Economic Essay(1800words)

The writing assignment is to write a compact, carefully polished essay on current macroeconomic issues facing the U.S. economy. Note that there are certainly important things to explore that are not listed. The topic and requirements of the essay are listed below

Topic: Fiscal policy

· Define supply-side and demand-side channels for fiscal policy. Link the channels to different macro theories.

· In what ways to the supply-side and demand-side effects reinforce or offset each other?

· What kind of evidence is relevant in assessing which channels are most effective?

· Discuss debates about the how government spending and public deficits can crowd out private economic activity?

· Compare the demand-side effects of fiscal policy to monetary stimulus? When is one or the other the preferred approach to provide macro stimulus?

· What is your assessment of fiscal policy in early 2018? Consider the effectiveness of the Trump / Republican tax cut bill passed in late 2017. Assess the effects of larger government deficits and rising federal debt. What do you think about the macro impact of a large government infrastructure program (a policy that seems to get some support from both sides of the political debate)?

Consider alternative policies to address the challenges of economic dislocation and stagnation that seemed important to the surprising electoral victory of President Trump. Note that for the topic suggested above, you should base your analysis on the theoretical framework. That is, you should explicitly ground your analysis in the classical model, the Keynesian model, or the neoclassical synthesis. It would be useful to justify your choice of model (or possibly a mixture of models) and explain how your choice of theoretical framework could lead to different conclusions compared to alternatives. The target length of essay is 1500-2000 words; use single space, Times New Roman 12-point font, and 1-inch margins.