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Economics Essay Examples

Ace Your Essay With Our Economics Essay Examples

Published on: Jun 6, 2023

Last updated on: Jan 31, 2024

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What is an Economics Essay?

An economics essay is a written piece that explores economic theories, concepts, and their real-world applications. It involves analyzing economic issues, presenting arguments, and providing evidence to support ideas. 

The goal of an economics essay is to demonstrate an understanding of economic principles and the ability to critically evaluate economic topics.

Why Write an Economics Essay?

Writing an economics essay serves multiple purposes:

• Demonstrate Understanding: Showcasing your comprehension of economic concepts and their practical applications.
• Develop Critical Thinking: Cultivating analytical skills to evaluate economic issues from different perspectives.
• Apply Theory to Real-World Contexts: Bridging the gap between economic theory and real-life scenarios.
• Enhance Research and Analysis Skills: Improving abilities to gather and interpret economic data.
• Prepare for Academic and Professional Pursuits: Building a foundation for success in future economics-related endeavors.

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If you’re wondering, ‘how do I write an economics essay?’, consulting an example essay might be a good option for you. Here are some economics essay examples:

Short Essay About Economics

A Level Economics Essay Examples

Here is an essay on economics a level structure:

Band 6 Economics Essay Examples

Here are some downloadable economics essays:

Economics essay pdf

Economics essay introduction

Economics Extended Essay Examples

In an economics extended essay, students have the opportunity to delve into a specific economic topic of interest. They are required to conduct an in-depth analysis of this topic and compile a lengthy essay. 

Here are some potential economics extended essay question examples:

• How does foreign direct investment impact economic growth in developing countries?
• What are the factors influencing consumer behavior and their effects on market demand for sustainable products?
• To what extent does government intervention in the form of minimum wage policies affect employment levels and income inequality?
• What are the economic consequences of implementing a carbon tax to combat climate change?
• How does globalization influence income distribution and the wage gap in developed economies?

IB Economics Extended Essay Examples 

IB Economics Extended Essay Examples

Economics Extended Essay Topic Examples

Extended Essay Research Question Examples Economics

Tips for Writing an Economics Essay

Writing an economics essay requires specific expertise and skills. So, it's important to have some tips up your sleeve to make sure your essay is of high quality:

• Start with a Clear Thesis Statement: It defines your essay's focus and argument. This statement should be concise, to the point, and present the crux of your essay.
• Conduct Research and Gather Data: Collect facts and figures from reliable sources such as academic journals, government reports, and reputable news outlets. Use this data to support your arguments and analysis and compile a literature review.
• Use Economic Theories and Models: These help you to support your arguments and provide a framework for your analysis. Make sure to clearly explain these theories and models so that the reader can follow your reasoning.
• Analyze the Micro and Macro Aspects: Consider all angles of the topic. This means examining how the issue affects individuals, businesses, and the economy as a whole.
• Use Real-World Examples: Practical examples and case studies help to illustrate your points. This can make your arguments more relatable and understandable.
• Consider the Policy Implications: Take into account the impacts of your analysis. What are the potential solutions to the problem you're examining? How might different policies affect the outcomes you're discussing?
• Use Graphs and Charts: These help to illustrate your data and analysis. These visual aids can help make your arguments more compelling and easier to understand.
• Proofread and Edit: Make sure to proofread your essay carefully for grammar and spelling errors. In economics, precision and accuracy are essential, so errors can undermine the credibility of your analysis.

These tips can help make your essay writing journey a breeze. Tailor them to your topic to make sure you end with a well-researched and accurate economics essay.

To wrap it up , writing an economics essay requires a combination of solid research, analytical thinking, and effective communication. 

You can craft a compelling piece of work by taking our examples as a guide and following the tips.

However, if you are still questioning "how do I write an economics essay?", it's time to get professional help from the best essay writing service -  CollegeEssay.org.

Our economics essay writing service is always ready to help students like you. Our experienced economics essay writers are dedicated to delivering high-quality, custom-written essays that are 100% plagiarism free.

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Barbara is a highly educated and qualified author with a Ph.D. in public health from an Ivy League university. She has spent a significant amount of time working in the medical field, conducting a thorough study on a variety of health issues. Her work has been published in several major publications.

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The U.S. Economy, Essay Example

Pages: 2

Words: 549

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An online article by Lucia Mutikani on Reuters reported that Fed’s easy monetary policy has helped prevent the adverse economic impact that was expected from tighter fiscal policy. Some economists expected Q1 2013 economic growth to be slower due to potentially higher tax rates as well as government spending cuts but the predictions didn’t materialize. The U.S. economy has benefitted from the fact that the interest rates have been near zero since December 2008 and central bank has pumped $2.5 trillion into the economy to improve economic performance and employment rate (Mutikani, 2013).

The experience has shown that monetary policy has exerted greater influence on the economic performance than the fiscal policy. Some economists have admitted that they overestimated the impact of potential government spending cuts on business activities. The negative impact of tighter fiscal policy has also been lower because the U.S. economy is in a better condition than it was few years back (Mutikani, 2013).

Consumers have also been spending more because they have been able to cut down their debt burden and credit access from lending institutions has eased. The Fed data also showed that household debt in Q4 of 2012 grew at the fastest rate since early 2008. This is also a sign that the Fed’s monetary policy has been working since the public is more willing to accumulate debt and spend it (Mutikani, 2013).

This article addresses several topics discussed in chapter 13. One of the topics is taxation which the economists feared would negatively hurt economic growth if raised though their expectations didn’t fully materialize. The chapter also mentions that the individuals and the firms look at their income after-tax when making spending decisions. The chapter also mentions that a rise in government spending which is not accompanied by higher tax revenue, means the government has to borrow which also raises interest rate and discourage borrowing by firms. This may explain why according to the article, interest rates have remained lower. Since the government spending is expected to decline, the government may not need to borrow as much as it would have otherwise, and, thus, it has been relatively easier for the Fed to make sure interest rate remains low.

The chapter also explains that low interest rates mean businesses and individuals have more disposable income and this is exactly what we have learnt in the article that low interest rates and ease of obtaining credit has encouraged businesses and the general public to borrow more. This also helps us understand the rationale behind Fed’s decision to keep interest rates low so that the U.S. economy is able to quickly recover from recession.

The article mentions that economists feared government spending cuts would negatively harm economic growth and their fears were legitimate. As the chapter mentions, government spending during abnormal times helps stimulate economic growth by providing income to the public which is then used on consumption activities. The U.S. Government used this formula during the Great Depression as well. The chapter mentions that fiscal policy can be quite helpful during severe downturn and I remember reading in the news that the U.S. financial crisis would have been much severe were it not for the actions of the U.S. Government.

Mutikani, L. (2013, March 22). Easy Fed softens fiscal policy punch on economy . Retrieved August 25, 2013, from http://www.reuters.com/article/2013/03/22/us-usa-economy-growth-idUSBRE92L03O20130322

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Essay Sample on The United States Economy

An economic indicator is a part of the economic data, mainly involving macroeconomics because it is used by analysts to create an understanding of current or future investment possibilities. These indicators also help to judge the economy as a whole. The United States economy can be best described as “exhibiting characteristics of both capitalism and socialism. Such a mixed economy embraces economic freedom when it comes to capital use, but it also allows for government intervention for the public good” (Sean Ross).

The business cycle’s four stages are peak, recession, trough, and expansion. Peak is a maximum where the economy is at or near full employment but not permanent. Recession is defined as a period of decline in output, income, and employment. There is a widespread contraction of the economy. Real GDP decreases, while unemployment increases. Trough is where output and employment are at their lowest levels. Expansion is a period where real GDP, income, and employment rise as the economy approaches full employment. “The economy would grow 4.5 percent in 2022, downshifting from an expected 5.7 percent expansion in 2021. Its forecast for the United States shows an even steeper slowdown, from 6 percent growth this year to 3.9 percent next” (Neil Irwin). I think the economy has already been moving towards a new phase as everyone is trying to push past the setback from the pandemic. Although I do believe it will take past the new year before we start seeing major change. Once the world realizes that coronavirus will never go away and that the vaccine is the best way to protect yourself like the flu, then the economy can grow again. 

GDP means Gross Domestic Product, it is the measurement that seeks to capture a country's economic output. “Current‑dollar GDP increased 13.0 percent at an annual rate, or $684.4 billion, in the second quarter to a level of $22.72 trillion. In the first quarter, current-dollar GDP increased 10.9 percent, or $560.6 billion” (BEA). The growth rate comes from the annual rate of change. The growth rate measures an economic recession or expansion. 

Inflation is measured by the customer price index, which measures price changes by consumers, who represent almost all of the U.S. population. The Consumer Price Index increased 6.7% over the past few months. Last month the CPI increased to 0.8% because of the season change. The index for all decreased food and increased energy by 0.5% last month. Overall 4.9% in the year combined. 

Unemployment is measured by dividing the unemployed people by the number of people working. It is usually measured by using the United States Census. Why is unemployment not a perfect measure of joblessness? After researching I have found that the reason it is not perfect is that they don’t count anyone who is working or anyone not looking to work. It does seem hard to get an accurate number because there are so many different reasons people do not work or work, it becomes hard to categorize the reason. Adding a new reason this past year with coronavirus, leaving many people without work. The current unemployment rate is 4.2% in the US, which is 6.9 million people not working. I think the stimulus checks have given people a reason to postpone going back to work. Also, companies are having a hard time getting workers. Companies are offering bonuses and other perks to get new workers. It is crazy that companies have to entice workers, because it should be workers trying to impress companies to hire them, not the other way around. I also think that the average employment age has increased because I am 19 years old and I just got my first job this year. 

Monetary Policy is the amount of money available in an economy. “By managing the money supply, a central bank aims to influence macroeconomic factors including inflation, the rate of consumption, economic growth, and overall liquidity” (The Investopedia Team). After researching monetary policy I found that The Fed is who conducts the monetary policy in the United States. Congress gave the Fed two goals. First is to maximize employment. Second, to keep stable prices which equals a stable inflation. They can increase or decrease the interest rats by setting upper and lower limits. Also they can change short-term rates on consumer loans and credit cards. When researching I came across this article that said “The Federal Reserve on Wednesday announced that it is accelerating its removal of monetary support for the economy, citing a rise in inflation that has seen the biggest jump in prices in nearly 40 years. In a move to cool growth, policy makers also said they expect to hike interest rates three times in 2022” (Irina Ivanova). 

Fiscal Policy in economics the fiscal policy is the use of government revenue collection and expenditure to influence a country's economy. Is the President and Congress currently running expansionary fiscal policy or contractionary fiscal policy? THe U.S. fiscal policy has been expansionary since 2009. The main cause was because of the huge recession that took place from late 2007 till 2009. It has not changed since then. After looking through the Congressional Budget Office article I found it evaluates two and five year markers for economic forecasting, starting in 1976. “The largest errors stem mainly from turning points in the business cycle, changes in labor productivity trends and crude oil prices, the persistent decline in interest rates, the decline in labor income as a share of gross domestic product, and data revisions” (CBO). It is very interesting that they forecast every two and five years because I feel like not much changes in two or five years. I feel like ten year forecasting would be more useful, but two and five years keep us in the loop, so we do not miss something important. 

International  Trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. The U.S. trade with Brazil, Norway, South Korea, Australia, and Canada is who we trade with this year. Some of those countries were a shock to me and honestly I expected China but I guess we do not trade with them as much as we just buy almost everything from them. Yes, I think that free trade should be encouraged because it would allow us to buy more for better quality and for not as much. That will lead to more innovation and push economic growth. I think there are a lot of positives with free trade. The only thing that would change my mind would be after doing research on the pros and cons of free trade. I came across an issue and that being it does not protect the environment. Protecting the environment is very important for me. I need to move to the top of the government's to-do list. Learning that I will change my mind and see until there is a way to protect the environment and maintain free trade, I do not think it should be encouraged. 

