I feel that the bigger challenge to deal with between these two problems is inflation. Inflation might help temporarily slighten a recessionary gap, but in the long run does not solve the problem. As we learned in class, when the government prints more money than usual inflation occurs. The question in a time of large unemployment is always "why doesnt the government just print more money?" I feel that the answer to this question is that, although the printing of money might lessen the blow of unemployment, it is a false sense of improvement. The unemployment rate might drop for a small period of time, but eventually the economy is going to need to return to an equilibrium. When this happens those people who benefited and kept their jobs because of inflation will either have to go throught the painful process of losing their jobs again or beg the government to simply print more money which in turn just digs the economy into a deeper hole with even higher inflation. I think that unemployment is not something that needs to be solved with the printing of more money but solved with carful step by step planning as to where the government and what the government is going to be spending it's money on. This includes projects that will better the overall standard of living as well as create jobs for the people.
I think that high unemployment is the bigger challenge simply because when individuals are unemployed, they don't have any means of consistently making money. Despite how low costs may be, their buying power stays extremely low. With high inflation, individuals will still be making money and can make choices on what they need most, despite higher costs. This causes each purchase to be more meaningful which can be considered a good thing in our overly-consumer society. Additionally, when unemployment is high, crime rates tend to go up, as individuals resort to breaking the law to get by.
I believe that unemployment is a bigger challenge that we face today. When unemployment is high individuals are being laid off which along with the montary affects, decrease the confidence many American citizens. Inflation only causes the purchasing power to decrease and buying goods and services more difficult. Unemployment includes this extra negative effect on the emotions of people within the country which I believe many economists overlook. Unemployment is a bigger challenge facing countires today, even though inflation is not something to be thrown aside.
Unemployment is a bigger problem. If there is no tax money then government is not getting money from nation which could cause even more problems. Inflation is good so long as it is controlled. 2 to 3% inflation is good. However, Runaway inflation will kill us. But I also think inflation can cause unemployment,because if wages go up with inflation then certain companies will have to lay people off which will cause unemployment. But unemployment as we have today causes zero inflation and then the economy does not grow. Although both are important I believe that people can and do accept that inflation will always exist and it isn't always a bad thing, however, I do not believe everyone is ok and will be ok with unemployment. We know that unemployment will always be there, but those people that are unemployed will always think that it is bad and no fair.
Since inflation can be unpredictable, difficult to interpret, and a cause of unemployment, I think it is a greater challenge than umemployment itself. The Zimbabawe example shows how inflation only leaves a country in worse condition by sending false price signals reulting in less production and output. It also reults in losses for lenders or higher interest rates for borrowers if the inflation is somewhat expected.
Both are equally as threatening because they both become cyclical and spiral out of control. When inflation grows out of hand, it keeps growing faster and faster. When unemployment goes up, less people have jobs, then they don't spend money, which makes more people's jobs disappear because things aren't selling as fast.
I think unemployment is a bigger problem, because there is no tax money being circulated, in the government which in the end could present more problems and eventually lead to inflation. However i do agree that inflation is also a problem when it exceeds 2 to 3%.
Clearly, both inflation and unemployment are intertwined. The short-term Phillips model shows an inverse correlation between inflation and unemployment, when one is high, the other is low. It is hard to say which of the two is a bigger problem, however, between the two, i think that inflation is the bigger problem. Employers want to have the best, and to keep the best they must offer better incentives for an employee to want to work for them rather than a different company. This causes a company to raise the prices of their products or services because they are now spending more money on their employees; raising prices leads to inflation because the government needs to keep up with the rising prices. Therefore, in my opinion, inflation is much easier to come upon rather than unemployment, meaning inflation is the greater challenge because it has to be constantly monitored.
I believe that unemployment is a bigger issue because if one does not have a job, they do not have an income, resulting in this person not being able to spend money. With inflation, people are still receiving an income therefore, able to spend money. Although they have to be wise with what theyc choose to spend their money on.
