Friday, April 26, 2019

Government Impact on Economy Research Paper Example | Topics and Well Written Essays - 250 words

Government Impact on Economy - Research newspaper publisher ExampleSome economists, such as William McChesney Martin, view the economy as inherently unstable epoch others, such as Milton Friedman, argue that it is naturally stable (Mankiw, 1997). Due to this argument, policymakers view economic stabilization as one of their primary responsibilities. So they make laws that will try to stabilize the economy. These lawmakers, together with many economists, believed that in the absence of an active government role in the economy, events like the Great Depression could occur on a regular basis (Mankiw, 1997). Recessions are periods wherein the economy experiences high un involution rate, as a result, there will be lower income and trim down economic well-being. Monetary and fiscal policies can prevent recessions by responding to the shocks in the aggregate demand and supply. Economists withal view it wasteful if the policy instruments were not used to stabilize the economy. However, t he economic stabilization would be golden if the impacts of both monetary and fiscal policies were immediate because sometimes the lags between the implementation and effects of policies make change the economy more difficult. Then, the need for automatic stabilizers comes in. These are the policies designed to reduce the lags associated with stabilization policy.It is very construct that the government should and must take a hands-on approach to macroeconomic policy to affect the employment environment. They should take full control over the policies that would have impacts on the economy, especially in the employment environment.

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