In conclusion, a lot goes into a working economy, especially the U.S. economy. Going into this project when I was reading the directions I thought, how can I write a five page essay on the economy? But once I began researching and answering the questions, my mind changed and I have gained so much knowledge. I know I have something to talk about at the dinner table. The United States economy can be described as “a free-market, private enterprise system that has only limited government intervention in areas such as health care, transportation, and retirement. American companies are among the most productive and competitive in the world. Unlike their Japanese or Western European counterparts, American corporations have considerable freedom of operation and little government control over issues of product development, plant openings or closures, and employment” (Nations Encyclopedia). Know that is a pretty impressive title for the United States. I now have a greater understanding behind the scenes of what makes the world run. This has definitely been one of the most educational and important papers I have ever written and researched. “So the American economy needs the world, and the world needs the American economy” (Rodrigo Rato).

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United States Economy Essay Sample

Type of paper: Essay

Topic: City , Development , Urbanization , Town , United States , Wealth , Economics , Workplace

Words: 1925

Published: 2020/11/09

The United State’s economic growth period is referred to as the gilded age and it is during this period the United States jumped to lead in industrialization. The nation was then rapidly expanding and its economy was moving to new areas like into the industry of factories, coal mining and railroads. This period ranged from 1870’s to 1990’s and larger markets grew, commercial farming increased, ranching and mining stabilized and further a national market place was established. “Steel production in America is mentioned to have risen to surpass that of Britain” (Tindall and David, 67). Mechanization of industries also increased and this marked the gilded age’s search that would provide cheaper ways to creation of more products. This paper aims at describing economic changes that took place in the US around 1870’s and how these changes differ from the ones that took place in 1900’s. The paper will further indicate consequences and reactions to the changes of industrial work, law, urban development, agriculture and foreign relation. During the 1870’s and 1880’s, economy of the United States had the fastest rate of rise ever in history. Wealth, wages, growth domestic product and formation of capital rose in a steady manner. Wages, distribution of wealth, human costs, labor unions, rural to urban migration, industries and technology increased beyond 1880’s and in the 1900’s the state was close to perfection. Wages that were paid to workers and employees increased more during the 1900’s as compared to the 1870’s, wealth became more distributed and most people could access wealth with poverty reduced and human costs rose with more salaries that would be paid to workers (Brynjolfsson and Kahin,142). Labor unions arose and grew to fight for workers, industrialization increased with most people moving from the rural to urban areas in search of better lives and employment and technology started becoming familiar. More industries came up, expanded and were able to accommodate more workers, products and services. For purposes of transportation, the railways if measured tripled around 1870’s to 1880’smore than before but later in the 1900’s it doubled making it improve more. The railways improvements gave rise to increase in commercial farming, mining, ranching and creation of market places. Development of the rail system in the United States during the periods of development has had positive reactions on the urban development, agriculture and industrial work domains. Railways began to be built in the south although it only concentrated on short lines that would link regions of growing cotton to river ports and oceans. The reactions given to the railway building increased the railway networks and later the rails were also linked to the sides of the cities (Spulber, 54). Faster developing financial systems followed and railways later attracted the subsidies of the local governments of the United States. Freight rail road came up and played important roles in the economy of the United States. They got the use of moving imports and exports by use of containers and both coal and oil were being shipped form areas of production to areas of consumption. More freight locomotives arose together with those of passengers. These railways further led to rapid industrial growth and several far5ms got ready for mechanization. Cost of food lowered, national sales in the market increased, and engineering culture started to excel and modern management systems arose. During the nineteenth century, the railway system of transportation impacted the United States economy on bases of industrial work, urban development and agriculture. Development of United States changed over time and developed more as the railway system also developed. Railways became the common mode of movement and connected one business to other. Markets could have sufficient goods to provide to clients and customers and this ensured a good flow of money in the market further increasing stability of the economy. These rails needed maintenance and at times could cost United States a lot of money for repairs and updating and this derailed the economy (Spulber, 89). So far the maintenance and damages of rails was the mentioned negative part of it in all dimensions. People were employed to operate and manage these rails creating a good form of employment. The railway system thus had its changes making positive results to the urban development, industrial work and agriculture domains. Wages for workers was less and many people were put to slavery, especially people from the African countries. Workers had no voice in what they were paid yet they worked tirelessly to make ends meet. In the period of 1880s, 1890s and 1900s, this changed and however little the changes could be noticed. People who worked on farms, urban areas and in slums all had some voice that could cater for their needs. Wages increased and workers could be paid depending with how they worked and their posts. Labor unions arose in the United States, making workers to know their rights and amount of wages that they should earn (Gallman and Wallis, 81). In the industrial work, urban development and agriculture, increased and meaningful wages had implications of bringing improvements. People’s lives improved since they were in a position to meet more needs. Besides, poverty and low living standards decreased, leading to further revolution in the industries and farms. Wages also increased transportation because the available salaries could now make the worker to afford transportation easily. Increased wages on the other hand also negatively affected the industrial work, urban development and agriculture domains. By making workers earn more the available budgets became interrupted and derailed further development. Industrial work and urban development was most affected since most of their funds were used to pay workers. Labor unions that acted as openers also ensured the officials were paid and employed properly with some benefits that any employee could have. Reactions even wanted more wages to be paid to workers and the race to industrialization became stiffer and tougher. Workers underwent encouragement to work even harder and technological developments accompanied the system. Output of textiles increased, efficiency of steam power increased and iron making lowered the cost of fuel (Westlund, 17). With both positive and negative effects on the domains that are important, increase of wages still deserves fluctuations and not only in the United States but worldwide. Inequality trends in the United States began revolving around the eighteenth and nineteenth centuries. Long term trends in inequality were now being erased several economic disparities was reducing. “Wealth distribution as a disparity in the United States started improving even the narrow groups were beginning to hold posts in the big issues of stabilizing wealth distribution”. In the industrial work and urban development domain, wealth distribution issue was most important and reactions to these gave more positive implications. “The top earners had national incomes in huge amounts and balancing wealth distribution was like a hyperbole when it was mentioned” (David and Tindall, 85). Later, wealth distribution could be seen to improve and even the poor people could acquire wealth however little it was. Economic elites came up and great wealth could be inherited and most of this wealth gets to be permanent. The state of affairs started to prove the middle class to also flourish in the wealth generation bracket. With time, even the low class belonged in the bracket of wealth creation and distribution of wealth became uniform. Wealth distribution is a remarkable claim because it is not easy to make different classes have the same rights. On the bases of urban development, most wealth is made in the urban and United States ensured that wealth was distributed in the urban equally. “Industrial works ensured industries also raised wealth and all classes of people were allowed to participate” (David and Tindall, 27). Agriculturally, productions were made also by both workers and employees. Just as making wealth was made free to everyone, ownership was also free and successfully even the poor came to own something. Wealth distribution came to melt grand historical sweeps that had existed over a long period of time. Survey of distribution of wealth thus is important in all aspects and should be done frequently in order to maintain the wealth distribution system. Development of industries marked the industrial revolution and was a major change during early 1800s. Later in the 1870s, 1880s1890s and 1900 there was further remarkable improvement in the revolution. Reaction to industrial revolution enabled a positive gain in the interests of making more industries and since then several industries have come to exist. Hand production to machine production now came up and technology also improved. Industries came to exist and were vital in the domain of industrial work and urban development (Durkin, 58). Several industries developed in the urban areas, making people move from rural to urban areas with an aim of employment and better lives. Glass making came up, paper machines increased, whereas agricultural productivity made workers free to work in other and all sectors of the economic system. More efficient developments in the industries of developing countries included water wheels for most industries. Experiments got to be conducted by a known British engineer and the machine industry gained fame with more discoveries that are concrete coming up (`Durkin, 51). Machines like vehicles and trains got enough use in the industries with more specification put on production and movement. The industrial work, urban development and agricultural issues, then improved with reactions to increase industrialization. Rural to urban migration in the United States was due to industrialization and this increased urbanization. Basing interest in the domains of industrial work, urban development and agriculture the migration seemed to seek better economic opportunities. Immigration in the 1870s increased effectively to the period of 1900s with more industries increasing. Population in such areas increased and major cities in the United States got to develop. Patterns of settlement developed and racial exclusion began to rise with several races moving from one place to another (Oyemelukwe, 111). Furthermore, populations made the availability of industries to decline and intensity of unemployment began to be felt. A reaction to the inadequate jobs made people to later venture into businesses and industries that would serve the nation. The changes were seen to be positive because one problem would come with a solution and the trend was maintained with less problems remaining unsolved. Several people from different backgrounds also gave a reason for the diversity of ideas and that is why rural to urban migration was seen to be helpful. “There came up an increased demand for cheap housing by the migrants in the United States and this made several homes to be built poorly and this made personal hygiene a lack” (Tindall and David, 49). It is documented that rural to urban migration ensured lack of basic amenities and this led to the spread of bacteria all over with diseases killing many people. So far, the mentioned negative effects of rural to urban migration are least, though crime and poverty have also come up with the migration. Despite the negative challenges of rural to urban migration, the migration has had more positive effects on the industries, agriculture and the growth of urban centers. Unlike the seventeenth and eighteenth centuries, the nineteenth century had more massive populations moving to the urban and defining economic statuses of nations in the United States. Population increased day in day out as an effect of the economic growth in the charter of the United States. United States became a land of opportunity and easily found work came by just as the harder to find jobs came. All depended on the aggressiveness of the job seeker and how these employees were qualified even though education was still not efficient by then. People even from other continents like Europe and Asia had a taste of the United States and to date some still exist in the urban centers (Gallman and Wallis, 162). The rural to urban migration had thus enhanced more reactions to improving industries, urban development and agricultural dimensions. In concluding, an improvement in the growth domestic product of the United States was also an experienced during the economic growth times. The entire economic growth is a process of tiresomeness and would collapse if not all the required factors are put in place (Lussier, 71). As mentioned before, the development of transport, especially in the railway sector came up and was known as great development of transport. Increased wages, stable wealth distribution systems, formation and stabilizing of labor unions, increased industrialization, technological advancements, growth of GDP and rural to urban migration were also changes during the economic growth period. All the mentioned changes both positively and negatively affected the industrial work, urban development and agricultural domains with positive effects being of great concern. Most of the reactions to the changes ensured better growth with positive outcomes.

Works Cited

`Durkin, Thomas A. Consumer Credit and the American Economy. S.l.: Oxford University Press, 2004. Print. Brynjolfsson, Erik, and Brian Kahin. Understanding the Digital Economy: Data, Tools, and Research. Cambridge, Mass: MIT Press, 2002. Print. Gallman, Robert E, and John J. Wallis. American Economic Growth and Standards of Living Before the Civil War. Chicago: University of Chicago Press, 1992. Internet resource. George Tindall and David Shi. -A narrative history 8th edition: America’’s economic development, United Sstates,2010 print Lussier, Robert N. Management Fundamentals: Concepts, Applications, Skill Development. Mason, Ohio: South-Western, 2012. Print. Onyemelukwe, C C. The Science of Economic Development: The Theory of Factor Proportions. Armonk, N.Y: M.E. Sharpe, 2005. Print. Spulber, Nicolas. The American Economy: The Struggle for Supremacy in the 21st Century. Cambridge [England: Cambridge University Press, 1997. Print. Westlund, Hans. Social Capital in the Knowledge Economy: Theory and Empirics. Berlin: Springer, 2006. Internet resource.