In my opinion, the bigger challenge faced in the united states is the Unemployment. Unemployment occurs when an individual is actively looking for a job within a period of 4 weeks, a period of time in which no income or experience is gained. The lack of income to support ones self or their family has drmatically contributed the Economic decline in recent years. the problem of unemployment has become world wide, and with the pasage of time its gotten worse. If inflation was the only worry right now in the economy, individuals can still recieve an income and consume in the current market. With no job, this becomes harder. An unemployment rate above 8% is just to high for a government to stable out its problems, debt occurs because familes are not provided for, and a lack of will to purchase "special" goods occur. with all these in mind, inflation could occur, causing a high unemployment to be the bigger issue
Both unemployment and inflation present significant problems to the health of the economy. However, it seems that unemployment is a more severe issue because it has the potential to influence so many other economic elements. As the unemployment rises, people become more and more hesitant to spend their money, and the entire economy faces a downturn. As a result, high unemployment is often indicative of a struggling economy. Inflation is also a serious problem, but in moderation it can help reduce the recessionary gap, and can be moderated by effective economic policy. Therefore, high unemployment is more problematic due to it's powerful implications.
I believe unemployment is the bigger issue. If the unemployment rate rises that means less and less people are not having any type of income or at least a steady income. Inflation definitely does have an impact on the economy however, people can avoid buying certain items. A perfect example is when gas prices increased and people began to carpool, walk, or bike certain places instead of driving. Inflation can be avoided to some extent, but as soon as a person becomes unemployed it is unavoidable. Unemployment causes spendings to lessen which hurts the economy as a whole.
I believe that when looking at these two concepts, unemployment is the bigger problem for the United States. Although inflation affects everyone, unemployment is a more serious problem. As people have stated above, the unemployed have no means of making steady money making it near impossible to live day to day. With inflation, people can still afford to live, although it may be more difficult. Unlike inflation, unemployment can make or break a persons life and not only that their family. People can work around inflation and still find means to live comfortably whereas unemployment can easily ruin someones life and the lives of those they support.
I believe unemployment is a bigger challenge then inflation. People who are unemployed struggle everyday to feed, and house themselves and their family. As stated above, unemployment can ruin a person's life.
In my opinion, inflation poses a greater issue. Simply, printing more money when the country is in need is a false sense of security and does absolutely nothing to solve the true problem. Although, it is temporary fix for unemployment by slowly closing the gap this is only temporary, soon unemployment will rise again leaving us with no option but to raise inflation once again. Devaluating the dollar is not the answer to a country’s over-all well-being. Raising inflation for unemployment creates greater opportunity costs than the pros of it. Of course I believe that unemployment is an issue that should not be ignored I know there are other ways of going about fixing the problem rather than temporarily covering it up. Stopping over-sea production, and start support American business rather than relying on imports will open up jobs and in the long run will be more effective in closing the unemployment gap. Alternatively, there other possibly smaller options, which in the long run will have better long term effects and less of a over-all negative slope for our GDP. There are better opportunity costs in my opinion, than inflation or unemployment.
Both inflation and unemployment are inevitable and they both have negative impacts in our economy. For instance, inflation destroys the ability of market prices to send signals about the value of resources and opportunities. Thus sellers might produce more when the demand for that certain good or service is actually low, which wastes resources. Sometimes they produce less when the demand is high, and opportunities are missed as a result. On the other hand, unemployment causes productivity to decrease and thus the economy is impacted in a negative way by such issue. Even though unemployment and inflation are bad, if we look at it in a humanistic perspective, unemployment seems like the bigger issue. The reason for this is because unemployment can cause depression, stress and anxiety to those who become unemployed. This might lead those people to commit suicide or to take a less drastic approach towards dealing with the situation that are still harmful to them and to others. An example of this could be committing crimes. People are more likely to steal when they do not have a stable income that can support them and their families. In addition, unemployment makes it harder for unemployed people to obtain a job in the future and thus there is a chance for those people to become discouraged workers. This means that we are not using human labor to our full potential,which also negatively affect the country's GDP. The only positive outcome from unemployment is that a bigger amount of people return to school in order to develop certain skills or obtain a higher education when they are unemployed, which is always a positive effect. However, the bad outcomes that unemployment produces are more harmful than the good outcome that it produces and thus something must be done in order for unemployment to remain moderate.
In my opinion, unemployment is the more pressing concern for the United States. The reason for that is the fact that unemployment has a tremendous impact on the other aspects of our economic health. With unemployment, that means that people will have no income, and will not be able to spend the cash that is essential to the growth and development of our nation economically. Lower amounts of money circulating means lower GDP, which is critical. I also feel that unemployment can have a direct affect on inflation. Some may try and use inflation in order to close the recessionary gap, but that can get out of control and then lead to an even larger downturn in the national economy.
