7 Discussion

7 Discussion Forum. 500 words

Discussion assignments will be graded based upon the criteria and rubric specified in the Syllabus.

For this Discussion Question, complete the following.

1.  Read the first 13 pages of the attached paper which discusses the effect of government intervention on recessions.

2. Locate two JOURNAL articles which discuss this topic further. You need to focus on the Abstract, Introduction, Results, and Conclusion. For our purposes, you are not expected to fully understand the Data and Methodology.

3. Summarize these journal articles. Please use your own words. No copy-and-paste. Cite your sources.

4. you will need to reply to the posts of two of your peers. Your replies must focus on increasing knowledge of the class and must advance the discussion further. Simply affirming your peers does not count as a substantive reply.

Reply to post 1: 200 words

A recession from an external shock is mostly unavoidable because we do not usually see it coming we can notice them. As per the view, this overextension leads to a contraction where businesses must pull back and some workers become unemployed. In order to give an equal and opposite extent to which other forces seek to destroy the entire government recessions. Based on the wealthy and mega-corporations that have been performed are the ones interfering. The government should provide whatever relief is necessary to maintain the health, safety and well being of the populace (De Vogli, & Owusu, 2015).

If it has been necessary the government should be prepared to take away from the business community, any power they may have. As soon as that happened all the foreign investment came right back in and everything went back to being peachy. Without the over the excitement of the expansion, there was not be a recession economy gets things figured out again and starts to grow all over again. If it ever becomes apparent that has the business community is responsible for the recession situation. In the present society, the government should have been considering the one running element in the economy. Before people have to start going without food or shelter the government should get involved (Dunkelberg & et al., 2010).

In order to control or relieve the situation when it becomes apparent that the business community is profiting from the recession. Moreover, the recession unforeseen to realize that they made a mistake but there was almost nothing that needed to be done for the external market. Here, it can maintain these terms and policies during the process of recession is the best option to determine the outcomes. In order to evaluate government consumption until the demand meets the present level of production can be explained. As per the effects on government intervention, these consequences have been taken as inflation is a common thing. Basically, it has to examine the upward shift to these options that will process out all the possibilities of outcomes that will clearly demonstrate (Mattei & et al., 2014).

Reply to Post 2:  200 Words


The present issue is very important for the government for whether to intervene fiscally over the recession. Shocks are the various reasons for the generation of recessions. It is very important to understand how the recession is generated. A recession starts only when the growth rates become negative. The steady-state will change sometimes and the most reason is that due to the change in some of the fundamental stock. These results are projected on the change in the steady-state downwards. The steady-state at this point will befall to change its consumption state. This kind of recession is not able to explain many answers to many questions (De Vogli & et al., 2015).


The movement of the posterior steady state the efficiency of the Parteo is held.  So this will not raise unemployment. Some other mechanisms state that even if the households can manage in the jump of the consumption even when the steady-state comes there change into downwards. The risk is to be minimized and the consumption should be smooth. The highest expected utility is not observed because of this kind of consumption jump as it is unsmooth which may not be optimal for the households because of this kind of discontinuous consumption. This is the reason for not utilizing the posterior saddle path and for choosing the Nash equilibrium of a Pareto inefficient path. This path is considered as the optimal path (Dunkelberg & et al., 2010).


In Pareto inefficient at the stage of recession, the unemployment will be very high in this situation and this stays high. Fundamental stocks needed to be considered as a meaningful way to stay the stocks on the parameters deeply. Sometimes an upward shock in represented as a fundamental way of stock on the basics of the rate of the time preference. Depending upon this kind of shock the government needed to take and consider three kinds of options.  The first one is that we should not intervene and the second one is that the government should increase the consumptions and the third one is that the government should cut the taxes or should minimize the taxes. All the situations arise should be examined and the consequences because of these options should be understood. Only then the best option is known and can be utilized effectively (Mattei & et al., 2014).


There should be an increase in consumption until the requirement meets the productivity at the time of recession may lead to the best option to save the situation. The taxes should not be increased at the time of recession which may lead to many other issues. Only taxes can be increased in the future. All the negative effects of the fundamental shock should be minimized. RTP is a very important one that plays a key role in economic activates. The unemployment rates are increased in a very high range. This unemployment will stay constant for a very long time. This should be minimized with time and this can be only done on the basics of fulfilling the gap demand by only increasing the consumption which is the step needed to take by the government (De Vogli & et al., 2015).

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