How Can We Combat Recession Problem?
Khandaker Ahmed
Introduction:
Recession is a challenging economic
problem natural with free enterprise economic system like in
Task:
You will be divided into 2
teams. One team will play the roles of
the Federal Reserve Board that is in charge of formulating monetary policies.
Other team will conceive themselves to be the Govt. authority in Washington
(including Congressional Budget Committee) that is responsible for shaping
fiscal policies. Both of your teams will begin with a common task of gaining an
understanding of the causes and symptoms of recession or economic sluggishness
as well as general nature and effectiveness of monetary and fiscal policies in
fighting recession problem. Thereafter
you will start working as teams in your respective fields: one team
specializing in fiscal policies and the other in monetary ones. Historically, different governments have
tried monetary and fiscal instruments in different ways and with varying
emphasis (example: demand side economics of FDR, supply side economics of
Regan), but all of them left much or at least some to be desired. It will,
therefore, be a serious business for both of your teams to develop a set of
well-coordinated fiscal and monetary policies that you think will work better
for the economy.
Process:
The above assignment will involve
the following processes in order to ensure systematic progress toward its
successful completion:
1.
Define and describe
the stated problem, that is, recession
2.
Gather evidence and
supportive data for this problem
3.
Identify the causes
of problem (recession or slow business activity)
4.
Evaluate present
and previous policies such as the New Deal of FDR, Reaganomics etc.
5.
Develop a better
and more effective set of fiscal and monetary policies
6.
Select the best policy,
fiscal or monetary, for your problem
Resources:
You will study basic economic
books, encyclopedias etc. to build up your relevant economic concepts like
variety of instruments of monetary policy (quantity theory of money, reserve
ratio, open market operation, interest rate etc.), impacts of their
manipulation by the Federal Reserve Board, nature of various fiscal policy
apparatus including deficit budgeting and taxation etc. and how their
adjustments affect the economy, historical perspective of their application by
different governments etc.
Once you have developed the basic
economic concepts cited above, you will enter the phase of comparative and
evaluative study for critical analysis.
In this stage you will expand sources of reading covering web search,
review report of magazine etc.
Research Websites:
Evaluation:
Your task will be evaluated on the
basis of the following:
1.
The quality and method of research followed in
adopting proposed policies
2.
The prospect of feasibility and relative effectiveness
of these policies
3.
The quality of oral reports presented by both teams,
the validity of arguments and assertiveness of defense in favor of your
respective policies
Conclusion:
Recession has been a recurring as
well as complex economic problem with far-reaching social, political, economic and
ethical implications. Historically,
there have been no policy packages that can claim to be an all-right answer to
the problem. The proposed undertaking
toward formulating appropriate policies will not only enhance your
understanding about the dynamics of the problem but is also expected to provide
an alternative policy prescriptions which may be significant for further
researches, if not for practical implementation.