Contemporary Economics Issue Commentary

The project requirements given for this assignment were as follows:

a commentary of 650 to 750 words each, based on published extracts from news media. The extracts may be from a newspaper, a journal or the World Wide Web, but must not be from television or radio broadcasts.

Each commentary must:

explain the linkages between the extract and an economic theory taken from the section of the syllabus on which the commentary is based
demonstrate economic insights into the implications of the extract (that is, it should provide evidence of the students ability to evaluate current events from the point of view of an economist).Add GRAPH to explain

The commentary must be on one of those: Section 3: Macroeconmics

3.1 Measuring national income

3.2 Introduction to development

3.3 Macroeconomic models

3.4 Demand-side and supply-side policies

3.5 Unemployment and inflation

3.6 Distribution of Income

About the Solutions
Going with topic 3.5 i.e. unemployment and inflation, the first three paragraphs of the commentary are reproduced below. Please purchase the full commentary if you wish to use any part of it so that the writer can get her due.

Commentary Economics: Unemployment and Inflation
Palley (1998) has written an interesting article which discusses the optimal rate of inflation for an economic system. While he concludes that a slightly positive rate of inflation is perhaps the best, he also notes that come what may, Zero is not the optimal rate of inflation. As discussed by Sinclair (2003) inflation is generally referred to as a rise in the cost of goods and services. However, in economic terms, there are several different ideas and concepts that have to be combined to understand inflation. Inflation as a concept includes things such as an increase in money supply to a change in the prices of a basket set of goods over a long period of time. In fact there are several tools by which inflation can be measured such as Consumer Price Index (CPI) or the GDP deflator.

As to the causes and factors which influence inflation levels, the interaction between the output in an economy as well as the monetary supply in an economic system influence inflation the most. Monetary supply can be controlled somewhat as per the interest rates that are created or adjusted by the government. In economic theory, monetarist economists believe that the supply of money is fundamentally important towards setting the rate of inflation while the Keynesian side suggests that the economic output of a system will set the rate of inflation (Sinclair, 2003).

However, regardless of how it is set, an optimal point of inflation has been a great concern for economists. The problem of defining what the ideal rate of inflation can be comes from the differences that are observed in economic theory and the real world. Certain theories point towards inflation which is negative to be the best but it there is data which shows those countries that have had negative inflation rates often suffered economic downturns. A positive inflationary rate could be the right answer but it is difficult to have complete control over positive inflation since economies have overheated and it is very easy for inflation to go out of control (Friedman, M. 1969). The third option, i.e. zero, is much loved by political figure since they can point to it as a sign of economic stability. Much as zero unemployment, zero inflation seems to be more of a political goal than something which is good for the economy (Palley, 1998).

Other Details about the Project/Assignment
Subjects: Economics
Topic: Commentary on an Contemporary Economics Issue
Level: College / University
Tags:

Contemporary Economics, Inflation, Unemployment

Price: $4.95

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Margaret O.
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Project Details

Subjects: Economics
Topic: Commentary on an Contemporary Economics Issue
Level: College / University
Tags:

Contemporary Economics, Inflation, Unemployment

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Contemporary Economics Issue Commentary

Contemporary Economics, Inflation, Unemployment

Contemporary Economics, Inflation, Unemployment