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Caitlyn S

Does the Oil Equilibrium Price Exist? - 0 views

ezinearticles.com/?Does-the-Oil-Equilibrium-Price-Exist?&id=1258239

supply demand equilibrium price mechanism

shared by Caitlyn S on 14 Oct 12 - No Cached
  • Caitlyn S on 14 Oct 12
     
    In this article it explains why we, the consumer, are unable to influence gas prices. The article suggests 3 main reasons: 1) for oil companies it is more profitable to set a higher price and then let the price adjust to the demand. Simply, instead of letting the price adjust upwards, the price is set a higher level to let it adjust downwards. 2)The increasing price over the past two years has not created a drop in demand. Rather, the increasing price is accompanied by increasing demand. 3)For countries, the increase of price and demand are signs of prosperity, so a positive thing. This is an example of where it is hard to achiever a price equilibrium.
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.
Caitlyn S

USA - 0 views

articles.washingtonpost.com/...y-global-economy-weak-recovery

fiscal-policy

shared by Caitlyn S on 18 Apr 13 - No Cached
  • Caitlyn S on 18 Apr 13
     
    The United States remains desperate for faster growth and stronger job creation as it continues its slow recovery from the 2009 recession. Peter Blair Henry, the dean of NYU's Leonard N. Stern School of Business states private investment is falling $1 trillion short per year due a to disputes over the "fiscal cliff," the federal borrowing limit and other issues." Monetary policy and fiscal policy are working at "cross purposes" - one is expanding while the other contracts." Governments should save money during times of economic prosperity and spend it to boost the economy when growth decreases. Lawmakers should prioritize predictability in policymaking to trigger private investment and government investments, particularly in education, should be off-limits to cuts. Henry points out that a solution to closing the wage gap is to produce more skilled workers. Raising taxes on the highest tax bracket may also be part of the solution to overall sustainability concerning the fiscal side, but not a solution for income inequality.
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