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Kyuhwan L

How to Know When to Tax and When to Spend - 1 views

truth-out.org/...-when-to-tax-and-when-to-spend

business cycle government spending taxation recession prosperity

shared by Kyuhwan L on 03 Mar 13 - No Cached
  • Kyuhwan L on 03 Mar 13
     
    I really found this article interesting because it explains the strategy of taxation that aligns with the business cycle. It explains that during times of economic hardship, a recession, then government should increase spending to first "soft blow for businesses and average working people," but to also stimulate the economy and move on to recover. This is reflected by the Keynesian theory of economy, where the government intervention is necessary to put the economy back on the right track. On the other hand, the government should relax expenditure and slightly increase tax to pay off deficit. This strategy is also supported by history, where the article gives examples of past U.S. presidents and government decisions during different times of the business cycle.
  • ...1 more comment...
  • Andrzej Z on 07 Mar 13
     
    I agree with you that this article is very interesting. Like you said before it reflect the Keynesian school of economics. However, there is one problem with these theory, you don´t know if the government intervention are helping the economy or not. It is impossible to state which theory is better or if the economy work better with government intervention or without them. To investigate which one is better you would need two identic economies (this is impossible) in recession and intervene in one economy and in the other don´t make any intervention and expect that the market forces will solve the problem. "This strategy is also supported by history, where the article gives examples of past U.S. presidents and government decisions during different times of the business cycle." However the business cycle doesn´t affect all the economies in the same ways. For example the Spanish government is making a lot intervention but the economy is not recovering. On the other hand the biggest problem with the government interventions is that you can´t be sure in 100% about the effect of the intervention. You can study a lot the economy and prepar the intervention for months but you will know the result after the intervention, and the result may not be positive. The other problem with the government interventions is that many of them are not popular and many governments won´t risk losing popularity.
  • Benjamin D on 08 Mar 13
     
    I agree with what Andrzej said about the fatc that we don't what are the best ways to help the economy, either making a goverment intervention or not. The problem is that none of this policies are 100% efficient and the example that Andrzej gives us about the Spanish government shows us how sometimes intervention doesnt recover the economy.
  • Benjamin D on 08 Mar 13
     
    I agree with what Andrzej said about the fact that we don't what are the best ways to help the economy, either making a goverment intervention or not. The problem is that none of this policies are 100% efficient and the example that Andrzej gives us about the Spanish government shows us how sometimes intervention doesnt recover the economy.
Jina K

Venezuelan Government to Control Rent Prices - 1 views

venezuelanalysis.com/7502

price controls rent government intervention

shared by Jina K on 26 Nov 12 - No Cached
  • Jina K on 26 Nov 12
     
    The Venezuelan Government has announced price controls on housing rents and with prices of medicines also underway. Many basic goods have already been under price controls as a result of inflation. The government has decided to put rent prices under control in order to protect consumers from high prices from landlords. Furthermore, with price controls on medicines, the government hopes to ensure that medicines will be accessible to all. Many producers have claimed that the price controls create a lack of supply. On the other hand, small and medium businesses seem to benefit from this through economies of scale. Lower prices allow producers to producer more for a cheaper price. However, government assured that the price control was throughly evaluated, so that it does not affect the supply. This relates directly to our topic of price control. In this case, government puts price controls in order to protect consumers from being exploited by producers. We can also notice that government intervention through price control does not always receive positive feedbacks from all parties.
Caitlyn S

Price Controls Cause Chaos in Ethiopian Markets - 0 views

www.voanews.com/...134022.html

price-controls ceiling-price government-intervention

shared by Caitlyn S on 23 Nov 12 - No Cached
  • Jean Eric on 23 Nov 12
     
    Price controls on many staple food items ordered by Ethiopia's government early this month have reduced grocery bills for many low-income families. But now shopkeepers are upset and some basic items are disappearing from store shelves. Economists are concerned about the long-term effect of the government's price-fixing strategy. The consumers responded by going to local retail shops on the first day of the new low prices to stock up on much needed basic good. how ever chaos has broken out between shop keepers and consumers as the shelves aare being cleaned of basic and even normal goods. The shopkeepers responded complaining that the weeks of low prices were unbaraible because of consumers being unhappy of even the lowest prices. The Ethiopian government defended it self that the price caps were needed to help the economic crises but 4 independant economist say that it would help the economy recover, but the government ignored them saying it would. Critcs warn that it will only help in the short term and only worsen the economy in the long term.
  • Caitlyn S on 25 Nov 12
     