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Economics - Essay Examples And Topic Ideas For Free

Economics is the social science that studies the production, distribution, and consumption of goods and services. An essay could explore economic theories, discuss contemporary economic challenges like inflation or unemployment, or analyze the impact of economic policies on societal wellbeing and global interactions. We have collected a large number of free essay examples about Economics you can find at PapersOwl Website. You can use our samples for inspiration to write your own essay, research paper, or just to explore a new topic for yourself.

Apple in Microeconomics

As inter-specific competition increases between companies, especially in the same product line, there is need to come up with better and innovative ways to market their brand. These product enhancement techniques need to meet the current consumer demands and tastes and preferences. However, there are other factors like quality, quantity, and price that also affect how consumers view an individual product and its purchasing power. Proper market intelligence is very crucial to an enterprise especially in the early development stages […]

Economics of Globalization

Tata Motors Limited located in India and in different countries all over the world. where economic growth has started for decades. Still, there are some challenges that can affect the growth rate in all respect. Like GDP; growth; business cycle; inflation; unemployment; political stability; trade balance. Real GDP or Gross Domestic Product (GDP) at constant (2011-12) prices in the year 2016-17 is likely to attain a level of 121.65 lakh crore INR, with a growth rate of 7.1 percent over […]

Unemployment as a Social Issue

Introduction. Unemployment is real issue in the modern society and has devastating impact on people's lives. The effects are not limited to the unemployed individual but also family members and the wider community. As unemployment is time bound, with the duration of unemployment have far reaching effects even affecting the living standards in retirement 2. The loss of an income by a parent can potentially damage the prospects of the next generation. In additional to the personal impact, unemployment is […]

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Unemployment Within the Economics

Most of the socio-economic studies indicated that unemployment within the economics of crime studies is positively related to crime. Committing crime without failing while unemployed has a higher reward (Burdett et al, 2004). Unemployment shows lack of opportunity for participation in the labour market and the acquisition of legitimate earnings (Freeman, 1999). The exclusion from legitimate income opportunities raises the expected returns from crime, the economics of crime theories have confirmed. Although, most of the empirical studies show a positive […]

Fact Vs. Opinion: the Positive-Normative Divide in Economics

Ever been in a debate where someone drops a stat, and someone else counters with what should be done? Welcome to the world of economics, where this kind of back-and-forth isn't just common; it's the crux of understanding two key concepts: positive and normative economics. Picture them as two sides of a coin – one’s about hard facts, and the other’s about what we feel ought to be the case. First up, positive economics. This is the nitty-gritty, the down-to-earth […]

How Competitive Forces Shape Strategy

Introduction Porter How Competitive Forces Shape Strategy was introduced in the year 1979. In this article, Porter talks about five forces that affect the performance of a company in the market. These forces include firstly the threat of entrance which talks about how new industries try to enter the market. Porter continues by arguing that strategy can be perceived as creating defenses in opposition to competitive forces or even finding a spot in an industry where there is a weaker […]

Economics Symbolism: a Harmonious Ballet of Services in the Economic Arena

In the intricate tapestry of economic choreography, services emerge as the unsung maestros, conducting nations forward and acting as the stealthy architects of prosperity. This essay delves into the pivotal role played by service industries in fostering economic growth, spotlighting their significance as the unseen engines of innovation, employment, and overall economic vitality. At the core of a flourishing economy lies the dynamic realm of services. While the limelight often gravitates towards manufacturing and agriculture, services discreetly hold a central […]

Zimbabwe’s Economics Turmoil: Navigating the Perils of Hyperinflation

Zimbabwe's history is marked by economic upheavals, with one of the most striking chapters being the era of hyperinflation, a period that shook the nation to its core and left an indelible mark on its economic landscape. In the early 2000s, Zimbabwe experienced a cataclysmic economic downturn characterized by hyperinflation—a staggering surge in prices that eroded the value of the country's currency at an exponential rate. The hyperinflationary spiral was catalyzed by a complex interplay of factors, including fiscal mismanagement, […]

What are Private Property Rights?

Property and prosperity rights are inseparably linked. The significance of having strongly protected and clearly defined property rights is currently widely recognized among policymakers and economists. A private property right provides people the exclusive right to utilize their resources as they see appropriate (Calandrillo, et al., 2015). That power over what belongs to them leads property users to be responsible of all the costs and benefits of employing those assets in a certain way. The process of weighing between benefits […]

Deciphering the Circular Flow Model in Economics

In the discipline of economics, the Circular Flow Model is a cornerstone that offers a basic comprehension of the inner workings of the economy. This model illustrates the movement of commodities, services, and monetary transactions while simplifying the many relationships inside an economy into a system that is simple to comprehend. The goal of the article is to explore the complexities of this model by looking at its composition, the functions of its main actors, and its wider applications in […]

Youth Unemployment

Exploring factors hindering the implementation of youth development package in addressing youth unemployment:) CHAPTER ONE 1. Introduction 1.1. Background of the study The reason for investing in young people is clear. Today, 1.2 billion adolescents stand at the challenging crossroads between childhood and the adult world (UNICEF, 2011). Youths represent 25 per cent of the working age population and account for 47 per cent (88 million) of the world’s unemployed people. An estimated 515 million young people, nearly 45 per […]

Unemployment Analysis

The U.S. Government considers a person unemployed if they are at least 16 years of age, willing and able to work, and who are actively seeking employment, but have not found a job. To be considered unemployed, someone does not have to lose a job. The unemployment rate also includes people who are returning to work, for instance, a stay at home parent returning to work. A person entering the job market for the first time, like a recently graduated […]

What are Taxes?

What are taxes, and why do people have to pay? Taxes are financial charges from our government in order to pay for our public needs, and in 2016 the government collected 3.9 trillion dollars in taxes to spend. There are many different types of taxes like income tax, federal income tax, sales tax, property tax, estate tax, and more. Twenty percent of households pay around seventy percent, and the top one percent has to pay a quarter of taxes. The […]

View of Students about Unemployment

This study considers the effectiveness of public and private sector SME-development programs and the current development of SMEs in AJK. The study presents several major findings and includes a brief review of international literature. To examine the status of small and medium-sized enterprises and their developmental strategies, a questionnaire survey was conducted among owners and top managers. A Chi-square test was used to analyze the information. The results reveal that SMEs face numerous challenges, including burdensome business rules and regulations, […]

How does the Unemployment Rate Effect the Economy?

The rate of unemployment is more than a percentage of unemployed people, it is used as key a macroeconomic indicator when determining the health of an economy. The unemployment rate is found by taking the labor force and dividing it by the number of people who are currently searching for a job, also know as the number of unemployed people. The unemployment rate is composed from three types of unemployment: frictional, cyclical, and structural. This could create a potentially serious […]

Rule of Law and Political Stability in Nigeria’s Governance and Economic Policy

Institutional qualities are the major determinant of good governance within every aspiring country. Factors such as voice and accountability, regulatory control, control of corruption, government effectiveness, rule of law, and political stability come into play. This study will focus on the rule of law and political stability as proxies for good governance. Good governance of a nation pertains to the management of the public sectors of the economy in terms of accountability, efficiency, and effectiveness, along with the free flow […]

Unemployment in the Country

An adage says "an idle hand is a devil's workshop". The enormous growth of unemployment in our society today calls for alarm, and it is expedient for all nations to figure out what leads to this great dilemma. Unemployment has messed up our society because of three major factors, such as increase in population, lack of encouragement for self-employment, and change in technology. One of the major causes of unemployment is increase in population. Increase in population is an event […]

Income Inequality and Economic Growth in Pakistan

In time series data, which indicates that increasing income inequality is likely to spur higher levels of GDP, certain examples become apparent. For instance, Shahbaz (2010) employed a time series data on Pakistan for the period 1971-2005, using the ARDL bound test approach, to determine the relationship between income inequality and economic growth in Pakistan. The results show that income inequality is positively and significantly related in both long-run and short-run with economic growth in Pakistan. Gelan and Price (2003) […]

Main Issues of American Taxes

Taxes are something every American has to do in their life. It's a responsibility that every American file their taxes. A lot may not agree with the idea of taxes up, so they don't pay them. Should I pay them? Is a popular tax question and, should taxes be the same for everyone? My goal in this paper is to see both sides of the two questions and figure the reason behind them and get a further understanding of taxes. […]

Examining GDP and Unemployment

Research over the years has shown that unemployment rates and Gross Domestic Product (GDP) figures go hand in hand. This paper aims to define and discuss GDP, and its relation to economic growth. Additionally, the paper will discuss how the use of fiscal or monetary policies can effectively battle recession and aid in the growth of the economy, and how losing a battle to a recession can severely impact unemployment and the unemployment rate, along with other factors leading to […]

Unemployment in the U.S

As indicated by the Bureau of Labor Statistics, the rate of unemployment in the United States has increased at an alarming rate. Approximately six million people in the United States are unemployed, according to deptofnumber.com. This has negatively affected the nation's economy. The statistics reveal the unemployment rates for various groups of people in the country. The rate of unemployment among men was at 7.0 percent, and approximately 6.4 percent among women. The increase in the rate of employment among […]

The Problems on Income Inequality

In this part, we continue to briefly summarize our empirical analyses based on the ARDL model techniques adopted. The findings of this study are summarized below. Firstly, the objectives of the study were analyzed using cointegration analysis tests and the ARDL bound test on the national level data, covering the period of 2004-2016. The first step taken in the cointegration test involved carrying out a unit root test for each variable and determining their order of integration. The results indicated […]

GDP and Unemployment

The gross domestic product (GDP) is the measure of goods and services produced in a country during a year (Boone 2016). When GDP is increasing, the economy is in expansion mode. When GDP is decreasing, the economy is in a recession. Economic growth occurs when the GDP increases over time. When economists use the term "economic growth," they are normally referring to sustained increases that occur over a substantial time period, rather than the quarterly changes often discussed in the […]

Unemployment in Society

When workers become involuntarily unemployed, there are several costs associated which they will unquestionably have to bear. These could come from the fact that there are certain firm-specific skills that an individual has, thus leading to scarce opportunities for individuals searching for jobs matching their specific skills (Lazear, 2003). Moreover, the costs could be associated with the model proposed by Harris and Holmstrom (1982), in which they stated that the workers have to be assumed to be risk averse and […]

An Issue of Tobacco Taxes

Tobacco tax increases could drive youth smoking into near-nonexistence if done correctly. Sin taxes are a series of taxes aimed at products deemed not beneficial or otherwise destructive ("Sin Taxes" par. 1). Taxes aimed at tobacco products, sometimes referred to as tobacco taxes, create numerous benefits for the country. Money generated by tobacco taxes is produced at the local, state, and federal levels (par. 2). Tobacco taxes create incentives to quit usage because of health benefits deriving from it (Campaign […]

Long-term Unemployment

Long-term unemployment is when workers are jobless for the time set by the federal government which may enable some to receive unemployment benefits. In order to receive unemployment benefits by the Bureau of Statistics, they must actively seek employment for at least 4 weeks prior to receiving unemployment benefits. Many unemployed people become disheartened about the possibility of receiving unemployment benefits that they just lose hope. Everyone may not be recognized in this area to show the true numbers of […]

Unemployment in Zimbabwe

Unemployment rate is equivalent to the economically active group of people that is unemployed and more so looking for jobs. During the precolonial era, Zimbabwe had one of the strongest economies in Africa and at one point dubbed the "Bread basket of Africa". The British colonized Zimbabwe and therefore in the process; managed to bring investors into the country that was rich in minerals such as gold, platinum and silver. Health sectors, education and agriculture were by far the best […]

Workforce Performance

Background The work will cover the company MyEmploysure. Its main aim is to help Australian businesses establish the workplace structures that will be compliant to the needs of the employees. Furthermore, it helps other businesses grow in what they do by managing their human resources. The service provided involves getting to know all of the legislation that has become available in the country and provide the best service in terms of differing needs of the employees. The main aim of […]

Discussion of Government and Unemployment Insurance

Discussion 1 a). Medicare is a program by the federal government in US, which offers health cover to its citizens. The package is extended to cover old people who have 65 years and above as well as young individuals who have disabilities. The health cover plays a major role in providing financial plus health security paying many medical health services to persons it covers (Edwards, 2014). Major characteristics of this program include; many people using the program have medical problems […]

Production Planning Processes

Founded in 1944, Burgmaster took a stable market position in the machine tool industry. Its stability was propagated by its turret-head drill, which was based by Fredrick Burg. Its capacity and ability to reduce production costs made the Burgmaster drill a favorite tool in the then budding aerospace industry. With the early market, dominance came bigger plans. The Burg family publicized the company in 1961 by issuing stock on over-the-counter market (Misa & Thomas 174). Five years down the line, […]

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How to Write Essay About Economics

Economics and finance are closely related fields of study within the STEM subjects in college, often presenting a significant challenge to many students due to their complex theories and intricate mathematical models. The similarity in their foundational concepts can sometimes lead to confusion and difficulty in grasping the distinct nuances of each discipline. However, students facing these struggles have a reliable ally in Papersowl, an academic support platform that specializes in providing expert finance assignment assistance , economics homework help and other STEM subjects.

