Macroeconomics articles

Summary

Low inflation has been prevalent across the world through 2017.  The article discusses low inflation across most of the developed world has been part of a vicious cycle caused by low growth and onerous debt burdens.  As a result, major central have been struggling to lift inflation to expected annual rate.  Through ought the world, Consumer prices have remained unchanged due to rising costs.  According to the article, the worldwide glut of steel plants, oil wells, and eager would-be workers are important factors that have contributed to the low inflation.  Hence, the view that the past United States presidential elections would solve the problem is wrong.

Opinion

I agree with the article. There are various underlying global dynamics that influence the directions of prices.  A combination of cheaper oil prices and a strong dollar could have suppressed inflation across many economies.  Gasoline prices have experienced a drop significantly compared to last year’s prices. Additionally, economic growth struggles may have led to the increase in the value of the dollar, hence making imports cheaper. Another factor is that the worldwide supply of aluminum and steel may be higher that the demand for these commodities. Another factor is that integration of highly populous nations such as India and China into the world economy continues rapidly, resulting in a glut of workers.

The article in relation to the text

The article provides insights into the causes of low inflation.  This is relevant to the text due to the implication on growth, employment, and other macroeconomic factors.  Low inflation has benefits and negative impacts.  The first benefit is that stable firms gain more confidence to invest. This may lead to high rates of economic growth in future.   The downside is that a country’s goods may become uncompetitive.

Article 2

Summary

The article discusses the policies that would bring into equilibrium France’s aggregate demand and aggregate supply. According the article, France suffers from demand side problems.  The problem is not as contradictory as it sounds. A country can experience structural issues that limit its potential growth and still experience shortage of demand.  Potential growth of an economy goes hand in hand with the speed at which the economy can grow.  Other factors such as productivity gains, demographics, population output and changes in the size of the working age population also determine aggregate demand and supply.  While France is not the only economy hit by this problem, specific developments, such as lack of productive investment, high structural unemployment  have  aggravate the trend. Measures that impact on these factors can increase the potential growth of a country.  As a result, international institutions have issued a range of recommendations to implement structural reforms with the ability to stimulate supply and improve competitiveness

Opinion

The supply-side difficulties experienced by the French economy are well-documented.  France has experienced sluggish growth in recent times. However, it has been discovered that constraints hindering production is a shortfall of demand. The assessment is in line with the low level of core inflation which have averaged year-on-year. This suggests that France’s economy has some underemployed resources. Fiscal measures can stimulate demand, lift above the potential growth rate and generate more vigorous growth.

The article about the text

Aggregate demand is an important topic in the study of economics.  When the demand is slow, measures must be taken to improve consumption and investments. 

 References

Irwin Neil (2017, April 26). The Low-Inflation World May Be Sticking Around Longer Than Expected. The New York Times.  

Mercier Thibault (2017, March 24). France Supply and demand. BNP PARIBUS. 

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in urgent custom research papers. If you need a similar paper you can place your order from nursing school papers services.