The Limits to Macroeconomic Policy

The Limits to Macroeconomic Policy

A country’s economy represents an equilibrium driven by the vast workings of many moving parts. Some of these parts include governments, policy makers, trade partners, international investors and banking authorities. Today’s technological advancements have made it easier than ever for monies to traverse national borders quickly and efficiently. This capability facilitates inflows and outflows of capital in response to signals. Not all of these signals are economic yet the effects can have a devastating impact.

Assessment

Economic crisis has precipitated many changes throughout the course of history. Whether it is the great depression of the 1930’s, the Latin Debt crisis in the early 1980’s or more recently the financial collapse of the U.S. housing market in 2007, crisis precipitates change. Changes within macroeconomic policies surrounding monetary, fiscal or political programs are adjusted to reverse negative trends and sustain long term positive growth. There is a sort of yin and yang balance to economic policies evolves and cycles through a continuum of consumption and conservation (Cervone & Shoda, 1999).

A country attempts to optimize the balance of consumption and conservation, in order to maximize productive economic growth. The primary drivers used to change economic outcomes are fiscal and monetary policies. These policies are adjusted based on trends associated with consumption and conservation patterns. Policy makers, whether government or independent (e.g. Central Banking Authorities such as the Federal Reserve), evaluate risk factors associated with these trends, in conjunction with historical events, in order to prevent negative economic outcomes. These idiosyncratic ...

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...is and change in both monetary and fiscal policies toward the betterment of economic outcomes.

Works Cited

Cervone, D., & Shoda, Y. (1999). Yin and Yang of the Japanese Self. The Coherence of Personality (). New York: The Guilford Press.

Lee, C. (February, 1992). The government, financial system, and large private enterprises0in the economic development of South Korea. World Development, 20. Retrieved May 2, 2014, from http://www.sciencedirect.com/science/article/pii/0305750X9290098G

Gerber, J. (2011). International economics. (5th ed.). Upper Saddle River, NJ: Prentice

Limitations of Macro Economics. (n.d.). Economics Exposed. Retrieved May 2, 2014, from http://economics-exposed.com/limitations-of-macro-economics/

South Korean Education Reform. (n.d.). . Retrieved May 2, 2014, from http://asiasociety.org/education/learning-world/south-korean-education-reforms