I think that unemployment and inflation are both equally challenging. Just because currently in the United States the more noticeable problem is high unemployment, this does not mean that inflation would not be just as devastating to the economy and the people. In both cases, moderation or reversal of the crisis is difficult for the government, both in terms of determining an appropriate course of action and in terms of predicting the outcome of those chosen actions.
Unemployment is a bigger problem than inflation in the US. Less jobs means the circulation of money has slowed down and people cannot maintain a certain standard of living. Unemployment leads to other social issues such as possible homelessness. The well-being of the people should always come first and combating unemployment is a key step in that direction.
I believe that high unemployment is a bigger issue. I feel like if the unemployment rate went down it would help with inflation cause more people have jobs and would have money to pay for goods rather then having to raise the price for the goods because people would have more money.
As many have mentioned, both have negative effects on the economy, and both have a potential to escalate beyond control. The most "threatening" to the U.S is unemployment. Increasing unemployment in America means more people are lacking in sufficient income to support not only themselves but their families. As a result of this, people become less willing to spend their money and the overall consumption in america declines. With less spending, the economy struggles and we see less growth and lower GDP.
These comments are illustrative of the viewpoints of many economists. At the risk of oversimplifying, Krugman and other New Keynesians hold that unemployment is the greater challenge, while many New Classical economists stress inflation's ills. Great comments...
I believe that high unemployment poses the bigger problem. I think that this is the case because higher amounts of unemployment usually mean that an economy is suffering. Also, high unemployment is also closely related to a low morale for a country. Diminished spirits as a result of high unemployment can cause riots or other uprisings in the country. Also, with high unemployment, less money is being generated, which causes an economy to suffer.
I believe that inflation is a bigger issue. Unemployment is a very serious issue but that is easier to fix than high inflation is. Inflation can quickly dismantle an economy and the side effects are worse and take longer to fix. Unemployment is a key issue though. Both can greatly affect the health and well being of an economy.
I believe that unemployment is a bigger issue than inflation because it doesn't only affect a persons life, it also affects GDP. People without jobs struggle to feed and support their families everyday. Also with their income lower than normal it leads to them spending less money. When people spend less money it lowers the consumption in our nation which is the biggest part of GDP.
I think that unemployment is a bigger issue because especially structural employment has some fundamental problem such as education. Even though people would like to get a job, but their skills are not enough, they cannot be hired. It's a big problem. The government have to help them, but unfortunately they don't have enough money for educating unemployed people. Therefore, Unemployment sometimes has a long-term problem. Indeed, inflation is also big problem, but it also can be said a part of the economic cycle.
High inflation poses a bigger problem. Economies have a tougher time recovering from high inflation. The example given in the book about the Zimbabwe government printing more money leading to hyperinflation is a prime example of this. The economy disintegrated because of this and long term effects were felt. The printing of more money solves the short term problem of paying off the debt, although it leads to many more problems in the future. Jobs can be found and created, money cannot.
I think that unemployment is a bigger challenge than inflation. Inflation can be more of a blessing than a curse, as the average price level is raised, so are wages. Hyperinflation, such as Germany after WWI, is an economic extreme that rarely happens. On the other hand, unemployment rates above the natural rate (4-6%) are evident of recession. Inflation can be easily controlled if caught early enough, and in fact most businesses prepare for some inflation. Unemployment is like a domino effect, it’s much harder to jump start an economy than it is to deflate it.
I believe unemployment is a bigger issue. With unemployment, there is a shortage in jobs. Resulting in less spending, causing people to cut back financially. Its a struggle trying to create jobs, also training and getting new employees that factor out a lot also.
Unemployment is a larger challenge to our country than inflation. In the later, steps can be taken lessen the damage that inflation inflicts upon corporations and also upon individual households. One example is where households can switch their savings into deposit accounts offering a higher nominal rate of interest, protecting the real value of their financial wealth. This strategy applies when there is an expected inflation. If inflation were to happen in our country, I would hope that it is anticipated, is low and stable, and only has lasting impacts for a short period of time. Unemployment can also be combated with governmental programs and/or tax breaks to corporations. These two options create job opportunities in wide varieties. FDR used the first strategy in his New Deal to some success. Obama has tried, mostly failed but small improvements have been seen, in his attempts to utilize both techniques. So I believe that unemployment is a bigger challenge in today's economy because there a small amount of approaches to combat the problem. It is important because we operate in a consumer based economy, so if the consumer is not spending, we will see a drop in output growth.