Crafting an essay on economics requires a clear understanding of economic theories, principles, and their real-world applications. Here's a comprehensive guide to help you write a well-structured and insightful economics essay:

Understanding the Essay Topic

Begin by thoroughly understanding the specific aspect of economics you're discussing. Economics covers a wide range of topics, from microeconomic concepts like supply and demand to macroeconomic issues like inflation or international trade. Determine the nature of the essay – is it analytical, argumentative, or descriptive? This will shape your approach and style of writing.

Conducting Comprehensive Research

Research is key to a successful economics essay. Utilize credible sources, including academic journals, economic textbooks, and reputable online resources. Focus on gathering data, statistics, case studies, and expert opinions that are relevant to your topic. Understanding both historical contexts and current economic trends can provide a comprehensive perspective on the subject.

Developing a Thesis Statement

Your thesis statement should clearly articulate the main argument or perspective of your essay. In economics, this might be a stance on a particular economic policy, an analysis of an economic trend, or an argument about a specific economic theory. Ensure your thesis is concise, direct, and lays the groundwork for your argument.

Planning the Essay Structure

Organize your essay in a clear, logical manner. Start with an introduction that sets the context and outlines your thesis statement. In the body, divide your main points into paragraphs, each focusing on a specific aspect of your argument. Use examples, data, and economic theories to support your points. Conclude by summarizing your main arguments and restating your thesis in light of the evidence you've presented.

Writing the Essay

Use clear and precise language in your writing. Economic concepts can be complex, so it's important to explain them clearly and avoid unnecessary jargon. Present your arguments logically, supporting them with data and examples. Be analytical and critical, especially when discussing economic models and theories.

Incorporating Data and Analysis

Economics essays often rely on data and statistical analysis. Ensure that any data used is relevant, up to date, and accurately interpreted. Graphs and charts can be effective in illustrating economic trends and relationships. Analyze the data to demonstrate how it supports your argument or provides insights into the economic issue you're discussing.

Citing Your Sources

Proper citation is essential in academic writing. Use an appropriate citation style (such as APA, MLA, or Chicago) and consistently cite all your sources, including data, theories, and quotations.

Editing and Proofreading

Review your essay for clarity, coherence, and logical flow of ideas. Check for accuracy in your economic arguments and ensure that your analysis is thorough. Proofread for grammar, spelling, and formatting issues. It can be beneficial to have someone else read your essay for feedback, especially if they have knowledge in economics.

Writing an essay on economics involves balancing in-depth understanding of economic theories and real-world examples, critical analysis, and effective communication. By carefully researching your topic, structuring your essay logically, and presenting your arguments with clarity and precision, you can create a compelling and informative economics essay that demonstrates your grasp of this dynamic field.

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Essay: United States Economy

Business / Samples May 9, 2011

Sample Essay

The economy of United States is considered to be one of the best economies of all times. But the economic condition of the United States at present is extensively understood to be the most critical since 1930s.  So far the achievements and steps taken by the government have been insufficient, late, and do not deal with original grounds which will ultimately have to be tackled. The escalating financial disaster, meltdown in housing sector, increased joblessness and Wall Street turmoil together with longer-term confrontations like defense expenditures, soaring health care expenses and offshore energy reliance are creating difficulties for the residents of the United States. These elements are creating problems for the current government and the policy makers.

In order to avoid these circumstances we should focus keenly on issues that are directly related to our country and must end the “War against Terrorism”. A hefty amount of dollars are spent on this regime and thousands of soldiers are transferred to countries like Iraq, Afghanistan etc which actually increases our defense budget. Moreover, governments should provide incentives to banks to purchase or refinance current mortgages and penalties for dishonest dealers and lenders, generate funds to assist house owners evade Foreclosures (Quain). Similarly, tax relief should be offered to middle class families and business taxes should be reduced. Moreover, estate tax and hefty taxes on small businesses must be eliminated (Sahadi).

Therefore policy makers should stress on essential factors and they must devise a policy that should clear the current turmoil and it must generate prosperity in the nation. The policy makers should implement policies that must benefit the country in both the long and the short run.

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The U.S. economy

Updated 27 April 2023

Subject Hero

Downloads 28

Category Economics

Topic Challenges ,  Wealth of Nation ,  World Economy

The Impact of Equal Pay on the US Economy

The US economy, like any other, is dependent on a number of factors in order to thrive. Having said that, it is also important to recognize that it is one of the world’s largest economies. Whatever the above may be, it has been impacted by various challenges over time, and while the most of them have been resolved, there are others that have yet to be. Equal pay is a prime example of a problem hurting the US economy. According to the National Women’s Law Center, a working American woman earns only 80 cents for every dollar earned by a man. The gap further widens for women of color and it has existed for the longest time ever. Therefore, equal pay is an economic issue that has been debated on given the circumstances that women are entitled to the same amount of salaries and wages as men for the same amount of input they render to different industries.

Competing Views on Equal Pay

The issue with equal pay is that even though it also has an ethical stand to it, it often raises competing solutions. On one hand, it is the perspective for most people that it is about time women were paid the same as men thus Federal laws should apply. This is because they tend to have the same skills, experiences, and educational knowledge to make them equal competitors for jobs and thus salaries should be competitive as well (Campbell). Furthermore, the Federal government already enacted an Act against pay discrimination as affecting women. The opposing side takes on the notion that the issues should be left allow for it to play out given the prevailing circumstances. Campbell explains that the inactive call as a solution looks at gender as not the only requirement for recruitment and competitive salary. Other aspects such as skills and experience need to be the basis for payment.

The Role of the Federal Government

Given the above, the most preferable will have to be the implementation of Federal laws. In 2015, a U.S. Magistrate ruled that it was inherently discriminating to pay women based on what their predecessor employers paid them. In addition to this, the Federal equal pay laws will help develop an environment where every employer has to respect the pay system. If the latter was to be picked as the solution, it would only mean that a few will benefit from it. This is more so true from a local government perspective where it is the responsibility of the latter to be innovative in encouraging employers to adopt the equal pay strategy. Frye further explains that the State government is also in a position to address the issue by providing grants to encourage equal pay, especially for women.

The Influence of the Federal Government

Therefore, it can be concluded that the U.S. Federal government has a lot of input and power when it comes to positively influencing equal pay in the country. In as much as the same level of government recently overturned a 2015 ruling in favor of women being paid salaries that were not reflective of their previous salaries as explained by (Hatch), there is still potential in the role the Federal has to play. This is out of the fact that it is at this level of governance that the most influence can come from. Therefore, the Federal government needs to enact favorable laws towards equal pay for the benefit of the economy.

Works Cited

Campbell, Alexia. “One Way to Ensure Equal Pay for Men and Women.” The Atlantic. 1 Nov 2016. Web. 23 May 2017 https://www.theatlantic.com/business/archive/2016/11/how-the-government-mostly-closed-its-gender-pay-gap/506084/

Frye, Jocelyn. “Next Steps for Progress on Equal Pay.” Center for American Progress, 12 Apr 2016. Web. 23 May 2017 https://www.americanprogress.org/issues/women/reports/2016/04/12/135267/next-steps-for-progress-on-equal-pay/

Hatch, Jenavieve. “Federal Court Rules That Employers Can Pay A Woman, Less As Long As Her Old Boss Did, Too.” Huffington post, 1 May 2017. Web. 23 May 2017 http://www.huffingtonpost.com/entry/federal-court-rules-that-employers-can-pay-a-woman-less-as-long-as-her-old-boss-did-too_us_5903435de4b0bb2d086d4481

National Women’s Law Center. “Equal Pay & the Wage Gap.” Nwlc.org, n.d. web 23 May 2017 https://nwlc.org/issue/equal-pay-and-the-wage-gap/

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Example Of US Economy Essay

Type of paper: Essay

Topic: Market , Trade , Business , Investment , Stock Market , Marketing , Company , Commerce

Published: 02/04/2020

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New York Stock Exchange (NYSE)

The New York Stock Exchange or the NYSE is a stock exchange market in the United States and it is located at the 11th Wall Street, in the city of New York. According to the NYSE Group report, NYSE is regarded as the world's leading stock exchange in terms of the stock market capitalization of the firms that are listed in the NYSE that stands at US$15.321trillion as of the month of June 2012. The mean daily trading monetary value in the year 2012 was estimated at US$180 billion and as a result the NYSE has developed into a universal market for stock exchange (New York Stock Exchange, 2013). The NYSE is crucial for the U.S. economy as it generates revenue for the federal government apart from helping the firms in raising capital for their ventures and expansion. The NYSE was established in 1792 and the several centuries of expansion and innovation have made the stock exchange to become a global securities marketplace. The stock exchange is under the management of the NYSE Euronext that was created after an amalgamation involving the NYSE and Euronext that is wholly an electronic firm dealing in stocks. Over the years, the NYSE has been committed to investors and corporations through the resolute and constant use of the latest stock exchange technologies so as to maintain the stock market quality. Presently, the NYSE offers an environment for buying and selling more than 8,200 business stocks and in addition to other securities apart from listing more than seventy of the world's leading corporations (Mecane, 2011). The NYSE also known as the Big Board offers a channel through which buyers and sellers can buy and sell shares in the stock market for corporations that are registered for open trading. The NYSE trading of shares is open throughout the week with the exclusion of national holidays that are announced by the NYSE beforehand. On the NYSE trading floor, the buying and selling of NYSE stock market shares is carried out in an uninterrupted auction format and the traders carry out stock business for the investors and corporations. The stock traders usually congregate around a suitable post where specialist stock brokers contracted by the NYSE member company act as auctioneers. As a result, the stock shares are auctioned in the open environment where buyers and sellers trade on the shares of the given companies (New York Stock Exchange, 2013). The trading of shares takes place daily at the NYSE trading ground where the shares are auctioned. The placing of open bids and offers are controlled by the NYSE trading floor page on the NYSE website where the stock exchange members act on behalf of the listed firms and individual investors in stocks. The buying and selling of orders for each of the listed securities meet openly on the NYSE trading positions that are assigned for every corporation. The NYSE trading floor is composed of 20 trading posts that have more than 500 trading positions and the prices for the stocks are settled on by the supply and demand equilibrium. The orders for the buying and selling of the stocks are channelled through a specific location so as to ensure that the shares are exposed to a variety of potential buyers and sellers (Mecane, 2011). The NYSE is regarded as an agency auction market where Exchange members carry out stock trading on behalf of firms and individual investors. The NYSE member firms are the companies and individuals who own "seats" on the NYSE trading floor and they are the only ones that are permitted to buy and sell securities on the NYSE trading floor. The NYSE member firms pay a given fee so as to own a seat on the NYSE trading floor apart from meeting thorough professional standards that are laid out by the Exchange (New York Stock Exchange, 2013). In conclusion, the NYSE is a vital organization in the economy of United States as it generates revenue for the federal government apart from helping the firms in raising capital for their ventures.

