A dip back into macroeconomics…

I came across this cartoon today on the economist, and this made me wonder where we are globally towards a “recovery”. I read all the comments posted online on this cartoon, and there were some who agreed with the cartoon, saying the “recovery” is only an illusion, and not actually real. On the other hand some people interpretted this cartoon, saying that the catoon is blaming the worker for the crisis. I do not see it this way, and I merely think that the artist has put the jobless man on the airplane to remind us that many like him still does exist (because he is so large in comparison to the whole airplane), and that they are still experiencing problems and hardship. Therefore it is pointing to the distortion of people’s view of the ‘recovery’ that we are experiencing.

Recoveries should take into account all of the main macroeconomic goals:

• full employment
• stability
• economic growth

How else can this cartoon be interpreted, and what am I missing?

Add a comment November 2, 2009

Reflection up to this point

Like I said in one of my earlier blog I was scared that the technology aspect would get in my way of actually learning economics. Now that I am used to it and have adapted to it, I don’t think the technology is getting in the way of learning. However, I think that I have learned most from assesments such as DBQs, definition tests, and reading textbooks. Doing these things do not necessarily require computers. I think that the online textbook is a little hard to understand initially. Therefore I have made it a habit to read McGee first, and then use the online textbook for revision and studying. I do like the quizzes online though. It has helped me understand things a lot. I think from now, I will try to work hard on the data responses.

1 comment November 2, 2009

Arguments for and against protectionism

Arguments for Protectionism

To safeguard domestic employment

Although protectionism makes the economy more productive and efficient, protectionism does not take in consideration the quality of life. The lower the import is, the greater the aggregate demand, and so the higher the level of GDP and employment. AD = C + I + G + (X-M).

Arguments against Protectionism-

Besides the most obvious argument against protectionism, the inefficiency of resource allocations, there is another argument which shows how harmful protectionism can be.

Bureaucracy – many protectionist measures are very bureaucratic to enforce. Protectionism can lead to corruption as government officials fight for a chance to be a producer in a highly competitive market.

If quotas are imposed to limit the number of imports on goods, it increases the price, and produces a windfall gain for the foreign suppliers who can still supply their goods to the consumers in that country. Therefore the foreign suppliers want to be the ones who are able to supply to the country, as there is a lot of benefit. To become a foreign supplier, they may try to bribe the country, and so the government officials may become corrupt.

Add a comment November 2, 2009