Tuesday, March 31, 2015

Jacob Besser Chapter 9 Question 6

The part of this chapter that made the greatest impact on how I think about econ was the part about the Japanese economy. As it seemed at first their economy was stable and strong whereas the American economy was unstable and wavering on the brink of collapse. But soon after the US economy grew strongly for the next decade while the Japanese economy stagnated and began to sink. The idea that recession is necessary for increasing growth is whereas the idea that stability will lead to growth seems to be the more logical path. It leads me to ask the question why is an unstable economy better than a stable one? What causes the business cycle to be the way it is and how can recession be beneficial for net growth?

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