    Price controls on many staple food items ordered by Ethiopia's government early this month have reduced grocery bills for many low-income families. However, shopkeepers are now upset and many basic items are disappearing from store shelves. Economists are concerned about the long-term effect of the government's price-fixing strategy as the price controls have triggered chaos and tension in the local marketplace. 'Ceiling price have been put on items such as meat, bread, rice, sugar, powdered milk and cooking oil due to merchants taking advantage of global price hikes. The consumers have greatly benefitted yet storekeepers are unhappy, some products they bought before the price controls must now be sold below cost. In a free market economy, the preferred way of doing this is to increase the supply and increase competition. The Ethiopian government has been heavily criticized. Despite the upheaval, government officials are hoping their experiment in price-fixing will help to curb inflation. Recently released figures show the inflation rate jumped from 10.2 percent in November to 14.5 percent last month.
Benjamin D

Dairy processors fight milk price controls with anti-government campaign - 1 views

dailycaller.com/...trols-anti-government-campaign

'Price controls' 'government intervention'

shared by Benjamin D on 25 Nov 12 - No Cached
  • Benjamin D on 25 Nov 12
     
    A trade group representing milk processors debuted an ad campaign Tuesday to eliminate New Deal-era federal price controls on unprocessed milk. The International Dairy Foods Association (IDFA) complains that the current price support system for dairy farmers dates back to 1937. Its ads call for "Big Government to get out of your milk." The main concern is that family with children are gradually paying more for milk hence the consumption of milk has dropped in the past years.
Jean Eric

What's wrong with the economy? Two clashing views - 0 views

articles.marketwatch.com/...monetary-policy-interest-rates

fiscal policy

shared by Jean Eric on 11 Apr 13 - No Cached
  • Jean Eric on 11 Apr 13
     
    What this article talks about is the two points of view, which are completely different in nature, to why the US economy is failing. The one point of view is that there is too little aggregate demand and an excesive supply of wasted potencial. The other view is that there is too much government intervention. It talks about how the recession has effected investments and aggregate demand and therefore decreased the average wages of the country. The article states that a solution to the problem would be the fiscal policy where the governmnet would lower percentage taxes in order for the rich to start investing again. This would then promote the recovery of the economy.
Caitlyn S

South Korea Growth Hits Three-Year Lows - 1 views

www.cnbc.com/...rea_Growth_Hits_ThreeYear_Lows

macroeconomic activity

shared by Caitlyn S on 12 Feb 13 - No Cached
  • Caitlyn S on 12 Feb 13
     
    This article explains how South Korea's export-driven economy picked up slightly in the final quarter of 2012 on private consumption, yet recovery will likely be delayed until global demand gathers momentum. Asia's fourth-largest economy increased by 0.4% from October-December which was better considering in September there was only a 0.1 % rise, the slowest growth in over three years. This was the seventh consecutive quarter with growth of less than 1%, the longest in more than four decades. South Korea's economy has been hit hard by the depressed global demand, as it had to rely on exports due to high consumer debt surpassing private consumption. The nation's economic growth rate has obviously been stunted with further government intervention needed.
Kyuhwan L

S Korean won tumbles after Seoul warns of intervention - 0 views

www.ft.com/...ac-11e3-86ef-00144feab7de.html

exchange rate currency won exports bonds current account surplus

shared by Kyuhwan L on 02 Nov 13 - No Cached
  • Kyuhwan L on 02 Nov 13
     
    Asian markets have been hit with news of a liquidity squeeze in China's markets, but the South Korean won has hit a two year high. The country's current account surplus and the popularity of its bonds is strengthening the currency. However, because Korea is a heavily dependent export country, the government is intervening to stymie the growth of the won. In fact, the central bank has bought 2 billion dollars worth of the won to reduce the growth.
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