Economic Growth Essay

781 words - 4 pages

In 2007-2009 the recession in the U.S economy was long and deep. At some point the economic activity was reasonable in 2008, but the economy overtaken by a financial problems that could improve the economic weaknesses. The economy was recovered in mid of 2009. GDP has been in a stable path since then, although the jump has been unequal and slowed down in 2011. The high rate of long term unemployment and the labor rate has decreased the labor market. In the paragraphs below, I’m going to define the fiscal policy and explain how it could resolve the economic paths in the short term long term.
Fiscal policy clarifies how the government could try to use fiscal policy to affect the economy, ...view middle of the document...

There is no necessary tradeoff between these two objectives. They can be mutually reinforcing; a credible commitment to dealing with the long-term debt problem relieves investor uncertainty and increases the near term reason to spend, while dealing with the short term problem of weak aggregate demand puts the economy on a stronger growth path, which increases tax revenue and affluences the long term debt problem. Once the short term problem of weak demand is solved and the economy has returned to a normal growth path, the appropriate policy response for an economy with a looming debt crisis is arguably fiscal consolidation cutting deficits. Such a policy is thought to have the benefits of low and stable interest rates, a less fragile financial system, improved investment prospects, and possibly faster long-term growth. To address the government’s long term fiscal problem, Congress passed on August 2, 2011, the Budget Control Act of 2011. The Budget Control Act (BCA) sets caps on discretionary spending. It also created the Congressional Joint Select Committee on Deficit Reduction, whose task was to propose further policy changes that would lead to $1.5 trillion in further deficit reduction over 10 years. The joint committee was unable to reach an agreement on how to achieve further deficit reduction. In the absence of an agreement, the BCA established a process for automatic spending...

Find Another Essay On Economic Growth

FDI and economic growth Essay

3860 words - 15 pages Foreign direct investment (FDI) and Economic growthTable of Contents:Chapter 1 1.1 Introduction 1.2 Literature reviewChapter 2 2.1 Research question 2.2 HypothesisChapter 3 3.1 Outline of data and variables to be studied 3.2 Data analysis 3.3 ConclusionReferences1.1 IntroductionOver the past two decades, many countries around the world have experienced substantial growth in their economies, with even faster growth in international transactions

Financial development & economic growth Essay

2451 words - 10 pages Introduction"The question of growth is nothing new but a new disguise for an age old issue, one which has always intrigued and preoccupied economics: the present verses the future" (James Tobin)A positive change in the level of production of goods and services by a country over a certain period of time. Nominal growth is defined as economic growth including inflation, while real growth is nominal growth minus inflation. Economic growth is

Economic growth pros/cons

565 words - 2 pages Increased government expenditure from income tax on investment in education/training of workers ( such as university) means the labour force overall has a better set of skills thus their productivity increases leading to a growth in real GDP and ultimately a rise in economic growth. Expansionary fiscal policy-Lowering income taxes means that consumers real incomes rise and so does their purchasing power. This leads to an increased AD

Economic Growth and Consumption

1785 words - 7 pages Question 2 Consumption and economic growth are the only two effective economic goals worth striving for in a modern globalized society. Do you agree? Consumption and economic growth are like In this essay it will be argued that the economic growth and consumption are unsustainable, environmentally detrimental and have a negative impact on human health and development and are not goals worth striving for in our modern globalized society. An

Austrialia´s Economic Growth

2240 words - 9 pages Economic Growth Economic growth involves an increase in the value of goods & services that an economy produces over a period of time caused by changes in the level of aggregate supply & demand, measured by the annual rate of change in real GDP. Since Australia’s 1991 recession characterised by negative -0.2% growth, continuous growth stabilised over the past two decades averaging 3.5% per annum but slowed to 3.1% during the 2000s. As the

Economic Growth and Development

1354 words - 5 pages 1)Distinguish between economic growth and economic development.Economic growth is a measure of a county’s productivity and the total combined income of that country. Economic development is a measure of how developed a country is i.e. people’s standard of living. For economic development to occur, economic growth also is needed but economic development is not needed for economic growth to occur.BasisEconomic DevelomentEconomic

Economic Growth: Sustainable Development

1525 words - 7 pages Introduction The concept of sustainable development was first introduced by IUCN world conservation strategy in 1980. Sustainable development is a technique of economic growth under which resources are used to meet not only the demand of present generation but also for generations to come. Marketing act as a business philosophy, and a collection of management techniques, orientated towards providing value to consumers, organisations and society

Promote Pro- poor Economic Growth

1023 words - 5 pages An on-going discussion that has drawn much attention since the adoption of the Millennium Development Goals (MDG) is the theme of poverty reduction. According to such a policy there is a growing need for developing countries to achieve a sustained rate of growth. However, since purely economic growth strategies may not necessarily elevate poverty and anti-poverty measures may not lead to an increase in growth, it has highlighted the need of an

Economic Growth and environmental problems

1035 words - 4 pages Economic Growth and environmental problemsThe industrial revolution, which began around 1750, ushered human beings into a new era of modern civilization. While the remarkable progress in science and technology has improved people's lives greatly, our earth is changing and the environment around us is becoming worse and worse. According to Booth (1991, p.552), the" long-run economic growth relies on the creation of new industries and new forms of

The Desirability of Economic Growth

935 words - 4 pages The Desirability of Economic Growth The Benefits of Economic Growth =============================== 1. Economic growth means that real GDP has increased and therefore leads to an improvement in the material standard of living. This means that individuals have higher levels of real purchasing power enabling them to buy a greater volume of goods and services - increasing economic welfare ( bearing in mind individuals have unlimited

Does trade couse economic growth?

1780 words - 8 pages The last few decades have been characterised by an unprecedented expansion of trade, which has come to great prominence on the global agenda as one of the most important drivers of economic growth. The effects of trade on economic performance have been the centre of political debates of both rich and developing economies. There are many advocates of trade as a proxy for growth on one side, and sceptics who doubt that trade promote long and

Similar Essays

Economic Growth And Economic Indicators Essay

852 words - 4 pages Economic growth is measured by the change in real GDP. Real GDP is the total value of all of the goods and services produced in a year, adjusted for inflation. GDP, though not the best indicator of the quality of life, nations with a high GDP correlate to nations with a higher quality of life. The changes in real GDP for 2013 general trend of increasing GDP and hence increasing economic growth. The latest estimate for fourth quarter fiscal year

Economic Exchange And Economic Growth Essay

1552 words - 7 pages Economic exchange is an important tool to enhance economic growth. However, contrary to the expectation, intensified economic exchange in America, as a result of free trade has negatively impacted on wage rates. Consequently, as free trade extends to non- American economies, converting the whole world to a global village, the impact on wages spreads out to other nation and with the current trend it will soon flatten wages across the globe at a

Economic Growth And Development Essay

820 words - 3 pages Economic growth is a necessary but not sufficient condition of economic development. There is no single definition that encompasses all the aspects of economic development. The most comprehensive definition perhaps of economic development is the one given by Todaro: ‘Development is not purely an economic phenomenon but rather a multi – dimensional process involving reorganization and re orientation of the entire economic and social

China Economic Growth Essay

972 words - 4 pages Economic growth means the increase in the real GDP over time. It can be caused by an increase in an aggregate demand or aggregate supply. However, long-term economic growth mainly results from an increase in aggregate supply for instance increased capital, etc. Growth accounting is the tool to estimate the contributions from various sources to economic growth. It is the growth of GDP explained by weighted growth rates of other variables. It