Topic 14: My Future as an Economist

Personally for me, this semester taking economics has been pretty useful for me. Ever since the first chapter, I've felt that this class is a way of summarizing the way in which money and resources flow around us. In regards to the material, I've always thought economics is something you learn subconsciously while living on earth and part of the ever-flowing market, so taking the class is basically just a way of defining the terms and giving each phenomenon a name. The parts on supply and demand were really interesting, but like mentioned above, it is something which one can infer. For example, the fact that technology affects supply is something which is quite obvious. The textbook is just summarizing the different factors for us. Nevertheless, this material has broadened my view of economics and the factors affecting supply and demand. I believe this is important because part of the process of critical thinking is having a wide spectrum of cause and effects.

I do believe this material is interesting, apart from the parts of the book where it is only focusing on the United States. However, the parts on taxation, as well as speculation on the economy in regards to changes as a result of the factors which alter supply and demand, will come in very useful for me. If I were to follow on with economics, I would definitely take macroeconomics. As a person who will most likely major in political science, I believe that the study of the economy is extremely vital, as money is perhaps one of the biggest motivators of political actions. I like looking at the big picture of the world as a whole, and not study individual financing. I can compare this course with psychology, because psychology is also something which people are familiar with, but are just unaware of the terminology. For example, the confirmation bias learned in psychology, is a common way for people to be biased, but we are just unaware we are doing so. So like psychology, economics is a way for us to better teach us both our conscious and subconscious actions and giving them names. 

Topic 13: Supply or Demand?

Demand-side policies are those which aim to provide incentives to increase aggregate demand. This may include tax reductions, decrease in interest rates, etc. which either increase consumers’ disposable incomes or encourage spending rather than saving. Supply-side policies are those which aim to provide incentives to increase aggregate supply. This includes deregulation, tax reductions for companies, etc. I believe that demand-side policies are more effective. These policies directly impact the buyers, who are keeping the economy flowing. Supply-side economies, although supplying a lot of goods and services, would ultimately be useless if the consumers don’t have the purchase power. Moreover, supply-side policies, which may grant more deregulation, would sometimes cause wage inequality, monopolies, or job insecurity. These are bad for the economy. Also, arguably, for both types of policies, this decreases government revenue as taxes are cut. However, many may also argue that supply-side policies which encourage production actually generates economic growth, or even an actual increase in government revenue as production rates increase. It also allows for more efficient and non-interference style of market. For demand-side policies, it includes a lot of government intervention and specific allocation of government resources to benefit the society. The decrease of taxes, though “taxing” on the government, is beneficial to people as it allows them to be able to spend more money, allowing suppliers to provide more, and therefore stimulate the economy. The same could be said with decreased interest rates which urges people to spend, and therefore, again, stimulate the economy. Therefore, this benefits both the demand and supply side. However, many also argue that this cannot help with long term aggregate demand, and can only help for a short while. This also costs a lot of money for the government. 

Topic 12: Role of the Government

I think the government should be allowed to interfere with the free market. However, although this may seem idealistic, I believe that the governments should of course try to be   manipulating the economies for the sake of putting the people’s best interest in mind. An example of this may be the government’s use of taxation on harmful items such as cigarettes, in an effort to keep the people healthy. However, the everlasting presence of corruption has many times undermined the many of the good intents of taxation. Many other factors also complicate the issue. 

Margaret Thatcher is a prominent politician in the United Kingdom’s history. However, her role has been a controversial one. She had advocated for less governmental influence, which strongly contrasted the previous notion of collectivism which gave form to UK’s post-WWII economy. Her ideology was that there was a natural rate of unemployment which shouldn’t be tampered with. Under her term, inflation and taxation went down. However, homelessness and unemployment went up. This is also an important argument for the government’s role in the economy. Many times, by relying too much on the government, we end up with negative impacts in the economy, and giving way to too much economic liberalization also leads to problems, as demonstrated in Thatcher’s term.

In conclusion, I believe that the government should be able to interfere, but only with a limited amount of jurisdiction.

Topic 11: Unemployment

Unemployment encompasses many consequences. Some jobs are affected more than others. Jobs that are more resistant to unemployment would be jobs which are necessary to the survival of a society. This includes farmers part of a non-basic, local economy, who produce the food needed to the local people. Without these people, there would be no food. Another example could be doctors with degrees. These people still need to be present in the society. Thus, people working on the necessities would be least likely to get fired. Also, people in government-provided programs would also be protected. For example, people working on infrastructural projects. These people are employed by the government to get the economy circulating. Thus, instead of firing people from this field, the government would be employing more, to combat economic downturns. People in the army also probably wouldn’t get fired. They are necessary to the defense of a country (unless you are Costa Rica), and is also government-sponsored in most countries.

Jobs that are less resistant include jobs that are for leisurely purposes. For example, less people would be willing to go to spas or massages if the economy was bad. Thus, these people would most likely get laid-off. This is due to people trying to cut expenses. Luxury goods production and production of more high-end products are therefore also affected. For example, people would be less likely to buy cars, and would be more willing to want to fix a car instead of buy a new one. Also, people in the service sector would be affected to. People would rather tend to themselves to save costs, than have other people do it for them, and pay that extra expense.

I have two career paths. The first is a psychologist. Although one may assume that psychology consulting sessions are a luxury, because they are quite expensive, this may not be the case. Clinical psychologists are probably especially important during this economic downturn. People get depressed from the bad economy, and many may require professional help. My second career choice is to work in the government. I’d like to work in the international government. The flow and functioning of the international community is quite essential to world leaders, so the presence of such important officials are probably quite stable. When picking these two career paths, I did not think much about the problem of unemployment. Mainly, I thought about the salary I would earn. But mostly, I’d choose these two paths because I enjoy studying the two subjects.