Explain necessary steps for an effective fiscal policy

Assignment Help Macroeconomics
Reference no: EM13182596

Read the following quote from CHRISTINA ROMER, outgoing head of President Obama's Council of Economic Advisors. Based on this quote, explain her position on the necessary steps for an effective fiscal policy. Furthermore, analyze her perspective in terms of the way such policy could be successful. NEEDS TO BE A SHORT ESSAY

Stimulus Lost, "The Economist," September 1, 2010

CHRISTINA ROMER said the following:

The Administration understood that the recovery would be difficult precisely because many of the usual drivers of growth were missing. That is why we included $266 billion of additional temporary recovery measures in our 2011 budget. Congress has taken some important steps, including extending unemployment insurance, allocating funds to prevent teacher layoffs, and passing the HIRE tax credit to encourage firms to hire unemployed workers. However, it has enacted substantially less than what the Administration proposed. As a result, the economy has not had all the additional support that it needed.

While we would all love to find the inexpensive magic bullet to our economic troubles, the truth is, it almost surely doesn't exist. The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view, we should be moving forward on both fronts.

Reference no: EM13182596

Questions Cloud

What is the equilibrium price and quantity in widget market : The widget market is competitive and there are no transaction costs. Five different suppliers are willing to sell one widget at each of the following prices: $30, $29, $20, $16, and $12. Five different buyers are willing to buy one widget at each ..
Examine trends in criminal activity : Select a city, town, or municipality and examine trends in criminal activity over the last 3 years. Analyze reported crime statistics for major/minor offense categories such as murder, robbery, rape, and create a table of the results.
Corporate governance of company would be to the public : You have met with a potential client, who informs you that all the employees and officers of his company are bonded.
Which provides the best example of cognitive self-regulation : Which provides the best example of cognitive self-regulation?
Explain necessary steps for an effective fiscal policy : The Administration understood that the recovery would be difficult precisely because many of the usual drivers of growth were missing. That is why we included $266 billion of additional temporary recovery measures in our 2011 budget. Congr..
Reflects basic ability available only to formal operational : Which reflects a basic ability available only to a formal operational thinker?
Wise judgment scenario : Choose one of the following scenarios and discuss how each of the five components of wise judgments can be applied to the scenario you have chosen. Then, make a decision based on the five components.
Can a small group of well organized activists : Human rights groups, environmental activists, and other interest groups concerned with unethical business practices have often conducted publicity campaigns against various corporations that those groups feel have engaged in unethical practices.
What is the maximum value of the hhi : AT&T: 38.3% Verizon: 31.3% Sprint: 15.9% T-Mobile: 12.2% Other: 2.3% What is the maximum value of the HHI (a) Before the AT&T/T-Mobile deal? (b) If AT&T buys T-Mobile?

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd