay off certain employees or condensed their hours in addition to their wages. These pessimistic trends have an effect on the decline of standard of living as well as excellence of life of inhabitants and augment the deficiency rate, which positively represent the most complicated difficulty for each nation. Consequently, economists attempt to determine the causes of these affairs (stages) of trade cycles and formulate suggestions concerning what could be done by way of suitable economic policies to tone down such depressing phenomena of depression. Recession ought not to be observed as incident from which there is no way out, but as a very severe indicator that point out that the financial system is unhealthy and we ought to take dynamic measures to its quicker recuperation. Some basic theories of Macro Economics Keynesian theories aim at the role that customer self-confidence plays in the time of recessions. When consumers start on to sense pessimistic regardi... ... middle of paper ... ... as all its levels, as well as the affect of recession on US economy plus on real macroeconomic variables. Works Cited - U.S. Bureau of Economic Analysis www.fedstats.gov/key_stats/index • Blanchard, O. Zobeiri, H 2009.: Continuance of Global Economy Improving, Economic and Political Ettelaat, 265-266, 2009. • Cauchon, Dennis: Why Home Values May Take Decates to Recover, USA Today, 2009. • Even, S. and Feldman, N 2009.:"Implications of the global Economic crisis".2009. • Funa, L.: "The relevance of Keynesian economics in times of economic crisis" Undergraduate thesis, University of Lyublgana. 2009. • Ghadiri Asli, B 1990.: History of Economic Thought, Tehran University Publish, 1990 • A., B. Abel and B.,S. Bernanke: Macroeconomics, 4th ed, Addison-Wesley. • Begg, D., Fisher,S., and Dornbusch, R., (2000): Economics, sixth edition, McGraw-Hill.

Show More
Related

  • Dinner Party Economics Summary

    1243 Words  | 3 Pages

    Throughout Eveline Adomait and Richard Maranta’s Dinner Party Economics there is continuous discussion surrounding the problems that economies face around the world and the various methods that can be used to alter the state of the current economic conditions. Changes in consumer spending patterns can become a problem for the economy as a whole, potentially resulting in over-inflation or recession. Implementing discretionary policies such as monetary policy through changing interest rates, and fiscal policy through taxation and government spending, makes it possible to fix these economic problems.

    Read More

  • The Pros And Cons Of Macropoland

    719 Words  | 2 Pages

    In conclusion, regardless of Macropoland’s current economic condition, it is fair to say that it is all part of the business cycle. The business cycle has three parts: peak, trough, and peak. The peak is the date that the recession starts. In Macropoland’s case, the peak would be at the beginning of 1973, its trough somewhere between 1973 and 1974, and then its peak again at 1974. In the second scenario, Macropoland is either at its trough, where it is about to head up again because of its low inflation rate, or it is at its expansion, on its way to heading to its next peak.

    Read More

  • The Brilliance of Conservative Economist Milton Friedman

    2621 Words  | 6 Pages

    6. Alan S. Blinder. "Keynesian Economics." The Concise Encyclopedia of Economics. 2008. Library of Economics and Liberty. Retrieved May 28, 2010 from the World Wide Web: http://www.econlib.org/library/Enc/KeynesianEconomics.html

    Read More

  • The Return of Depression Economics and the Crisis of 2008

    1076 Words  | 3 Pages

    In The Return of Depression Economics and the Crisis of 2008, Paul Krugman warns us that America’s gloomy future might parallel those of other countries. Like diseases that are making a stronger, more resistant comeback, the causes of the Great Depression are looming ahead and much more probable now after the great housing bubble in 2002. In his new and revised book, he emphasizes even more on the busts of Japan and the crises in Latin America (i.e: Argentina), and explains how and why several specific events--recessions, inflationary spiraling, currency devaluations--happened in many countries. Although he still does not give us any solid options or specific steps to take to save America other than those proposed by other economists, he thoroughly examines international policies and coherently explains to us average citizens how the world is globalizing--that the world is becoming flatter and countries are now even more dependent on each other.

    Read More

  • Compare And Contrast Keynes And Hayek

    1556 Words  | 4 Pages

    Keynes and Hayek represent different options. Should we steer markets or set them free? “Which way should we choose, More bottom up or more top down?” (Fight of the Century). These questions reflect the opposite ways Keynes and Hayek address the economy. Keynes wants to “steer” the economy from the “top down.” From his understanding of the economy, Keynes theorizes that the market can be directed by those with the power to do so to accomplish goals leading to a prosperous economy. This is the basis in his approach to dealing with recessions where the government or central bank manipulates the economy. The other side is a free market from the “bottom up” on which Hayek stakes his claim. Instead of steering the economy, Hayek proposes to leave it alone. Do not try to control it, but let the market determine the interest rate and price level, as it eventually will, through supply and demand. In this way, control is not exerted downward, but reality is expressed from basic economic forces. Fundamentally, Keynes’s model focuses more on the spending and consumption aspects of GDP, and Hayek’s approach focuses more on the investing aspect which flows from saving. These are the options from which to choose. Keynes vs. Hayek, Short run vs. long run, controlled vs. free, top down vs. bottom up, each possibility has its negatives and positives. This debate is not wrapped up

