Economic Journal Essay Example | Topics and Well Written Essays - 2000 words

Economic Journal - Essay ExampleA nonher effect is that consumers would tend to consume less today and wait until the prices still lower in the future. People pull up stakes think that if prices ar low to day, it will still decrease further in the future.Inflation is indeed harmful to the economy curiously when it is paired with unemployment. However, deflation can also be detrimental to the economy. Lower prices tend to make buyers postpone their shopping thinking that prices would still lower in the future. Although it may look that this is not a bad thing, it can affect the demand and supply of commodities in the economy. Since the consumers dont want to spend, commodities will be oversupplied and supply will swamp demand.According to Paul Krugman, deflation discourages borrowing and spending, the very things the depressed economy needs to get going. (What is deflation, what are the risks of deflation, and how can the Fed combat deflation)Since people do not want to spend the ir money, there is a tendency for firms to incur losses. This will in turn affect the employees of the company and there is a tendency for engage to drop and increase unemployment rate.Also, since deflation makes it difficult for firms to repay their debts, bankruptcy is most likely to occur and jobs will be lost. Yes, lower prices at first might seem to be pro-poor or more of an advantage to those who cannot afford some commodities. But in the long run, households and the people in the economy are still the ones who will suffer since they might lose their jobs and can add up to the problem of recession.Author Justin FoxTitle The Economy Really Is Fundamentally Strong snip TIMEPublication date October 16, 2008SummaryIt is known to everyone that America is experiencing problems with their economy. That is why when presidential candidate John McCain said that the fundamentals of the US economy are strong, many eyebrows were raised and his opponent Barack Obama didnt miss the opportun ity to mock his statement. McCains running mate Sarah Palin defended that McCain was talking about their workforce and the ingenuity of the American people. She was actually well(p) because the American workforce and their being skillful remain to be strong in the midst of economical meltdown.Many economists assert that it is productivity growth that signals the economic well-being of a country. Productivity growth refers to the economic output per hour worked. This productivity growth was actually the reason why America was able to prepare during the Industrial revolution despite the stagnation. What really caused the productivity growth during the industrial revolution is the dependence of the US in technology, electricity, combustion engine, and communication. In the mid-1990s, the engine was replaced with computers and the internet. later on that, productivity growth continued to fluctuate.High productivity growth does not guarantee a good economy but it makes it more possib le to suck up economic growth. With all these talks about productivity growth, maybe McCain was right that the fundamentals of the American economy are still strong.AnalysisThe workforce of a country is