Topic 14: My Future as an Economist

I used to think that economy is boring: who cares about the theories when you pay the prices? But as the materials we covered grow, I gradually realize that purchasing an item is not only simply paying the money. It involves a more complicated process of manufacturing, taxing, and the flowing of the money. The basic concepts of economy are not only related with other subject, but also appeared in our daily life. Buying an item from a store might be a simple decision for a consumer. Yet when the decisions of all consumers gather, it brings a huge impact on the demand, increases the economic growth, and thus makes the government to do actions. At the beginning of the course we were introduced to some fundamental ideas, however, as the class went further, we received more and more complicated information. Although in the college I am not aiming for an economic major, learning high school economy definitely benefits at a certain degree. I would prefer to develop more detailed concepts in microeconomic since it relates more to personal economic application than macroeconomic does. Even I will not be an economic major, knowing how the tax system works is essential, after all.

Topic 13: Supply or Demand?

I prefer the government to intervene and stabilize the economy by using Demand-side policies.  Demand-side policy focuses on government intervention to shift aggregate demand in or out depending on whether unemployment or inflation is the most pressing issue. The government can adjust the aggregate demand by either change the tax rate or changing government spending. I think using demand-side policy is more effective in keeping the economy stable because what matters the most is what’s the consumers thinking about (since they are the ones who pay the money). Government can decrease the tax rate in order to increase the demand for purchasing. The government can also increase its spending to stimulate the demanding. For example, in the 1930s depression, President Roosevelt increased the government spending for constructing infrastructure thus provides job opportunities for civilians. In the end, it showed that it did work. Meanwhile, demand-side policies have their weakness: time lags. Demand-side policies are useful for getting out of a recession, but by the time the government is able to determine where the country's economy is located, it is too late to fix things. Congress is too slow to act. Government policies often come too late and it can cause inflation.

Topic 12: Role of the Government

When the term liberalism first introduced to Western economics, many Western countries adopted this idea and became what they are now--strong countries. I think government indeed should believe in market, putting their hands out of the economy. Their role is only limited to keeping people safe, defending the country's borders, and providing a fertile environment for markets. With the hand of government interference “removed from markets, the invisible force of supply and demand can work out the most efficient patterns of production, exchange, and consumption” (Goldstein & Pevehouse 286), prosperity would be brought to people. One recent example of government interference causing inefficiency is the Taiwanese taxation of capital gains on securities. The government put tax onto the stocks, so when stock increase its value to certain points, stockholder have to pay the tax. The government set this system is primarily for “social justice”, which wealthier people have to afford more tax. Yet, it turns out that people are discouraged to participate in economic activities (since they have to pay more money) and the government can’t earn the revenue from this system because everyone will sell their stock before it cross over the set point. As a result, the best way for government to deal with economy is leave it along.

Topic 11: Unemployment

Jobs that are more resistant to unemployment are the ones that the society needs. Careers such as doctors, cooks, engineers…etc. are the ones people need. People would always get sick, would always need food, and would always want more advanced technology. As long as people want to live, the demand exists. Workers in those fields thus are hard to be replaced. Oppositely, jobs are less resistant to unemployment are the ones that don’t require skills and easy to be replaced. Since everyone can do it, the employer can be relatively easier to find cheaper worker who wants to do the job. As a result there is a higher chance for the worker to get fired at any time. For my future career I want to be a psychologist. As people’s physical needs are fulfilled, they start to require cares for mental states. Since psychological treatments gradually become the society’s need, psychologists might be more resistant to unemployment. Yet, one concern is that there are more and more people study in this field, which increase the supply and make the competition harder. It raises the potential risk for unemployment. Despite concerning if I can survive by doing that career, interest in studying psychology plays an important role in motivating and pursuing me of being a psychologist.