    Read More

  • The 2008 Recession Affected The Global Economy

    1547 Words  | 4 Pages

    With lower rats of employment the United States Federal Reserve needed monetary policy to stimulate the economy. With many individuals loosing their jobs primarily in the housing sector the spiral continued through other sectors. It was not only builders and contractors who lost their jobs. The housing and development market affects many other markets. Builders affect the pluming, wood, furniture, lighting, electricity, and supplier’s side of the market as well. With builders and developers loosing their business, going bankrupt, not getting investments they left their suppliers without payments. This caused unemployment in many other sectors of the economy. This lead to many individuals without jobs, and the job market tightening down, which lead to decreases in both savings and spending in the United States money market.

    Read More

  • Analysis of Discretionary Fiscal Policy

    693 Words  | 2 Pages

    By the 1960s, economists were overconfident with discretionary fiscal policy because they thought it would eliminate the instability of the recession. They thought of discretionary fiscal policy as more of a fantasy. The economists believed this idea because in the 1950s, and 1960s they thought Congress would know how to use the desired stimulus to get the economy back to a desired level of RGDP. However they were wrong, since the poor performance during the 1970s the economists have transformed to ardent detractors. The reasons d...

    Read More

  • Economics: Keynes vs. Hayek

    1730 Words  | 4 Pages

    middle of paper ... ... 06 Nov.2011 Cochran, J. P., and F. R. Glahe. “The Keynes-Hayek Debate: Lessons for Contemporary Business Cycle Theorists.” History of Political Economy 26.1. (1994): 69-94.

    Read More

  • Classical Economics vs. Keynesian Economics

    1187 Words  | 3 Pages

    My research of Classical Economics and Keynesian Economics has given me the opportunity to form an opinion on this greatly debated topic in economics. After researching this topic in great lengths, I have determined the Keynesian Economics far exceeds greatness for America compared to that of Classical Economics. I will begin my paper by first addressing my understanding of both economic theories, I will then compare and contrast both theories, and end my paper with my opinions on why I believe Keynesian Economics is what is best for America.

    Read More

  • Advantages And Disadvantages Of Neo Marxism

    1003 Words  | 3 Pages

    Keynesian method and world-systems theory deserve special attention. It is Keynesianism that makes possible for the radical political economists to apply the bipolar model, centered on

    Read More

  • Difficulties in Formulating Macroeconomic Policy

    1999 Words  | 4 Pages

    Difficulties in Formulating Macroeconomic Policy Policy makers try to influence the behaviour of broad economic aggregates in order to improve the performance of the economy. The main macroeconomic objectives of policy are: a high and relatively stable level of employment; a stable general price level; a growing level of real income (economic growth); balance of payments equilibrium, and certain distributional aims. This essay will go through what these difficulties are and examine how these difficulties affect the policy maker when they attempt to formulate macroeconomic policy. It is difficult to provide a single decisive factor for policy evaluation as a change in political and/or economic circumstances may result in declared objectives being changed or reversed. Economists can give advice on the feasibility and desirability of policies designed to attain the ultimate targets, however, the ultimate responsibility lies with the policy maker.

    Read More

  • Has Financial Development Made the World Riskier?

    993 Words  | 2 Pages

    Rajan discusses three primary fault lines in the financial sector; the first being the domestic political stresses, especially in the United States. Starting in 1991, Rajan argues that recessions have mostly been “jobless” where there are more jobs being lost than created and inefficient jobs are being lost due to technology increase. Policymakers look for a quick fix to unemployment and offer easy solutions such as lower interest rates, promote homeownership instead of fixing the root of the cause (improving education and retraining employees). Coupled with a weak safety net, there is more jobless anxiety and eventua...

    Read More

  • The Advantages and Disadvantages of Free Trade

    1549 Words  | 4 Pages

    Ferguson, S (1999) Keynesian Theory and its implication, College of Management and Economics, Canada University, 298-312

    Read More

  • The Global Macroeconomic Environment

    1224 Words  | 3 Pages

    The macroeconomic environment is a dynamic environment, which could not remain unchanged (Gajewsky 2015). There are many factors influence the global macroeconomic environment, such as interest rate, exchange rate, GDP，aggregate demand, monetary policy and other macroeconomic variable (Oxelheim and Wihlborg 2008). These factors are closely associated with commodity price.

    Read More

  • Macroeconomic Objectives Essay

    1754 Words  | 4 Pages

    The economy tend to move from boom to recession, it is difficult for government to maintain and achieve macroeconomics objectives. At this time, there are “conflicts between government macroeconomic objectives”, which is this extended essay main theme. This essay will look at the government macroeconomic objectives, the conflicts between macroeconomics objectives, the best policy or mixture of policies to minimize the conflicts between macroeconomics objectives and recommendations, which are classified as main objectives and additional objectives.

    Read More

More about The Current Macroeconomics Situation

Open Document