Both unemployment and inflation can lead to negative outcomes on an economy. However, if one was to determine the more pressing issue, unemployment would have to have priority over inflation. While both issues can be devastating for an economy, high levels of unemployment result in a diminutive economy with stunted potential for growth as long as those people out of work cannot contribute to the efficiency of our economy and its appropriate functions.
Both of these are bad and unavoidable. It is a lose-lose situation. When a country is in a situation where unemployment is high, and there are no other options besides stimulus packages and programs that print more money, then there are going to be long term consequences most likely no matter what. But Unemployment is much worse in my opinion. One thing I have noticed since our recession is the constant struggle for fellow teenagers and friends of mine to get a low paying part time job. Compared to previous generations, there are far less young workers. Thinking about this in the long run, if adolescents don't work, they don't have money to spend at the malls, fast food restaurants, or even pay for college. These areas will lose business and collapse, hurting our economy. Also looking at the idea that "the kids are the future", with kids having little work experience at a younger age, there may be less useful productivity later on in life from these same unemployed people. So although inflation is like a drug that we know will have long term consequences, it is the best to deal with that than long term unemployment.
I believe inflation is worse Paul Kroger chairman of the fed had to make this decision in 1980 and he chose to curtail inflation his decision is attributed to of years of economic growth and success
All economical crises are different. In some cases unemployment might be key problem and in another inflation might be the evil. One example is Germany after WWI when its inflation rate was very high, the unemployment rate was not very high but inflation was. The high inflation rates later collapsed the German economy. In the recent crises the main economical evil that should be cure is unemployment. Inflation is not a issue now, the issue is unemployment. There are thousands of people without a job and new industries are not created. If new innovations and technologies are created in order to create more jobs unemployment is going to decrease therefore economical growth is going to occur. We would not need to worry about inflation since the overall growth of the economy is going to take care of the inflation matter.
I believe that unemployment is a bigger problem. Without jobs people don't consume and our economy stalls. There are no positives about unemployment. While high inflation is a problem there are some short term positives, house prices rise again, debt becomes more manageable, wages increase, consumers spend. Downside is buying power erodes.
I believe high inflation is a bigger problem, but unemployment is almost equally as bad. If the United States gets ra[id inflation then the value of the dollar goes down and some companies will have to let workers go because the company wont be able to pay all of their employees a higher wage to compensate for the high inflation and higher cost of living. In simple words, inflation can lead to unemployment.
I agree with Gustavo. I think I may be a bit biased based on the fact that the recession we are currently facing doesn't have as much to do with Inflation as it does with Unemployment, and for that reason I think the more pressing issue is unemployment. However, I also think it would be different in a different situation. The threat of unemployment slows the flow of money and the threat alone can be very damaging to an economy. When the velocity of money slows down, something needs to change to balance out the Quantity Theory of Money equation. If not, the GDP will decrease as well.
I believe that both are equally as important but it depends on the timing, with which is more the concerning topic. Right now I would say in our recession that we are more trying to deal with unemployment than inflation. Inflation does not really concern us at the moment. Both are very important topics to our economy but at different times depending on how the ecoomy is doing.
I am compelled to argue that inflation poses a greater threat to stability for the majority. Our ability to accurately gauge the appropriate response is highly fallible, and recently in light of economic turmoil bold procedures to regulate the money supply would be unnerving.
If the slowness of bureaucracy, miscalculations of the Fed or unforeseeable factors weigh in to heavily, I'd fear it would create a deeper recession opposed to enduring a period of unemployment.
unemployment, because I feel that it takes a longer time to reverse the effects of unemployment than it does those of inflation. In addition, a high unemployment rate decreases the purchasing power of the population as a whole, which limits people's ability to spend their money and maintain the demand side of things.
i think higher unemployment is the bigger problem because when people are unemployed they have no source of income which means the little money they do have they are going to hold onto which in turn will hurt the economy since people arent spending money and these days finding a job is virtually impossible --oakford gross
I feel that the bigger challenge to deal with between these two problems is inflation. Inflation might help temporarily slighten a recessionary gap, but in the long run does not solve the problem. As we learned in class, when the government prints more money than usual inflation occurs. The question in a time of large unemployment is always "why doesnt the government just print more money?" I feel that the answer to this question is that, although the printing of money might lessen the blow of unemployment, it is a false sense of improvement. The unemployment rate might drop for a small period of time, but eventually the economy is going to need to return to an equilibrium. When this happens those people who benefited and kept their jobs because of inflation will either have to go throught the painful process of losing their jobs again or beg the government to simply print more money which in turn just digs the economy into a deeper hole with even higher inflation. I think that unemployment is not something that needs to be solved with the printing of more money but solved with carful step by step planning as to where the government and what the government is going to be spending it's money on. This includes projects that will better the overall standard of living as well as create jobs for the people.