Mecane, E. (2011). What’s an Exchange to Do? The Role of the Exchange in Evaluating Algorithms. New York Stock: Scholastic Library Publishers. New York Stock Exchange. (2013, May 3). New York Stock Exchange Market. Retrieved from https://nyse.nyx.com/.

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The State of the US Economy Today Essay

Maintaining high and sustainable economic growth rates with all round adequacy of economic indicators has proven to be a difficult, or rather, impossible task for economies all over the globe. It has been observed that an economy may do well on the key economic indicators like the nominal GDP but it will have a number of economic indicators letting the nominal GDP down.

Most countries are struggling with issues like unemployment, poor balance of payments, social imbalance, etc. For instance, an economy may be doing well in nominal GDP terms but it may be faced with enormous problems like high inflationary rates which threaten the sustainability of economic status. The United States is not an exception to this. Despite its enviable performance, the United States faces seemingly insurmountable problems that threaten its future economic status. This paper looks into the current economic status of the U.S. and discusses the most contentious issues of the economy in greater depth.

The U.S. has enjoyed admirable publicity all over the world as the world’s largest economy. This is, mainly, due to its staggering nominal GDP which is normally in the tunes of tens of trillions of U.S. dollars. The U.S. also has an impressive purchasing power that has seen attractive figures of the GDP on the same terms. The economy has also, for decades, maintained impressive levels of per capita output which has also been a key indicator of its enviable economic performance. However, the economy also has its dark side. It is characterized by very high levels of debt that form a large percentage of its GDP every year. Of more concern is the fact that the levels of debt are increasing annually at a rate of a couple of trillions (Amadeo, 2010, p. 1).

Despite the impressive economic profile that the United States economy has historically held, it is now experiencing enormous problems as the economy has been plunged to more debt, year after year. The government is thus in a fix since most of the economic remedies it can use to reverse, or at best, improve the situation are technically inappropriate. The government therefore will not achieve much by overspending or even under taxing.

Opinions held by a good number of the shrewdest economists in the United States are that the government should try the simplification of its related systems. These include the financial systems, healthcare, taxation system, and the retirement system. The stated systems are currently the ones threatening to bring the economy of the United States to its knees and thus an intervention in the same is inevitable if any progress is to be made.

Since June, the indicators of economic progress were not promising for the United States. This was amid the ending of the hiring o census personnel which was followed by three months of job loss. The recovery of the United States economy from the current financial crisis will, thus, be moderate courtesy of the nature of contemporary economy that has a number of substantial shortcomings.

The recession, which peaked in 2008/2009, was as a result of a devastating increase of real estate and a serious financial crash that affected the real estate market leaving a good number of commercial and residential houses unoccupied for the most part of the financial crisis (Schiller, 2010, p. 51). It also resulted from the efforts by highly indebted consumers to get out from their debts. Banks also held back, or they were unable to give credit to customers even when some customers were willing to take it. The fund rate of the federal government is currently nearing zero and therefore not much can be done to achieve economic stimulation.

The situation is made worse by a number of factors that have largely widened the fiscal gap. One of those factors is the fact that about 78 million United States citizens who are employed fall under the baby boomers category (Amadeo, 2010, p. 1). This is to say that in a few years, hefty collections that potentially exceed the GDP on per-capita terms are about to be collected, virtually, at once. The value of the collections from Medicaid, medicare and Social Security is estimated at $ 4 trillion annually.

This is, more or less, equivalent to an enormous Ponzi scheme, run for six continuous decades. In this case, resources are sourced from the young and given to the people who have attained the legal age as the young are promised that when their turn comes, their payments will also be made (Schiller, 2010, p. 54). This has been one of the key contributors of the high levels of debt in the United States, together with other factors like the ease of credit access.

At its best, the United States recovery can be said to be U-shaped, with major similarities to the Japanese economy in the start of the 1990 decade. It is believed that the current United States economy will be, more or less, a reflection of “the lost decade”, a phrase used to describe Japanese economy in the 1990s. Thus the economy of the United States could stagnate for a long period of time with barely any growth.

The census Bureau compiled a report that showed a rise in the US 2009 poverty levels to 14.3%. This figure is the highest in a period of about fifteen years. It went up from a slightly lower percentage for 2008, which was 13.2% (Schiller, 2010, p. 37). It was also stated that 43.6 million American citizens were legally poor in 2009 with the threshold set at US$ 22,000 for a family of four, with kids. The median income for households in real terms was stated to be US$ 49,777 which was almost the same as the one for 2008 statistically (Schiller, 2010, p. 48). This high poverty rate can be attributed to the persistently increasing rate of unemployment during the year. According to the department of labor, the unemployed rose from 9 million to a staggering 14 million while the employed reduced from 145 million to about 140 million (Hung, 2010, p. 1).

Due to the situation of the United States economy and the ever increasing need to come up with remedial policies for reversing the economic situation, the United States government may be forced to use desperate measures in a bid to recover. One of aforementioned options that the U.S. government may resort to is substantially cutting the benefits that are to be paid to the baby boomers once they retire (Amadeo, 2010, p. 1). However, this may result to more problems than the United States is currently experiencing. The second option is an increase in the tax rates and tax bases by the U.S. government and the third is the printing of enough money to pay its bills.

From an economic point of view, the three options stated above will have equally destructive effects. Firstly, the cutting of the retirement benefits of the elderly will discourage the young generation from Social Security. This means that the whole system will be unable to sustain itself just like an unpopular Ponzi scheme and thus the government will not be able to pay its bills. Similarly, if the government opts to increase its taxation revenue, the American citizens will access more credit and thus the government will plunge deeper into debt. The last option of printing money will result in high inflationary rates that are bound to affect the economy adversely (Hung, 2010, p. 1).

As evidenced in the discussion above, the United States has been doing well economically but with a serious economic problem in its high levels of debt. This situation was worsened by the current depression that peaked in the year 2008 (Schiller, 2010, p. 64). Although then Obama government has been trying to overspend its way out of the debt, the situation is yet to change and more tactical economic interventions are required in order to change the situation. The U.S. government should thus come up with appropriate economic policies that will help to reverse the situation and avoid the possibility of economic downfall that the government is currently facing. The proposed action will be very instrumental in stabilizing the economy and also making it more balanced since the levels of debt are increasing each year at an alarming rate.

Reference List

Amadeo, K. (2010). Why the Fed Wants Higher Prices With QE2. Web.

Hung, J. (2010). The Grim State of the U.S. economy. Web.

Schiller, B. (2010). The Micro Economy Today . New York. McGraw-Hill.

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The US Economy Analysis

Introduction.

Despite the domestic challenges that America has faced over the years, especially following economic recessions as witnessed in the past, its financial system remains the largest and most significant across the world. In fact, the economy represents about 20 percent of the total global output. In addition, according to IMF rankings, the US has the sixth largest per capita income in the world. The dominant drivers of this expansive economy encompass the technological, services, financial, retail, and the health sectors. Nonetheless, just like most other economies, the economic growth of the US has been marked by phases of expansion, recession, and recovery.

Currently, the economy is still recovering from an economic turmoil caused by the global recession of 2008. As revealed in this paper, a number of factors such as policy failure, excessive risk-taking by financial institutions, widespread lending by the mortgage industry, and high government debts have been linked to the 2008 economic recession. Fortunately, the formulation and implementation of macroeconomic policy solutions by the US Federal government have been instrumental in speeding up the recovery and restoration of the economy to its initial glory. In this regard, experts including the IMF, remain optimistic concerning the future economic prospects for both the US and consequentially the global economy.

The US GDP and the Primary Measure of its Growth

As shown in Graph 1 below, between 2001 and 2007, the US economy experienced a slow but steady expansion at an average GDP growth rate of 2.5 percent. Moreover, the GDP grew from 12.682 trillion dollars in 2001 to 14.874 trillion dollars in 2007. During this period, the US economy experienced a boom in the housing market, as well as equity shares, resulting in record highs in profits by corporate firms.

In 2008, as revealed in Graph 1 above, the US economy sank into a recession with far-reaching impacts on economic indicators such as GDP, Real GDP, and nominal GDP. Moreover, Chang et al. highlight that the depression also resulted in a downturn of the US banking sector, the stock market, and a rise in unemployment (1). For instance, the recession led to a reduction in the Gross Domestic Product from 14.874 trillion dollars in 2007 to 14.830 trillion dollars and 14.414 trillion dollars in 2008 and 2009 respectively.

The depression also resulted in a fall in the growth rate from 1.8 percent in 2007 to -0.3 percent and -2.3 percent in 2008 and 2009 respectively. However, after the recession period of 2008-2009, the US economy has been in a phase of expansion and recovery at a steady rate of 2.0 percent. Subsequently, the GDP has grown from 14.419 trillion dollars in 2009 to 16.662 trillion dollars in 2016. The rate of growth has also been relatively low when compared to previous expansion periods such as the one between 2001 and 2007. For instance, the 2.0 percent growth expansion since 2010 is lower compared to that of 2.7 percent that existed between 2001 and 2007.

Factors that Led to the US Recession

According to Bordo, policy failure was a major catalyst that contributed to the US economic recession of 2008 (107). Specifically, the Federal Housing Administration failed to regulate the mortgage industry in an effort to push for affordable housing for Americans. This situation was actualized following the reduction of capital requirements by government-sponsored enterprises (GSEs) and consequently encouraging lending by mortgage institutions. As a result, the GSEs increased their profits, a move that further encouraged them to take more risks.

Furthermore, the Bush administration urged the mortgage institutions to increase their lending to low-income households. According to Bordo, the lack of a clear regulatory policy by the Federal Housing Administration resulted in poor lending standards, thus paving the way for money borrowing with little regard of income, assets, job, or documentation (107). Bordo (121) also highlights that the Fed’s choice in the targeted lending rather than the market liquidity provision exposed it to the temptation of politicizing the selection of credit recipients, especially the low-income families.

Despite such policies increasing the accessibility of the targeted recipients to credit, it also increased the number of risky subprime mortgages. This situation eventually led to the collapse of the mortgage industry due to the witnessed increase in defaulters. Another policy failure by the Fed as mentioned by Bordo regards the bailing out of insolvent firms such as Bear Stearns and AIG (122). Such policy actions only served to increase the appetite for credit lending by mortgage institutions through hiding the risky nature of the borrowing.

Another factor that has been associated with the 2008 economic recession is excessive risk-taking by financial institutions. Furthermore, a number of elements have been regarded as incentives to excessive risk taking by financial institutions that existed before 2008. One of these elements is compensation. The unregulated compensation mechanisms that were adopted by financial institutions may have partly been responsible for excessive risk taking by these institutions through their encouragement of unduly risk ventures.

