Macro Economic Policy

Economic Policy in Recent U.S. History In the highly materialistic world that we live in, conquest is generally careful in financial terms. The same is true in politics, where the success of a politician, especially the President, is measured by how intumesce the providence did during his term in office. It is specifically measured by how well they bring down unemployment, grow the economy and fight inflation. 2 basic modes of thought on the subject have pervaded mankind policy since World War II: supply-side and demand-side sparings. Demand-side economics is generally known as Keynesianism, named after the English economist butt Maynard Keynes. He believed that governments should force interest rates down by printing money and lending it from the central bank at a discount. This would put more(prenominal) money in consumers transfer and encourage them to lapse and consume more, thus creating an incentive for investment. This helped to top some of the lines, but in the long run it is highly inflationary, because with the increase of the money supply it becomes devalued. Keynesianism also calls for the government to spend more to try to help the economy grow. Keynesianism was a short solution to the problem and could only do so much for the economy before inflation caught up with it, and took it into recession.

On the different hand we have supply side economics, which works on more of a long-term basis. It basically attempts to stimulate economic growth, which would reduce inflation, and raise the standard of living. Supply side proponents allege that by reducing government regulations and taxation, this will stimulate more economic growth, and market equilibrium will be reached on its own, without government impositions. Keynesianism was popular until the late 1970s during a period of ?stagflation, where both unemployment and inflation were rising together. Policymakers realized that they could not solve this problem with Keynesian ways of thought. When... If you want to get a skilful essay, order it on our website: Ordercustompaper.com

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