ReplyDeleteI think that high unemployment is the bigger challenge simply because when individuals are unemployed, they don't have any means of consistently making money. Despite how low costs may be, their buying power stays extremely low. With high inflation, individuals will still be making money and can make choices on what they need most, despite higher costs. This causes each purchase to be more meaningful which can be considered a good thing in our overly-consumer society. Additionally, when unemployment is high, crime rates tend to go up, as individuals resort to breaking the law to get by.
ReplyDeleteI believe that unemployment is a bigger challenge that we face today. When unemployment is high individuals are being laid off which along with the montary affects, decrease the confidence many American citizens. Inflation only causes the purchasing power to decrease and buying goods and services more difficult. Unemployment includes this extra negative effect on the emotions of people within the country which I believe many economists overlook. Unemployment is a bigger challenge facing countires today, even though inflation is not something to be thrown aside.
ReplyDeleteUnemployment is a bigger problem. If there is no tax money then government is not getting money from nation which could cause even more problems. Inflation is good so long as it is controlled. 2 to 3% inflation is good. However, Runaway inflation will kill us. But I also think inflation can cause unemployment,because if wages go up with inflation then certain companies will have to lay people off which will cause unemployment. But unemployment as we have today causes zero inflation and then the economy does not grow. Although both are important I believe that people can and do accept that inflation will always exist and it isn't always a bad thing, however, I do not believe everyone is ok and will be ok with unemployment. We know that unemployment will always be there, but those people that are unemployed will always think that it is bad and no fair.
ReplyDeleteSince inflation can be unpredictable, difficult to interpret, and a cause of unemployment, I think it is a greater challenge than umemployment itself. The Zimbabawe example shows how inflation only leaves a country in worse condition by sending false price signals reulting in less production and output. It also reults in losses for lenders or higher interest rates for borrowers if the inflation is somewhat expected.
ReplyDeleteBoth are equally as threatening because they both become cyclical and spiral out of control. When inflation grows out of hand, it keeps growing faster and faster. When unemployment goes up, less people have jobs, then they don't spend money, which makes more people's jobs disappear because things aren't selling as fast.
ReplyDeleteI think unemployment is a bigger problem, because there is no tax money being circulated, in the government which in the end could present more problems and eventually lead to inflation. However i do agree that inflation is also a problem when it exceeds 2 to 3%.
ReplyDeleteClearly, both inflation and unemployment are intertwined. The short-term Phillips model shows an inverse correlation between inflation and unemployment, when one is high, the other is low. It is hard to say which of the two is a bigger problem, however, between the two, i think that inflation is the bigger problem. Employers want to have the best, and to keep the best they must offer better incentives for an employee to want to work for them rather than a different company. This causes a company to raise the prices of their products or services because they are now spending more money on their employees; raising prices leads to inflation because the government needs to keep up with the rising prices. Therefore, in my opinion, inflation is much easier to come upon rather than unemployment, meaning inflation is the greater challenge because it has to be constantly monitored.
ReplyDeleteI believe that unemployment is a bigger issue because if one does not have a job, they do not have an income, resulting in this person not being able to spend money. With inflation, people are still receiving an income therefore, able to spend money. Although they have to be wise with what theyc choose to spend their money on.
ReplyDeleteIn my opinion, the bigger challenge faced in the united states is the Unemployment. Unemployment occurs when an individual is actively looking for a job within a period of 4 weeks, a period of time in which no income or experience is gained. The lack of income to support ones self or their family has drmatically contributed the Economic decline in recent years. the problem of unemployment has become world wide, and with the pasage of time its gotten worse. If inflation was the only worry right now in the economy, individuals can still recieve an income and consume in the current market. With no job, this becomes harder. An unemployment rate above 8% is just to high for a government to stable out its problems, debt occurs because familes are not provided for, and a lack of will to purchase "special" goods occur. with all these in mind, inflation could occur, causing a high unemployment to be the bigger issue
ReplyDeleteBoth unemployment and inflation present significant problems to the health of the economy. However, it seems that unemployment is a more severe issue because it has the potential to influence so many other economic elements. As the unemployment rises, people become more and more hesitant to spend their money, and the entire economy faces a downturn. As a result, high unemployment is often indicative of a struggling economy. Inflation is also a serious problem, but in moderation it can help reduce the recessionary gap, and can be moderated by effective economic policy. Therefore, high unemployment is more problematic due to it's powerful implications.
