Money, Stabilization And Growth Course Work Examples

Published: 2021-06-24 18:20:04
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2008 Nobel Prize winner, Paul Krugman, published a new book “End this depression now” in which he viewed prompt evolution of the economy to be obtained through government spending. As a result, the economy of any given country should not worry about the deficit it is causing to the country as long as the economy is increasing. It is worth noting that planning is an essential part of any successful undertaking. Therefore, the spending of the government should be a planned one.

However, according to Paul, one ought not to worry about the spending. Therefore, the government should spend so as to push the economy into a fast recovery. This implies that proper planning would not have been achieved through this fast recovery. Moreover, with the increase in spending, the economy grows. This gives hope to citizens of the country. Unfortunately, with an increase in government spending, inflation usually arises. As a result, measures have to be taken to curb the inflation from crippling the economy.

According to Paul Krugman, when inflation increases, austerity measures are to be set. These measures aid in the balancing of the budget and reduction of the deficit. It is worth noting that these austerity measures will affect the same citizens of the country, translating to false hopes that the citizens had. This is because the austerity measure, more often than not, affect the people of the country.


This is because these measures are applied in terms of increased taxes, the cut of spending, or a mixture of the two. Notably, these will affect the people of the country translating to an economic crisis.

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