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Homework Help: Solved 254302

Your assignment is to write two compact, carefully polished essays on current macroeconomic issues facing the U.S. economy. Each essay will receive an equal weight for your course grade. The topics of the two essays are to be chosen from the suggestions below. Note that you are not required to address all the issues listed under each topic and there are certain important things to explore that are not listed. 1. The slow recovery from the financial crisis What data support the case for slow recovery? Take a stand on whether “secular stagnation” is an appropriate description of the US economy in the years since 2008. Does the term apply in early 2021? What explains sluggish growth for so many years? How does this experience inform us about the relevance of different macroeconomic theories? What kind of policy responses does your analysis suggest? 2. Monetary policy What macroeconomic circumstances recommend an activist, expansionary monetary policy? How does the answer to this question depend on one’s theoretical perspective? Describe the channels through which monetary policy affects economic activity. Consider both conventional policy channels and the less common approaches pursued in the aftermath of the 2008-09 financial crisis. What limits the effectiveness of the monetary policy? What are the risks of implementing expansionary monetary policy?What does your analysis recommend about monetary policy in early 2018? 3. Fiscal policy Define supply-side and demand-side channels for fiscal policy. Link the channels to different macro theories. In what ways to the supply-side and demand-side effects reinforce or offset each other? What kind of evidence is relevant in assessing which channels are most effective? Discuss debates about how government spending and public deficits can crowd out private economic activity? Compare the demand-side effects of fiscal policy to monetary stimulus? When is one or the other the preferred approach to provide a macro stimulus? What is your assessment of fiscal policy in early 2018? Consider the effectiveness of the Trump / Republican tax cut bill passed in late 2017. Assess the effects of larger government deficits and rising federal debt. What do you think about the macro impact of a large government infrastructure program (a policy that seems to get some support from both sides of the political debate)? 4. The macroeconomics of international trade Summarize the microeconomic “comparative advantage” argument for free international trade. Analyze the claim that low-wage countries are “stealing” U.S. jobs? Consider various theoretical perspectives. Under what circumstances does the U.S. macro trade deficit reflect a weakness in the U.S. economy? Assess the case for protectionist policies. Consider alternative policies to address the challenges of economic dislocation and stagnation that seemed important to the surprising electoral victory of President Trump. Note that for every topic suggested above, you should base your analysis on the theoretical framework developed in the course. That is, you should explicitly ground your analysis in the classical model, the Keynesian model, or the neoclassical synthesis. It would be useful to justify your choice of model (or possibly a mixture of models) and explain how your choice of theoretical framework could lead to different conclusions compared to alternatives. You may use outside sources if you find them helpful. The target length of each essay is 1500-2000 words; use single space, Times New Roman 12-point font, and 1-inch margins. You should pay careful attention to your writing. The papers that you turn in should be the best prose you have ever written. You will need to write first drafts and revise them.

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