The beneficiaries of unregulated compensation and excessive risk taking include traders, investors, investment bankers, and lenders. In this regard, two types of compensation asymmetries emerged because of excessive risk taking. One of these asymmetries was the treatment of losses and gains. For instance, while losses were part of the result of risk-taking ventures by financial professionals, there lacked a comparable cap on gains. This state of affairs implied that their compensation would never exceed a certain low while the gains remained limitless.

Secondly, there existed an asymmetry or imbalance between the magnitude, term, and the probability of losses and gains. For example, bonus arrangements were issued to reward financial professionals for their short-term results, even though they were later reversed following the 2008 recession. Such systems only encouraged these professionals to take greater risks that would bring superior rewards while concealing the losses that would have resulted from taking such risks.

Reavis believes that widespread lending by the mortgage institutions triggered the eventful US financial recession of 2008 (3). Before the crisis, financial institutions were accustomed to issuing high-risk loans and mortgages to people without any regard for their ability to repay the loan. The reduction in credit scrutiny resulted in a short-term boom of the housing market and consequently growth in the US economy. This growth resulted in an increase in household debt to GDP ratio from 50 to 100 percent by the mid-2000s.

Since most of the recipients of subprime mortgages lacked the ability to pay back the loans, they began to default. By 2006, the mortgage industry had begun showing indications of a burst. More people were beginning to default, with the number of foreclosures also increasing. As a result, the market prices for housing were pushed down, thus leading to a cessation of the trading of subprime mortgages by Wall Street giants. Eventually, small mortgage companies were left with huge debts from banks, a situation that also made them default their loans, thus triggering a collapse of the financial sector since many banks were declared insolvent.

Macroeconomic Policy Solutions that Led to the Recovery and Current Expansion

One of the macroeconomic solutions that have been instrumental in the recovery and current expansion of the US economy is the development and implementation of the Economic Stimulus Payments Act (Broda and Parker 26). This policy was passed and signed into law in 2008 by the American legislative body in an effort to encourage household spending. The payments consisted of basic and conditional reimbursements. Basic payments entailed a maximum compensation of 300-600 dollars for couples that filed the case jointly and a tax liability of up to 600 to 1200 dollars for those who did it discretely. On the other hand, households were issued with a conditional payment as a supplemental compensation of 300 dollars per child if they were eligible for the tax child credit. Broda and Parker note that the program distributed about 100 billion dollars to households and as a result increased their spending on goods and services (26).

Fitoussi highlights government bailouts as a policy response aimed at rescuing government mortgage lenders such as Fannie Mae and Freddie Mac (114). The two entities are said to have owned 76 percent of the US mortgages, thus making them a significant player in the 2008 financial crisis. Therefore, their bailout through covering all their losses by the Federal government was instrumental in the recovery of the housing market. Likewise, the government has also been involved in bailing out large financial institutions such as AIG since the failure of these institutions caused a freeze in the US credit market. However, Erkens et al. argue that the massive bailouts of these institutions by the Federal government after the 2008 recession may have diminished the positive effect of raising capital through equity by firms, consequently negatively affecting the long-term performance of these firms (402).

To counter the failed monetary guidelines by the Federal Reserve, the Federal Open Market Committee (FOMC) formulated two unconventional monetary policy tools. The tools consisted of the quantitative easing programs and explicit forward guidance for future federal funds rate. The two unconventional policies would provide the necessary accommodation regarding the monetary policy that would aid in ending the recession while subsequently strengthening the recovery of the economy. Moreover, the policy actions were instrumental in putting down pressure on interest rates in the long term, resulting in an improvement in the nation’s overall financial condition, including boosting the corporate equity and residential property prices. In turn, favorable financial conditions also helped to bolster aggregate demand, including checking unwanted disinflationary influences, through the increased support for household spending, investment, net exports, and construction.

Taylor asserts that one of the causes of the 2008 depression in the United States was the poor implementation of the existing regulatory policy by the New York Fed for financial institutions (4). As a result, the New York Fed intentionally or inadvertently allowed the financial institutions to sway from the existing safety rules, hence allowing them to take excessive risks. Taylor also affirms, “The main problem was not insufficient regulations, but a failure to enforce existing regulations” (5). In this regard, there have been many changes in the regulatory policy for financial institutions.

Taylor mentions the Dodd-Frank Act as one of the policy changes that have positively influenced the US economic recovery and expansion (6). The policy suggested a merger of the Office of Thrift Supervision into the Controller of Currency Office. Additionally, the Act created hundreds of new regulatory rules aimed at increasing dogmatic interventions in the financial sector. Furthermore, other regulatory policies have also been advocated and implemented such as the 30 percent increase in the number of federal workers who were involved in regulatory activities between the years 2006 and 2012.

Future Economic Outlook for the US and the Global Economy

According to Davis et al., the global economy has experienced a low growth rate since the end of the 2008 financial crisis (6). Moreover, interest rates have remained low, despite the increase in debt levels. This situation has resulted in the poor performance of government bonds that continue to record negative yields. Regarding income, real wages remain low in spite of the 80 percent of the global economy at full employment. This state of affairs has led to an increase in the inequality gap in both developed and developing markets. Regardless of the aggressive policy efforts by national economies such as the US aimed at countering deflationary shocks and bolstering economic growth, world economic growth has stagnated at low rates.

In addition, the low growth and high inflation of the US and global economy may restrain future growth rates unless drastic economic measures are taken. Central banks across the world are also said to reach a critical stage of exceeding the stipulated limits of monetary policies, resulting in attenuated benefits and increased economic risks. Davis et al. argue that the current economic strategies by central banks such as negative interest rates do not respond sufficiently to the existing and future economic pressures such as the weak demand, low consumer spending, unemployment, and reduced investments (7). Nonetheless, Davis et al. suggest that the right course of action, for instance, by the US Federal Reserve, would be to deliberately raise short-term rates to 1.5 percent in 2017 while also reducing its long-term projections to a rate a 2.5 percent (8). Such level would be more consistent with the global growth, thus improving the overall outlook of the economy.

On a positive note, Davis et al. believe that the potential growth in the global economy is poised to pick up modestly as time goes by (8). This assertion is based on the existing prospective growth in productivity rates, thanks to supportive structural factors such as a better utilization of innovative digital technologies, globalization, and demographic changes (an aging population, baby boomers and a decline in dependency ratios) followed by the recovery of the labor market since more unemployed people will get jobs in the technological companies. Furthermore, the slowing down of growth in emerging markets, a reduced accumulation of the US Fed reserves, and the continued increase in the level of global debts can put pressure on interest rates. This situation may reduce the cost of technology, consequently stabilizing future inflation rates and yields.

Similarly, the IMF remains positive on growth prospects in the global economy, which is currently estimated at 3.0 percent. This figure is in line with forecasts made on October 2016. Moreover, the IMF forecasts an accelerated growth in both emerging and advanced economies in 2017 and 2018 at the projections of 3.4 and 3.6 percent respectively. Specifically, advanced economies such as the US are projected to grow at a rate of 1.9 and 2.0 percent for 2017 and 2018 respectively. Nonetheless, these projections remain uncertain in the light of the probable changes in policy frameworks by the United States following the transformation in administration.

The US economy has experienced growth changes from expansion and depression to recovery. For example, between 2001 and 2007, the economy experienced a period of steady expansion at a rate of 2.7 percent. This development preceded a period of depression that lasted almost two years (2008 and 2009). During the downturn, the country’s GDP growth rate sank to rates of -0.3 percent and -2.3 percent in 2008 and 2009 respectively.

Factors that have been implicated as the causes of the depression include poor policy formulation and implementation, a widespread lending by mortgage institutions, and the excessive risk-taking by financial institutions. To counter the depression and regain growth, the US Federal government has been involved in the implementation of macroeconomic solutions. In this regard, four policies have been formulated. They include fiscal policies, for instance, the Economic Stimulus Act, monetary policies such as FOMC quantitative easing programs, and the explicit forward guidance and regulatory policy solutions such as the Dodd-Frank Act. The policies have been pivotal in the US post-depression expansion and recovery.

Works Cited

Amadeo, Kimberley. “ The Strange Ups and Downs of the U.S. Economy Since 1929 .” The Balance .

Bordo, Michael. “ The Federal Reserve’s Role: Actions Before, During, and After the 2008 Panic in the Historical Context of the Great Contraction. ” Economic Working Papers.

Broda, Christian, and Jonathan Parker. “The Economic Stimulus Payments of 2008 and the Aggregate Demand for Consumption.” Journal of Monetary Economics , vol. 68, no. 1, 2014, pp. 20-36.

Chang, Shu-Sen, et al. “Impact of 2008 Global Economic Crisis on Suicide: Time Trend Study in 54 Countries.” British Medical Journal, vol. 347, no. 1, 2013, pp. 1-15.

Davis, Joseph, et al. “Economic and Market Outlook: Stabilization, not Stagnation.” Vanguard Research, vol. 1, no. 1, 2017, pp. 1-39.

Erkens, David, et al. “Corporate Governance in the 2007–2008 Financial Crisis: Evidence From Financial Institutions Worldwide.” Journal of Corporate Finance , vol. 18, no. 2, 2012, pp. 389-411.

Fitoussi, Jean-Paul. After the Crisis . LUISS University Press, 2012.

Reavis, Cate. “The Global Financial Crisis of 2008: The Role of Greed, Fear, and Oligarchs.” MIT Sloan Management Review , vol. 16, no. 1, 2012, pp. 1-22.

Taylor, John. Causes of the Financial Crisis and the Slow Recovery: A 10-Year Perspective. Stanford University Press, 2013.

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What were the significant developments in the US economy 1945-1989?

Connolly and Larkin in the Irish Labour Movement for Leaving Cert History #625Lab

Freedom for the Wolves

Neoliberal orthodoxy holds that economic freedom is the basis of every other kind. That orthodoxy, a Nobel economist says, is not only false; it is devouring itself.

A ny discussion of freedom must begin with a discussion of whose freedom we’re talking about. The freedom of some to harm others, or the freedom of others not to be harmed? Too often, we have not balanced the equation well: gun owners versus victims of gun violence; chemical companies versus the millions who suffer from toxic pollution; monopolistic drug companies versus patients who die or whose health worsens because they can’t afford to buy medicine.

Understanding the meaning of freedom is central to creating an economic and political system that delivers not only on efficiency, equity, and sustainability but also on moral values. Freedom—understood as having inherent ties to notions of equity, justice, and well-being—is itself a central value. And it is this broad notion of freedom that has been given short shrift by powerful strands in modern economic thinking—notably the one that goes by the shorthand term neoliberalism , the belief that the freedom that matters most, and from which other freedoms indeed flow, is the freedom of unregulated, unfettered markets.

F. A. Hayek and Milton Friedman were the most notable 20th-century defenders of unrestrained capitalism. The idea of “unfettered markets”—markets without rules and regulations—is an oxymoron because without rules and regulations enforced by government, there could and would be little trade. Cheating would be rampant, trust low. A world without restraints would be a jungle in which only power mattered, determining who got what and who did what. It wouldn’t be a market at all.

Nonetheless, Hayek and Friedman argued that capitalism as they interpreted it, with free and unfettered markets, was the best system in terms of efficiency, and that without free markets and free enterprise, we could not and would not have individual freedom. They believed that markets on their own would somehow remain competitive. Remarkably, they had already forgotten—or ignored—the experiences of monopolization and concentration of economic power that had led to the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). As government intervention grew in response to the Great Depression, Hayek worried that we were on “the road to serfdom,” as he put it in his 1944 book of that title; that is, on the road to a society in which individuals would become subservient to the state.