ReplyDeleteI believe unemployment is the bigger issue. If the unemployment rate rises that means less and less people are not having any type of income or at least a steady income. Inflation definitely does have an impact on the economy however, people can avoid buying certain items. A perfect example is when gas prices increased and people began to carpool, walk, or bike certain places instead of driving. Inflation can be avoided to some extent, but as soon as a person becomes unemployed it is unavoidable. Unemployment causes spendings to lessen which hurts the economy as a whole.
ReplyDeleteI believe that when looking at these two concepts, unemployment is the bigger problem for the United States. Although inflation affects everyone, unemployment is a more serious problem. As people have stated above, the unemployed have no means of making steady money making it near impossible to live day to day. With inflation, people can still afford to live, although it may be more difficult. Unlike inflation, unemployment can make or break a persons life and not only that their family. People can work around inflation and still find means to live comfortably whereas unemployment can easily ruin someones life and the lives of those they support.
ReplyDeleteI believe unemployment is a bigger challenge then inflation. People who are unemployed struggle everyday to feed, and house themselves and their family. As stated above, unemployment can ruin a person's life.
ReplyDeleteIn my opinion, inflation poses a greater issue. Simply, printing more money when the country is in need is a false sense of security and does absolutely nothing to solve the true problem. Although, it is temporary fix for unemployment by slowly closing the gap this is only temporary, soon unemployment will rise again leaving us with no option but to raise inflation once again. Devaluating the dollar is not the answer to a country’s over-all well-being. Raising inflation for unemployment creates greater opportunity costs than the pros of it. Of course I believe that unemployment is an issue that should not be ignored I know there are other ways of going about fixing the problem rather than temporarily covering it up. Stopping over-sea production, and start support American business rather than relying on imports will open up jobs and in the long run will be more effective in closing the unemployment gap. Alternatively, there other possibly smaller options, which in the long run will have better long term effects and less of a over-all negative slope for our GDP. There are better opportunity costs in my opinion, than inflation or unemployment.
ReplyDeleteBoth inflation and unemployment are inevitable and they both have negative impacts in our economy. For instance, inflation destroys the ability of market prices to send signals about the value of resources and opportunities. Thus sellers might produce more when the demand for that certain good or service is actually low, which wastes resources. Sometimes they produce less when the demand is high, and opportunities are missed as a result. On the other hand, unemployment causes productivity to decrease and thus the economy is impacted in a negative way by such issue. Even though unemployment and inflation are bad, if we look at it in a humanistic perspective, unemployment seems like the bigger issue. The reason for this is because unemployment can cause depression, stress and anxiety to those who become unemployed. This might lead those people to commit suicide or to take a less drastic approach towards dealing with the situation that are still harmful to them and to others. An example of this could be committing crimes. People are more likely to steal when they do not have a stable income that can support them and their families. In addition, unemployment makes it harder for unemployed people to obtain a job in the future and thus there is a chance for those people to become discouraged workers. This means that we are not using human labor to our full potential,which also negatively affect the country's GDP. The only positive outcome from unemployment is that a bigger amount of people return to school in order to develop certain skills or obtain a higher education when they are unemployed, which is always a positive effect. However, the bad outcomes that unemployment produces are more harmful than the good outcome that it produces and thus something must be done in order for unemployment to remain moderate.
ReplyDeleteIn my opinion, unemployment is the more pressing concern for the United States. The reason for that is the fact that unemployment has a tremendous impact on the other aspects of our economic health. With unemployment, that means that people will have no income, and will not be able to spend the cash that is essential to the growth and development of our nation economically. Lower amounts of money circulating means lower GDP, which is critical. I also feel that unemployment can have a direct affect on inflation. Some may try and use inflation in order to close the recessionary gap, but that can get out of control and then lead to an even larger downturn in the national economy.
ReplyDeleteI think that unemployment and inflation are both equally challenging. Just because currently in the United States the more noticeable problem is high unemployment, this does not mean that inflation would not be just as devastating to the economy and the people. In both cases, moderation or reversal of the crisis is difficult for the government, both in terms of determining an appropriate course of action and in terms of predicting the outcome of those chosen actions.
