Week1 macroeconomics

Week1 macroeconomics - Economics 21 Week 1: Discussion...

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Economics 21 Spring 2008 Week 1: Discussion  Section      William Cline’s Lecture, “Correcting the Imbalances in US Economic Growth”, which  he gave at Swarthmore  in March 2003, summarized  at the time every major issue facing  the U.S. Economy, with  the exception  of Social Security and  Medicare.  We can now  add   the sub-prime  mortgage  meltdown,  very high oil prices, and  the probable recession.  Still, Cline’s lecture is a very good  summary  of the structural imbalances in the U.S.  economy, which are still with  us.  Cline also has an uncanny  ability to zoom  in on a  really meaningful equation  without  any extensive reference to underlying  models.  He  then tells you how  to calculate the real world  numbers  that you need  to plug  into these  equations.  The lecture could  have been called “A Back of the Envelope  Guide  to the  U.S. Macroeconomy”      For this week’s discussion  session, begin reading  the Lecture (up to p. 10) and  be  prepared  to answer  the following  questions: 1) On page 1, Cline writes:  I would like to focus on four imbalances and consider how they might be corrected: the imbalances in external accounts; in household saving and fiscal accounts; in the financial asset market; and in the distribution of wages What is the relationship  between  the external accounts, the fiscal accounts, and  
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Week1 macroeconomics - Economics 21 Week 1: Discussion...

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