Economics – Assignment Example
Economics Prof How can one person help or hurt the economy? It is definitely possible for one person to hurt the economy. The truth is that someone such as the President or Federal Reserve Chairman Bernanke have the power to cause serious problems for the American economy. Sometimes it is just a simple statement that will make the market shudder and lose value, sometimes it can be a misplaced policy. The truth is that control over the economy has rarely been as centralized as it today in the United States. A very few people have a significant amount of control over the economy and one word or bad policy by these people can do untold damage to many Americans.
The economy is more fragile than people think. It is the product of a lot of peoples work, but it is also at the mercy of larger forces which dont relate to employment and productivity.
2.Does she have enough information to really make such statements?
There is a reason people call economics the dismal science. This is because it is very hard for economists to truly predict the state of the economy. There are so many inputs and outputs and so much data to parse. Romer may be a good economist, but she cannot tell where the economy will be this time next year or two years from now. Economists can only make predictions and usually these predictions are incorrect. We need economists to provide us with direction, but we should beware of trusting them too much. They never have enough information.