ReplyDeleteUnemployment is a bigger problem than inflation in the US. Less jobs means the circulation of money has slowed down and people cannot maintain a certain standard of living. Unemployment leads to other social issues such as possible homelessness. The well-being of the people should always come first and combating unemployment is a key step in that direction.
ReplyDeleteI believe that high unemployment is a bigger issue. I feel like if the unemployment rate went down it would help with inflation cause more people have jobs and would have money to pay for goods rather then having to raise the price for the goods because people would have more money.
ReplyDeleteAs many have mentioned, both have negative effects on the economy, and both have a potential to escalate beyond control. The most "threatening" to the U.S is unemployment. Increasing unemployment in America means more people are lacking in sufficient income to support not only themselves but their families. As a result of this, people become less willing to spend their money and the overall consumption in america declines. With less spending, the economy struggles and we see less growth and lower GDP.
ReplyDeleteThese comments are illustrative of the viewpoints of many economists. At the risk of oversimplifying, Krugman and other New Keynesians hold that unemployment is the greater challenge, while many New Classical economists stress inflation's ills. Great comments...
ReplyDeleteI believe that high unemployment poses the bigger problem. I think that this is the case because higher amounts of unemployment usually mean that an economy is suffering. Also, high unemployment is also closely related to a low morale for a country. Diminished spirits as a result of high unemployment can cause riots or other uprisings in the country. Also, with high unemployment, less money is being generated, which causes an economy to suffer.
ReplyDeleteI believe that inflation is a bigger issue. Unemployment is a very serious issue but that is easier to fix than high inflation is. Inflation can quickly dismantle an economy and the side effects are worse and take longer to fix. Unemployment is a key issue though. Both can greatly affect the health and well being of an economy.
ReplyDeleteAndrew Reed
I believe that unemployment is a bigger issue than inflation because it doesn't only affect a persons life, it also affects GDP. People without jobs struggle to feed and support their families everyday. Also with their income lower than normal it leads to them spending less money. When people spend less money it lowers the consumption in our nation which is the biggest part of GDP.
ReplyDeleteI think that unemployment is a bigger issue because especially structural employment has some fundamental problem such as education. Even though people would like to get a job, but their skills are not enough, they cannot be hired. It's a big problem. The government have to help them, but unfortunately they don't have enough money for educating unemployed people. Therefore, Unemployment sometimes has a long-term problem. Indeed, inflation is also big problem, but it also can be said a part of the economic cycle.
ReplyDeleteHigh inflation poses a bigger problem. Economies have a tougher time recovering from high inflation. The example given in the book about the Zimbabwe government printing more money leading to hyperinflation is a prime example of this. The economy disintegrated because of this and long term effects were felt. The printing of more money solves the short term problem of paying off the debt, although it leads to many more problems in the future. Jobs can be found and created, money cannot.
ReplyDeleteI think that unemployment is a bigger challenge than inflation. Inflation can be more of a blessing than a curse, as the average price level is raised, so are wages. Hyperinflation, such as Germany after WWI, is an economic extreme that rarely happens. On the other hand, unemployment rates above the natural rate (4-6%) are evident of recession. Inflation can be easily controlled if caught early enough, and in fact most businesses prepare for some inflation. Unemployment is like a domino effect, it’s much harder to jump start an economy than it is to deflate it.
ReplyDeleteI believe unemployment is a bigger issue. With unemployment, there is a shortage in jobs. Resulting in less spending, causing people to cut back financially. Its a struggle trying to create jobs, also training and getting new employees that factor out a lot also.
ReplyDeleteUnemployment is a larger challenge to our country than inflation. In the later, steps can be taken lessen the damage that inflation inflicts upon corporations and also upon individual households. One example is where households can switch their savings into deposit accounts offering a higher nominal rate of interest, protecting the real value of their financial wealth. This strategy applies when there is an expected inflation. If inflation were to happen in our country, I would hope that it is anticipated, is low and stable, and only has lasting impacts for a short period of time. Unemployment can also be combated with governmental programs and/or tax breaks to corporations. These two options create job opportunities in wide varieties. FDR used the first strategy in his New Deal to some success. Obama has tried, mostly failed but small improvements have been seen, in his attempts to utilize both techniques. So I believe that unemployment is a bigger challenge in today's economy because there a small amount of approaches to combat the problem. It is important because we operate in a consumer based economy, so if the consumer is not spending, we will see a drop in output growth.
