The Political-Economy of the USA

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 4

Year of Publication : 2020

Authors : Shaleen Nath Tripathi, Anubhav Nath Tripathi

10.14445/23939125/IJEMS-V7I4P106

How to Cite?

Shaleen Nath Tripathi, Anubhav Nath Tripathi, "The Political-Economy of the USA," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 4, pp. 28-37, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I4P106

Abstract:

Shaping Expectations, an Awkward Observation...   Shaping expectations is important, though, difficult by way of targeting variables. It is really an irony that if we target a variable and try to carve expectations, it works in the opposite direction. For example, if we target inflation and shape inflation expectations, it takes us in the opposite direction, deflation, because inflation would make things costly, which means less purchasing power and spending. Moreover, it increases savings because of higher future inflationexpectations. People would demand less and save more. Nonetheless, if we could try to target lowerprices or inflation, people would spend more and save less because of lower prices and priceexpectations. They would feel richer, spend more, and increase inflation in the future. For further understanding, we could take the example of targeting higher interestrates and expectations. It would again lead to lower spending and lower interestrate. Moreover, if we try to target a lower exchangerate, lower demand for imports and foreignexchange would make foreign currency cheap and increase imports in the future...

Keywords:

Economy, USA, Political

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