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Fiscal Stimulus

Fiscal Stimulus
Order Description
Aim
This written assignment is aimed at helping you develop your ability to apply particular perspectives and abstract ideas to concrete, real-world
situations, and to express yourself in clear, thoughtful prose. The application of abstractions to particular concrete scenarios is one of the most
difficult challenges for many undergraduate students, and some students also find it difficult to construct an engaging written narrative that is
appropriate for an intellectually-inclined audience.
Successfully adopting a particular conceptual frame requires a good understanding of the dimensions, limits, strengths and weaknesses of that frame.
This means that preparing your written assignments will also help you to develop in-depth knowledge of particular perspectives explored in this
course, and to hone your skills in critical analysis.
What to do
In your assignment, you will apply the conceptual frame of TWO different economic thinkers to ONE of the following topics:
1. Fiscal Stimulus: In December quarter 2007 the US economy entered into a recession that was to last until the June quarter 2009. During this period
the unemployment rate peaked at 10 per cent and real GDP fell by 5.1 per cent. In response to fears that the recovery from the recession would be
slow, US President Barrack Obama announced the American Recovery and Reinvestment Act of 2009 which made US$787 billion worth of fiscal stimulus
payments available to US households and firms. The primary objective of the stimulus was to reduce the unemployment rate by creating more jobs. The
Act included direct spending on infrastructure, education, health and energy projects. The stimulus contained provisions to expand unemployment
benefits (the period of time that a person could claim unemployment benefits for was increased) and social security payments.
Choose two economic thinkers to critically analyse the decision of the US government to provide a fiscal stimulus. Would they be for or against it?
Why? Are there other policies they would rather pursue to tackle the recession in the US? What do they believe the proper role of government is with
respect to the business cycle? Do they agree or disagree?
I chose the following thinkers.
First Thinker – John Maynard Keynes
Second Thinker – Friedrich Hayek
The paper is a compare and contrast essay, where the views of both economists are analysed and evaluated. The best way to start this type of essay is
to create an independent list of each economist?s views on the topic and then to look for similarities and differences in their views. Once the key
similarities and differences are found, a narrative can be structured around why the economists agree or disagree about the topic. It is expected
that you will conduct some outside research on the topic and on your chosen economic thinkers to supplement the information you have gained from
class readings and lectures. Please include a reference list with your paper. The quality of your sources will be a factor in assigning marks.
The essay should be between 6 and 8 pages, and should attempt to balance the amount of information presented on each economist?s view. One suitable
structure for the paper is to write a separate section for each economist summarizing their views, and then compare and contrast their views in a new
section. But, there are many suitable ways to structure the essay. Try to draw upon what you learned from the first writing assignment to create
positions for these now dead economists on these current issues.
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