Fiscal and Monetary Policy

Paper Summary:

The paper discusses how a country's fiscal and monetary policy measure the position of the economy and are thus a reflection of the corrective policies taken. The paper contends that more important is the psychology of the nation as reflected in its political choices. The paper discusses the United States' GDP growth, inflation, unemployment, federal funds rate and budget deficit. The paper concludes that there are some matters on which experts have different opinions and it is difficult to know the right answer for every financial problem.

Outline:
Introduction
Analysis
Conclusion

From the Paper:

"Let us look at the situation in US during the last quarter and that showed a decline even more than the expectations of the pessimists. The growth during that quarter was about 1.1 percent and this figure was less than half the forecast and nearly a quarter of 4.1 percent achieved in the previous quarter. The official figures will not come out till the end of the month since there are adjustments required for the hurricane. This is the second time the drop took place since the recovery in the economy started in the last quarter of 2001. The drop is very sharp during the period of a quarter and the reasons are probably not confined to the quarter itself."

Sample of Sources Used:

• Baum, Caroline. (January 30, 2006) "The Worst News Wasn't Even in the GDP Report" Retrieved from http://quote.bloomberg.com/apps/news?pid=10000039&cid=baum&sid=aAoEn3eaXC6U Accessed March 19, 2006
• Espasar, Antoni. (26 January, 2006) "Monetary Policy and Expectations on Inflation and Growth in the US in 2006" Macroeconomic and Inflation Analysis. Bulletin no. 136. Retrieved from http://www.uc3m.es/uc3m/inst/FL/boletin/pdf/completos/ExpectInflationEEUU-EN.pdf Accessed March 19, 2006
• Ferguson, Niall. (2004) "Colossus: The Price of America's Empire" Penguin.
• McElroy, Mary. (2001) "Resistance to Exercise: a Social Analysis of Inactivity" Human Kinetics.
• Morici, Peter. (1997) "The Trade Deficit: Where Does It Come From and What Does It Do?" Retrieved from http://www.smith.umd.edu/faculty/pmorici/The%20Trade%20Deficit--Where%20Does%20It%20Come%20from%20and%20What%20Does%20It%20Do.doc. Accessed March 19, 2006

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