(Macro) Episode 26: Fiscal Policy

The previous videos addressed the macroeconomic goals; this video addresses the idea of fiscal policy (government spending and taxation) as a possible way to target the goals.

Category:

Education

Tags:

• economics
• fiscal
• spending
• taxation
• government
• macroeconomics

[Kamerun1256]

Keynesianism is not for get votes

[mjmfoodie]

@Kamerun1256 Perhaps ypu misunderstand - I did not say that Keynesian policy was to get votes; I said that EXPANSIONARY policy (of any kind) is more likely to get votes than contractionary (and therefore the more desirable option if you want to get re-elected). There is indeed empirical evidence of a political business cycle effect in and immediately following election years.

[hackingtime88]

whats kind of effect does this have on the money market, (money supply and money demand)?

i am gonna guess that in an expansionary fiscal policy it will increase MD

[mjmfoodie]

@hackingtime88 True - money supply is independent of this, but especially when the government needs to borrow to cover any deficit spending, it certainly adds to the money demand.

[RukussMC]

Thumbs up if you're here for IB Economics.

[Pix3617]

Your speech is to fast. Slow Down Please! :)

[N330AA]

Well i've learnt today that I'm definitely a classical economist

[seadragon36]

I love the slides, esp the PacMan graphics for consumption. It is amazing that this is all hand drawn! Thank you for the thoughtfulness of the images that help me remember the concepts & details, and for the frequent use of graphs like the AS/AD -- repetition definitely helps! My professor observed that monetary policy is more effective at controlling inflation, and fiscal at controlling recessions. What do you think?

[seadragon36]

Thank you -- this is very helpful, esp having graphics to support the audio. Also helpful having the AS-AD graphs. It's sad that I also agree that this 4.5-min video is more helpful than my 3-hr econ class. :-P

[Omroon]

Here is my problem with the video: Assuming that prices of factors of production are somewhat flexible (or completly flexible) If AD is boosted trough government deficits, there is a general increase of prices, including prices of production factors. That means that any boost in AD would imply a reduction of AS, not resulting in real economic growth and delaying any possible correction in the free market. So the AD would increase with government deficits but only at expense of AS.

[ronnierascal12]

very good for econ4 AQA exam! you on twitter?

[MyMrwrestling]

@bourneyesterdayi did u do the ocr economics exam? on 27/05/11

[bourneyesterdayi]

I learn more in the 4 minutes and 35 seconds of this youtube video than I do in my one hour and 35 minute class at college...