Rogé Karma: Why America abandoned the greatest economy in history

My own conclusions have been radically different. It was because of democratic demands that democratic governments, such as that of the U.S., responded to the Great Depression through collective action. The failure of governments to respond adequately to soaring unemployment in Germany led to the rise of Hitler. Today, it is neoliberalism that has brought massive inequalities and provided fertile ground for dangerous populists. Neoliberalism’s grim record includes freeing financial markets to precipitate the largest financial crisis in three-quarters of a century, freeing international trade to accelerate deindustrialization, and freeing corporations to exploit consumers, workers, and the environment alike. Contrary to what Friedman suggested in his 1962 book, Capitalism and Freedom , this form of capitalism does not enhance freedom in our society. Instead, it has led to the freedom of a few at the expense of the many. As Isaiah Berlin would have it: Freedom for the wolves; death for the sheep.

I t is remarkable that , in spite of all the failures and inequities of the current system, so many people still champion the idea of an unfettered free-market economy. This despite the daily frustrations of dealing with health-care companies, insurance companies, credit-card companies, telephone companies, landlords, airlines, and every other manifestation of modern society. When there’s a problem, ordinary citizens are told by prominent voices to “leave it to the market.” They’ve even been told that the market can solve problems that one might have thought would require society-wide action and coordination, some larger sense of the public good, and some measure of compulsion. It’s purely wishful thinking. And it’s only one side of the fairy tale. The other side is that the market is efficient and wise, and that government is inefficient and rapacious.

Mindsets, once created, are hard to change. Many Americans still think of the United States as a land of opportunity. They still believe in something called the American dream, even though for decades the statistics have painted a darker picture. The rate of absolute income mobility—that is, the percentage of children who earn more than their parents—has been declining steadily since the Second World War. Of course, America should aspire to be a land of opportunity, but clinging to beliefs that are not supported by today’s realities—and that hold that markets by themselves are a solution to today’s problems—is not helpful. Economic conditions bear this out, as more Americans are coming to understand. Unfettered markets have created, or helped create, many of the central problems we face, including manifold inequalities, the climate crisis, and the opioid crisis. And markets by themselves cannot solve any of our large, collective problems. They cannot manage the massive structural changes that we are going through—including global warming, artificial intelligence, and the realignment of geopolitics.

All of these issues present inconvenient truths to the free-market mindset. If externalities such as these are important, then collective action is important. But how to come to collective agreement about the regulations that govern society? Small communities can sometimes achieve a broad consensus, though typically far from unanimity. Larger societies have a harder go of it. Many of the crucial values and presumptions at play are what economists, philosophers, and mathematicians refer to as “primitives”—underlying assumptions that, although they can be debated, cannot be resolved. In America today we are divided over such assumptions, and the divisions have widened.

The consequences of neoliberalism point to part of the reason: specifically, growing income and wealth disparities and the polarization caused by the media. In theory, economic freedom was supposed to be the bedrock basis for political freedom and democratic health. The opposite has proved to be true. The rich and the elites have a disproportionate voice in shaping both government policies and societal narratives. All of which leads to an enhanced sense by those who are not wealthy that the system is rigged and unfair, which makes healing divisions all the more difficult.

Chris Murphy: The wreckage of neoliberalism

As income inequalities grow, people wind up living in different worlds. They don’t interact. A large body of evidence shows that economic segregation is widening and has consequences, for instance, with regard to how each side thinks and feels about the other. The poorest members of society see the world as stacked against them and give up on their aspirations; the wealthiest develop a sense of entitlement, and their wealth helps ensure that the system stays as it is.

The media, including social media, provide another source of division. More and more in the hands of a very few, the media have immense power to shape societal narratives and have played an obvious role in polarization. The business model of much of the media entails stoking divides. Fox News, for instance, discovered that it was better to have a devoted right-wing audience that watched only Fox than to have a broader audience attracted to more balanced reporting. Social-media companies have discovered that it’s profitable to get engagement through enragement. Social-media sites can develop their algorithms to effectively refine whom to target even if that means providing different information to different users.

N eoliberal theorists and their beneficiaries may be happy to live with all this. They are doing very well by it. They forget that, for all the rhetoric, free markets can’t function without strong democracies beneath them—the kind of democracies that neoliberalism puts under threat. In a very direct way, neoliberal capitalism is devouring itself.

Not only are neoliberal economies inefficient at dealing with collective issues, but neoliberalism as an economic system is not sustainable on its own. To take one fundamental element: A market economy runs on trust. Adam Smith himself emphasized the importance of trust, recognizing that society couldn’t survive if people brazenly followed their own self-interest rather than good codes of conduct:

The regard to those general rules of conduct, is what is properly called a sense of duty, a principle of the greatest consequence in human life, and the only principle by which the bulk of mankind are capable of directing their actions … Upon the tolerable observance of these duties, depends the very existence of human society, which would crumble into nothing if mankind were not generally impressed with a reverence for those important rules of conduct.

For instance, contracts have to be honored. The cost of enforcing every single contract through the courts would be unbearable. And with no trust in the future, why would anybody save or invest? The incentives of neoliberal capitalism focus on self-interest and material well-being, and have done much to weaken trust. Without adequate regulation, too many people, in the pursuit of their own self-interest, will conduct themselves in an untrustworthy way, sliding to the edge of what is legal, overstepping the bounds of what is moral. Neoliberalism helps create selfish and untrustworthy people. A “businessman” like Donald Trump can flourish for years, even decades, taking advantage of others. If Trump were the norm rather than the exception, commerce and industry would grind to a halt.

We also need regulations and laws to make sure that there are no concentrations of economic power. Business seeks to collude and would do so even more in the absence of antitrust laws. But even playing within current guardrails, there’s a strong tendency for the agglomeration of power. The neoliberal ideal of free, competitive markets would, without government intervention, be evanescent.

We’ve also seen that those with power too often do whatever they can to maintain it. They write the rules to sustain and enhance power, not to curb or diminish it. Competition laws are eviscerated. Enforcement of banking and environmental laws is weakened. In this world of neoliberal capitalism, wealth and power are ever ascendant.

Neoliberalism undermines the sustainability of democracy—the opposite of what Hayek and Friedman intended or claimed. We have created a vicious circle of economic and political inequality, one that locks in more freedom for the rich and leaves less for the poor, at least in the United States, where money plays such a large role in politics.

Read: When Milton Friedman ran the show

There are many ways in which economic power gets translated into political power and undermines the fundamental democratic value of one person casting one vote. The reality is that some people’s voices are much louder than others. In some countries, accruing power is as crude as literally buying votes, with the wealthy having more money to buy more votes. In advanced countries, the wealthy use their influence in the media and elsewhere to create self-serving narratives that in turn become the conventional wisdom. For instance, certain rules and regulations and government interventions—tax cuts for the wealthiest Americans, deregulation of key industries—that are purely in the interest of the rich and powerful are also, it is said, in the national interest. Too often that viewpoint is swallowed wholesale. If persuasion doesn’t work, there is always fear: If the banks are not bailed out, the economic system will collapse, and everyone will be worse off. If the corporate tax rate is not cut, firms will leave and go to other jurisdictions that are more business-friendly.

Is a free society one in which a few dictate the terms of engagement? In which a few control the major media and use that control to decide what the populace sees and hears? We now inhabit a polarized world in which different groups live in different universes, disagreeing not only on values but on facts.

A strong democracy can’t be sustained by neoliberal economics for a further reason. Neoliberalism has given rise to enormous “rents”—the monopoly profits that are a major source of today’s inequalities. Much is at stake, especially for many in the top one percent, centered on the enormous accretion of wealth that the system has allowed. Democracy requires compromise if it is to remain functional, but compromise is difficult when there is so much at stake in terms of both economic and political power.

A free-market, competitive, neoliberal economy combined with a liberal democracy does not constitute a stable equilibrium—not without strong guardrails and a broad societal consensus on the need to curb wealth inequality and money’s role in politics. The guardrails come in many forms, such as competition policy, to prevent the creation, maintenance, and abuse of market power. We need checks and balances, not just within government, as every schoolchild in the U.S. learns, but more broadly within society. Strong democracy, with widespread participation, is also part of what is required, which means working to strike down laws intended to decrease democratic participation or to gerrymander districts where politicians will never lose their seats.

Whether America’s political and economic system today has enough safeguards to sustain economic and political freedoms is open to serious question.

U nder the very name of freedom, neoliberals and their allies on the radical right have advocated policies that restrict the opportunities and freedoms, both political and economic, of the many in favor of the few. All these failures have hurt large numbers of people around the world, many of whom have responded by turning to populism, drawn to authoritarian figures like Trump, Jair Bolsonaro, Vladimir Putin, and Narendra Modi.

Perhaps we should not be surprised by where the U.S. has landed. It is a country now so divided that even a peaceful transition of power is difficult, where life expectancy is the lowest among advanced nations, and where we can’t agree about truth or how it might best be ascertained or verified. Conspiracy theories abound. The values of the Enlightenment have to be relitigated daily.

There are good reasons to worry whether America’s form of ersatz capitalism and flawed democracy is sustainable. The incongruities between lofty ideals and stark realities are too great. It’s a political system that claims to cherish freedom above all else but in many ways is structured to deny or restrict freedoms for many of its citizens.

I do believe that there is broad consensus on key elements of what constitutes a good and decent society, and on what kind of economic system supports that society. A good society, for instance, must live in harmony with nature. Our current capitalism has made a mess of this. A good society allows individuals to flourish and live up to their potential. In terms of education alone, our current capitalism is failing large portions of the population. A good economic system would encourage people to be honest and empathetic, and foster the ability to cooperate with others. The current capitalist system encourages the antithesis.

But the key first step is changing our mindset. Friedman and Hayek argued that economic and political freedoms are intimately connected, with the former necessary for the latter. But the economic system that has evolved—largely under the influence of these thinkers and others like them—undermines meaningful democracy and political freedom. In the end, it will undermine the very neoliberalism that has served them so well.

For a long time, the right has tried to establish a monopoly over the invocation of freedom , almost as a trademark. It’s time to reclaim the word.

This article has been adapted from Joseph E. Stiglitz’s new book, The Road to Freedom: Economics and the Good Society .

​When you buy a book using a link on this page, we receive a commission. Thank you for supporting The Atlantic.

Support for this project was provided by the William and Flora Hewlett Foundation.

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US Economy News Today: Fed's Preferred Inflation Measure Shows Stubborn Inflation Increasing

Taylor Tompkins has worked for more than a decade as a journalist covering business, finance, and the economy. She has logged thousands of hours interviewing experts, analyzing data, and writing articles to help readers understand economic forces. She is the Economics Editor for news at Investopedia.

Welcome to Investopedia's economics live blog, where we explain what the day's news says about the state of the U.S. economy and how that's likely to affect your finances. Here we compile data releases, economic reports, quotes from expert sources and anything else that helps explain economic issues and why they matter to you.

Today, the Federal Reserve's preferred measure of inflation showed inflation remained stubbornly high, with the annual tally up from last month.

Consumer Sentiment Dips in April as Inflation Expectations Worsen

Consumers’ feelings about the overall economy aren’t changing much, however, fears of inflation are mounting, according to Friday's edition of the University of Michigan consumer sentiment survey .

The Consumer Sentiment Index fell by more than two points to come in at 77.2 in April, just below analyst estimates, but Director Joanne Hsu said the survey has bounced within a two-and-a-half point range for most of this year.  

“Consumer sentiment continued to plateau and was virtually unchanged for the third month in a row,” she said. 