ReplyDeleteBoth unemployment and inflation can lead to negative outcomes on an economy. However, if one was to determine the more pressing issue, unemployment would have to have priority over inflation. While both issues can be devastating for an economy, high levels of unemployment result in a diminutive economy with stunted potential for growth as long as those people out of work cannot contribute to the efficiency of our economy and its appropriate functions.
ReplyDeleteunemployment is the bigger problem because people will simply spend less. Ultimately, creating less money flow in the economy.
ReplyDeleteBoth of these are bad and unavoidable. It is a lose-lose situation. When a country is in a situation where unemployment is high, and there are no other options besides stimulus packages and programs that print more money, then there are going to be long term consequences most likely no matter what. But Unemployment is much worse in my opinion. One thing I have noticed since our recession is the constant struggle for fellow teenagers and friends of mine to get a low paying part time job. Compared to previous generations, there are far less young workers. Thinking about this in the long run, if adolescents don't work, they don't have money to spend at the malls, fast food restaurants, or even pay for college. These areas will lose business and collapse, hurting our economy. Also looking at the idea that "the kids are the future", with kids having little work experience at a younger age, there may be less useful productivity later on in life from these same unemployed people. So although inflation is like a drug that we know will have long term consequences, it is the best to deal with that than long term unemployment.
ReplyDeleteI believe inflation is worse Paul Kroger chairman of the fed had to make this decision in 1980 and he chose to curtail inflation his decision is attributed to of years of economic growth and success
ReplyDeleteBy: Gustavo Gutierrez
ReplyDeleteAll economical crises are different. In some cases unemployment might be key problem and in another inflation might be the evil. One example is Germany after WWI when its inflation rate was very high, the unemployment rate was not very high but inflation was. The high inflation rates later collapsed the German economy. In the recent crises the main economical evil that should be cure is unemployment. Inflation is not a issue now, the issue is unemployment. There are thousands of people without a job and new industries are not created. If new innovations and technologies are created in order to create more jobs unemployment is going to decrease therefore economical growth is going to occur. We would not need to worry about inflation since the overall growth of the economy is going to take care of the inflation matter.
I believe that unemployment is a bigger problem. Without jobs people don't consume and our economy stalls. There are no positives about unemployment. While high inflation is a problem there are some short term positives, house prices rise again, debt becomes more manageable, wages increase, consumers spend. Downside is buying power erodes.
ReplyDeleteI believe high inflation is a bigger problem, but unemployment is almost equally as bad. If the United States gets ra[id inflation then the value of the dollar goes down and some companies will have to let workers go because the company wont be able to pay all of their employees a higher wage to compensate for the high inflation and higher cost of living. In simple words, inflation can lead to unemployment.
ReplyDeleteJack Laurence
I agree with Gustavo. I think I may be a bit biased based on the fact that the recession we are currently facing doesn't have as much to do with Inflation as it does with Unemployment, and for that reason I think the more pressing issue is unemployment. However, I also think it would be different in a different situation. The threat of unemployment slows the flow of money and the threat alone can be very damaging to an economy.
ReplyDeleteWhen the velocity of money slows down, something needs to change to balance out the
Quantity Theory of Money equation. If not, the GDP will decrease as well.
I believe that both are equally as important but it depends on the timing, with which is more the concerning topic. Right now I would say in our recession that we are more trying to deal with unemployment than inflation. Inflation does not really concern us at the moment. Both are very important topics to our economy but at different times depending on how the ecoomy is doing.
ReplyDeleteI am compelled to argue that inflation poses a greater threat to stability for the majority. Our ability to accurately gauge the appropriate response is highly fallible, and recently in light of economic turmoil bold procedures to regulate the money supply would be unnerving.
ReplyDeleteIf the slowness of bureaucracy, miscalculations of the Fed or unforeseeable factors weigh in to heavily, I'd fear it would create a deeper recession opposed to enduring a period of unemployment.
unemployment, because I feel that it takes a longer time to reverse the effects of unemployment than it does those of inflation. In addition, a high unemployment rate decreases the purchasing power of the population as a whole, which limits people's ability to spend their money and maintain the demand side of things.
ReplyDeletei think higher unemployment is the bigger problem because when people are unemployed they have no source of income which means the little money they do have they are going to hold onto which in turn will hurt the economy since people arent spending money and these days finding a job is virtually impossible --oakford gross
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