October 29, 1929, or more commonly dubbed as ‘Black Tuesday’ took the entire United States into jeopardy as the stock market witnessed an unusual blow. This was followed by a disrupted output and higher unemployment rates which forced the policymakers to implement and execute several policies that might bring the situation under control. They could already see the nation being swallowed by economic depression and took every possible measure to stop any further rupture. Such a financial crisis is a great example of the prevailing contemporary issues which dominate the debates and policy making.
You’re probably here because you are searching for some references or tips for your economics assignments related to a similar topic, right? We generally receive several queries from students who need help with writing assignments on a range of contemporary economic issues and problems. In this blog, our experts who provide economics assignment help will show you some tips for writing such economics assignments that will enable you to turn in quality work. To assist you better, we have included an economics assignment sample as well.
Let’s first look at the sample below and then begin with some of the main topics for discussion.
It doesn’t take a GFC or Global Finance Crisis to spread to the rest of the world through linkages once it emerges within a nation. The impacts are devastating and so are the losses faced by households, economies, and the Government. If we talk specifically about the Great Depression in the 1930s, then the scale of the impact is gigantic; the figures are over a million and the recovery rate is the slowest.
Mortgage-Backed Security or MBS is a form of a loan package that consists of several thousands of mortgage loans that vary in quality. Moneylenders started selling these loans in large volumes because of a favourable economic environment and increased competition.
Even today, economists still debate the following two major factors that cause GFC and their severity.
Investors across the United States started borrowing more and more money to purchase assets such as a house. This certainly magnifies the profits but it also increases the losses at the same time. As a result, with the drastic fall in the house prices, the investors incurred large losses because they had over-borrowed large amounts of money that they had to repay. In fact, some of the assets were impossible to sell within a short period.
The economy noticed a lax in the regulation of Mortgage-backed security products that were sold by the lenders in vast volumes to the investors. Thousands of individual borrowers took loans so large that it was very unlikely to repay them. Moreover, many instances of fraud became common where the lenders did not estimate the borrower’s income accurately and even false-promised investors on account of the loans they were selling. By the time the central banks recognised the extent to which these loans are sold, the crisis had already made its impact on the economy.
PKE is an extension of the arguments put forward by John Maynard and Michal Kalecki which debates effective demand as a key determinant of an economy’s performance. This model rejects and regards economics concepts in modern economies. For example, it rejects the rate of interest and rate of unemployment and regards the price of liquidity and future consumption rates. Following the Great Depression, the worldwide interest of policymakers grew in learning more about post-Keynesian economics. It inspired and helped them in framing new policies that could alleviate an economy of its suffering caused by such large recessions. However, these policies were only effective in developed countries and were occasionally implemented in developing nations.
The paradox of Thrift states that even if all the individuals increase their savings simultaneously, the total AS or aggregate savings will remain unchanged because aggregate demand and output have declined.
Here are some excellent reading materials to help you understand more about post-Keynesian Economics:
Stockhammer, E. (2017). ‘Post-Keynesian economics’, chapter 1 in Fischer, L., Hasell, J., Proctor, J.C., Uwakwe, D., Perkins, Z.W., Watson, C. (eds), Rethinking economics: An introduction to pluralist economics. London: Routledge.
Hein, E. (2017). ‘Post-Keynesian macroeconomics since the mid-1990s: Main developments’, European Journal of Economics and Economic Policies: Intervention, 14 (2), pp.131-172.
Blecker, R.A. (2016). ‘Wage-led versus profit-led demand regimes: the long and the short of it’, Review of Keynesian Economics, 4 (4), pp. 373-390.
We’re glad that you have read till here. Do read the peer-reviewed journals and articles listed above. Other than the concepts discussed in this blog, there are more that you need to understand, for example, money multiplies, exchange rate violations, monetary and fiscal policy, and economic policymaking. If at any point in time you need help with these concepts or a similar economics assignment, just let us know. Stay tuned for more free tips for completing economics assignments! Experts at My Assignment Services will resolve all your doubts related to the subject. To know more about our microeconomics assignment help, simply fill the form to get a callback from our customer support team today.
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