The final survey for April showed inflation fears are creeping back in, with consumers’ year-ahead expectations for price increases moving up to 3.2%, while the long-run expectations were for prices to rise 3% year-over-year. 

The inflation expectations match recent upticks in inflation readings , including today’s Personal Consumption Expenditures (PCE) inflation data. It also could give Federal Reserve officials more to think about when evaluating interest rate changes at its upcoming meeting, as consumer inflation expectations are a key element officials consider. 

The survey also showed some diverging opinions among different groups of consumers. 

“Sentiment for younger consumers rose, in contrast to middle-aged and older adults whose sentiment changed little or fell.," Hsu said.

-Terry Lane

What Does Today's Inflation Information Mean for the Federal Reserve?

Rate cuts may be less likely in the immediate future after today's report on inflation.

While today's report didn't shock by coming in too much higher than expectations, it did show the opposite of what the Federal Reserve is looking for. The annual inflation rate moved further from its 2% goal by rising to 2.7% in March.

"Whichever way you crunch the numbers, this clearly isn’t the sort of inflation momentum where the Fed could be comfortable cutting rates," wrote Deutsche Bank's Jim Reid before the data was released.

In the past few weeks, the Fed had already been attempting to walk back expectations for rate cuts on the back of higher-than-expected data in jobs, consumer spending and inflation.

Today's report continues to make their job more difficult as they head into their meeting next week. While they are not expected to move their influential fed funds rate, their communications after the meeting will be highly scrutinized for hints at how they're thinking about the path ahead

Inflation Comes in High But Mostly As Expected

The cost of living measured by the Bureau of Economic Analysis’s  Personal Consumption Expenditures (PCE)  index increased on par over the month in March at 0.3%. It rose slightly hotter than expected on a yearly basis at 2.7%. Economists expected it to have increased 2.6% over the 12 months ending in March, according to a survey of forecasters by Dow Jones Newswires and The  Wall Street Journal .

That is an acceleration from the 2.5% annual rate  reported in February , and still above the 2% rate officials at the Federal Reserve target when they set the nation’s  monetary policy . 

PCE did not drastically jump, as was expected by some after yesterday's GDP report. January's annual rate was revised, up from 2.4% to 2.5%. That could come as a relief to some market watchers who were worried the quarterly figure belied hidden inflation in March.

University of Michigan. “ Consumer Sentiment Index .”

Bureau of Economic Analysis. " Personal Consumption Expenditures ."

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Strict new EPA rules would force coal-fired power plants to capture emissions or shut down

FILE - The Marshall Steam Station coal power plant operates March 3, 2024, near Mooresville, N.C. A rule issued April 24, 2024, by the Environmental Protection Agency would force power plants fueled by coal or natural gas to capture smokestack emissions or shut down. (AP Photo/Chris Carlson, File)

Environmental Protection Agency Administrator Michael Regan announces final standards to reduce pollution from power plants during an event at Howard University on Thursday, April 25, 2024, in Washington. (AP Photo/Kevin Wolf)

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WASHINGTON (AP) — Coal-fired power plants would be forced to capture smokestack emissions or shut down under a rule issued Thursday by the Environmental Protection Agency.

New limits on greenhouse gas emissions from fossil fuel-fired electric plants are the Biden administration’s most ambitious effort yet to roll back planet-warming pollution from the power sector, the nation’s second-largest contributor to climate change . The rules are a key part of President Joe Biden’s pledge to eliminate carbon pollution from the electricity sector by 2035 and economy-wide by 2050.

The rule was among four measures targeting coal and natural gas plants that the EPA said would provide “regulatory certainty” to the power industry and encourage them to make investments to transition “to a clean energy economy.” The measures include requirements to reduce toxic wastewater pollutants from coal-fired plants and to safely manage coal ash in unlined storage ponds.

EPA Administrator Michael Regan said the rules will reduce pollution and improve public health while supporting the reliable, long-term supply of electricity that America needs.

“One of the biggest environmental challenges facing our nation is man-made pollution that damages our air, our water and our land,” Regan said in a speech at Howard University. “Not only is this pollution a major threat to public health — it’s pushing our planet to the brink.’'

Regan called the power plant rules “a defining moment” for his agency as it works to “build a cleaner and healthier future for all of us.’'

The plan is likely to be challenged by industry groups and Republican-leaning states. They have repeatedly accused the Democratic administration of overreach on environmental regulations and have warned of a looming reliability crisis for the electric grid. The rules issued Thursday are among at least a half-dozen EPA rules limiting power plant emissions and wastewater pollution.

Environmental groups hailed the EPA’s latest action as urgently needed to protect against the devastating harms of climate change.

The power plant rule marks the first time the federal government has restricted carbon dioxide emissions from existing coal-fired power plants. The rule also would force future electric plants fueled by coal or gas to control up to 90% of their carbon pollution. The new standards will avoid 1.38 billion metric tons of carbon pollution through 2047, equivalent to the annual emissions of 328 million gas cars, the EPA said, and will provide hundreds of billions of dollars in climate and health benefits, measured in fewer premature deaths, asthma cases and lost work or school days.

Coal plants that plan to stay open beyond 2039 would have to cut or capture 90% of their carbon dioxide emissions by 2032, the EPA said. Plants that expect to retire by 2039 would face a less stringent standard but still would have to capture some emissions. Coal plants that are set to retire by 2032 would not be subject to the new rules.

Rich Nolan, president and CEO of the National Mining Association, said that through the latest rules, “the EPA is systematically dismantling the reliability of the U.S. electric grid.’'

He accused Biden, Regan and other officials of “ignoring our energy reality and forcing the closure of well-operating coal plants that repeatedly come to the rescue during times of peak demand. The repercussions of this reckless plan will be felt across the country by all Americans.”

Regan denied that the rules were aimed at shutting down the coal sector, but he acknowledged in proposing the power plant rule last year that, “We will see some coal retirements.”

The proposal relies on technologies to limit carbon pollution that the industry itself has said are viable and available, Regan said. “Multiple power companies have indicated that (carbon capture and storage) is a viable technology for the power sector today, and they are currently pursuing those CCS projects,’' he told reporters Wednesday.

Coal provided about 16% of U.S. electricity last year, down from about 45% in 2010. Natural gas provides about 43% of U.S. electricity, with the remainder from nuclear energy and renewables such as wind, solar and hydropower.

Dan Brouillette, president and CEO of of the Edison Electric Institute, which represents U.S. investor-owned electric companies, said he was “disappointed” that the EPA “did not address the concerns we raised about carbon capture and storage.’' While promising, the technology “is not yet ready for full-scale, economy-wide deployment,’' said Brouillette, who served as energy secretary in President Donald Trump’s administration.

The rules initially included steps to curb emissions from existing natural gas plants, but Regan delayed that aspect of the rules until at least next year after some moderate Democrats and the gas industry warned that the plan could affect grid reliability. Regan also said he wanted to address complaints from environmental justice groups that the earlier plan allowed too much toxic air pollution from gas-fired plants near low-income and minority neighborhoods.

Even so, the rules issued Thursday complete “a historic grand slam” of major actions by the Biden administration to reduce carbon pollution, said David Doniger, a climate and clean energy expert at the Natural Resources Defense Council. The first and most important action was passage of the 2022 climate law, officially known as the Inflation Reduction Act, he said, followed by separate EPA rules targeting tailpipe emissions from cars and trucks and methane emissions from oil and gas drilling.

Together, the climate law and the suite of EPA rules “are the biggest reductions in carbon pollution we’ve ever made and will put the country on the pathway to zero out carbon emissions,’' Doniger said.

The nation still faces challenges in eliminating carbon from transportation, heavy industry and more, said Abigail Dillen, president of the environmental group Earthjustice, “but we can’t make progress on any of it without cleaning up the power plants.’'

Jim Matheson, CEO of the National Rural Electric Cooperative Association, called the EPA rule “unlawful, unrealistic and unachievable,” adding that it faced a certain court challenge. The rule disregards the Supreme Court’s 2022 decision that limited the agency’s ability to regulate carbon pollution under the Clean Air Act , Matheson said.

“This barrage of new EPA rules ignores our nation’s ongoing electric reliability challenges and is the wrong approach at a critical time for our nation’s energy future,” said Matheson, whose association represents 900 local electric cooperatives across the country.

The EPA rules would not mandate use of equipment to capture and store carbon emissions — a technology that is expensive and still being developed. Instead, the agency would set caps on carbon dioxide pollution that plant operators would have to meet. Some natural gas plants could start blending gas with other fuel sources that do not emit carbon, although specific actions would be left to the industry.

Still, the regulation is expected to lead to greater use of carbon capture equipment. Only a handful of projects are operating in the country despite years of research.

The EPA also tightened rules aimed at reducing wastewater pollution from coal-fired power plants and preventing harm from toxic pits of coal ash, a waste byproduct of burning coal.

Coal ash contains cancer-causing substances like arsenic and mercury that can leach into the ground, drinking water and nearby rivers and streams, harming people and killing fish. The waste is commonly stored in ponds near power plants. The EPA issued rules in 2015 to regulate active and new ponds at operating facilities, seven years after a disaster in Kingston, Tennessee, that flooded two rivers with toxic waste and destroyed property.

Environmental groups challenged that rule, arguing it left a large amount of coal ash waste unregulated by the federal government. The rule issued Thursday forces owners to safely close inactive coal ash ponds and clean up contamination.

A separate rule will reduce toxic wastewater pollution by 660 million pounds annually, according to federal officials. It’s a reversal of the Republican Trump administration’s push to loosen coal plant wastewater standards.

The Biden rule comes nearly a decade after former President Barack Obama first tried to set limits on carbon pollution from U.S. power plants. His 2015 Clean Power Plan was blocked by the Supreme Court and later rolled back by Trump. Trump’s plan was also blocked by a federal court .

Associated Press writer Michael Phillis in St. Louis contributed to this story.

Follow the AP’s coverage of the EPA at https://apnews.com/hub/us-environmental-protection-agency .

Saudi crown prince threatened ‘major’ economic pain on U.S. amid oil feud

The discord leaks | after president biden vowed to impose ‘consequences’ on saudi arabia for slashing oil production last year, mohammed bin salman privately threatened to sever ties and retaliate economically, according to a classified u.s. intelligence document..

Last fall, President Biden vowed to impose “consequences” on Saudi Arabia for its decision to slash oil production amid high energy prices and fast-approaching elections in the United States.

In public, the Saudi government defended its actions politely via diplomatic statements. But in private, Crown Prince Mohammed bin Salman threatened to fundamentally alter the decades-old U.S.-Saudi relationship and impose significant economic costs on the United States if it retaliated against the oil cuts, according to a classified document obtained by The Washington Post.

The crown prince claimed “he will not deal with the U.S. administration anymore,” the document says, promising “major economic consequences for Washington.”

2024 Ageing Report. Economic and Budgetary Projections for the EU Member States (2022-2070)

Description.

This report presents the projections showing the economic and budgetary impact of an ageing population over the long term.

Information and identifiers

Institutional Paper 279. April 2024. Brussels. PDF. 358pp. Tab. Graph. Bibliogr. Free.

KC-BC-24-006-EN-N ISBN 978-92-68-13780-2 (online) ISSN 2443-8014 (online) doi:10.2765/022983 (online)

JEL classification : J10, J11, J18, J21, J26, I0, O4, H55

European Economy Institutional Papers are important reports analysing the economic situation and economic developments prepared by the European Commission's Directorate-General for Economic and Financial Affairs, which serve to underpin economic policy-making by the European Commission, the Council of the European Union and the European Parliament. Views expressed in unofficial documents do not necessarily represent the views of the European Commission.

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