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Business Cycle & Economic Growth

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1) Think about different measures of current economic performance and business cycles and discuss what state of the business cycle our economy is currently in. Support your opinion with data.

2) What do you think are the causes of the current state of the economy?

3) What role do financial markets and institutions play in U.S economic growth?

4) Watch this interview with the economist Robert Reich on Democracy Now, http://www.democracynow.org/2013/9/13/inequality_for_all_robert_reich_warns

What role does income distribution play in U.S. economic growth? What should be done to make income distribution more equal? Should there be a living wage? Do you agree or disagree with Professor Reich's view on income inequality? Why?

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Solution Summary

A review of the economy, its phase, and how income distribution and financial markets influence it.

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1) Think about different measures of current economic performance and business cycles and discuss what state of the business cycle our economy is currently in. Support your opinion with data.

The economy is in a growing phase after the recession. Job numbers continue to improve with the economy adding 139,000 new jobs in February. The dollar continues to gain, despite trouble in places like the Ukraine. Production is up and retail sales data from January shows improvement. While the world is still shaky from the recession and its aftermath, the U.S. economy continues its slow but forward progress. Key segments also continue to improve, while issues in Europe and Asia hold those two regions down.

Jobs are only improving at a modest rate. Private sector jobs are gaining, but slowly. This modest job growth prevents consumer spending and increased production within the country, because the economy cannot sustain on minimal job growth. Production is on track to continue increasing, but figures like the one from January, 2014 show that there are occasional drops. Production dropped from 3.7% in Dec, 2013 to 2.9% in January, 2014. Such movements show that the economy is still not in full growth mode nor ...

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