Issue in Today’s Economy in Macroeconomics
Introduction
My research paper on current issues in the field of macroeconomics, I will be discussing issues that occur when our economy is functioning badly, about poverty and national income. Also how unemployment causes a shortage in the economy and some of the main causes of unemployment. Is there enough resources to satisfy everyone needs in the world today?
Thesis: Would we be able to correct natural phenomena’s like unemployment and rescissions without macroeconomics
History of Macroeconomics
Macroeconomics is used to study the economic cycle and modern money theory.
It focuses on the movement and trends in the economy as a whole. In the 1960s economists tried to explain the shifts of violence in economic activity. It begun with William Stanley Jeyons and Clement Juglar. After a lot of hard work in 1920 Wesley Mitchell achieved the development of the National Bureau of Economic Research foundation in the United States which was the main milestone that needed to be completed in order to help economist research better.
Economists were able to study all of their ideas that intended to explain the economic fluctuations growth and trade cycle. With much success studying economic patterns it led to researchers developing a economic pattern known as the Kuznets wave.
Issues in Macroeconomics
Some issues in macroeconomics are unemployment, inflation, trade cycle, economic growth, exchange rate and balance of payments. When society actual output or GNP is less than potential output this is an unemployment issue do to indolence of resources and man power. That is why some government policies main goal is to ensure full employment.
Inflation us an issue do to constantly rising prices of goods and services, agricultural and factors of production. The trade cycle issues refers to economic or business activities periodic fluctuations levels. Economic growth is based on the nation’s output over a long period. When it comes to poverty there are several issues and reasons. Some causes of poverty are overpopulated places, slow economic growth and development, deprivation of resources, rising unemployment and unethical abuse of power.
How Macroeconomic Help Solve Issues in the Economy
Macroeconomics helps determine employment based off of aggregate demand and supply, it helps to achieve economic growth, bring stability to price levels and suggest policy measures to control inflation and deflation. Economists uses Okun’s Law to determine how many people are actually unemployed and which group is suffering the most from unemployment. The consumer price index (CPI) is used to measure changes in the average price of consumer goods and services. CPI makes fruit price index much clearer which is the average price because, once we know the average price of consumer goods we can observe to see if inflation is occurring to calculate the inflation rate. Keynesians Theory on having the government to intervene to protect jobs and income when stuck a very low level of equilibrium output way below full employment GDP. When it comes to economic growth it is measured by the change in real output between two periods divided by total output in the base period, living standards is measured by dividing total output by total population using GDP Per Capita and productivity is measured by dividing total output by total employment using GDP Per Worker.
Conclusion
My conclusion is that without macroeconomics the economy and society would be completely unstable. And through macroeconomics the economy will continue to grow and overcome a lot of issues that we currently are going through in the economy today. Far as satisfying everyone’s desire economically, I believe it may happen over time but, right now the economy still have a long way to go.
References
- Bradley R. Schiller WITH KAREN GEBHARDT FOURTEEN EDITION The Economy Today. Chap. 6,7,8 and 17.
- https://en.wikipedia.org/wiki/History_of_macroeconomic_thoughtght
