Fluent Essays

Respond to classmates answer: Make sure to respond to each of them. Try to include any relevant macroeconomic concepts or thinking as derived from your readings. Thank you!#7: How to Fix the Great American Growth Machine.In my opinion, the conditions that are needed for a country in general or the economy of that country to develop exponentially like what the United States has done in the past are not only brilliant ideas, potential entrepreneurs, a good conditions for a new brand to survive but also a little bit of luck. At the time where other countries have already starting to build their own system, America is still a country that has not discovered up all of their territory. That might be the reason why lots of entrepreneurs from other continent immigrant from their home country to the America to find a more free economic system to startup; which generally help the United States to reach its great era. However, Alan Greenspans thesis is pointing out that the Americas economy is slowing down and the reason for that is because of the policies which do not allow new brands and entrepreneurs to startup. On the other hand, the article was from 2018 so maybe it is a little bit outdated. Since President Trump is having lots of policies which encourage brands to drag.#8: Consumption, Debt & Chinese Youth Culture.From my perspective, I agree with the article and the example of Chinese youth culture. When I grow up and have a job, it is very hard for me waking up each day, go to work, come home, sleep and then just repeat that cycle over and over again without any purposes. It would be meaningless if I work but not giving myself rewards at the end of the day. Therefore, we can be full of energy and ready for an effective working day tomorrow. However, it has to be balanced between spending for my hobbies and also savings for the future. In the article, it seems that Chinese youth is loosen themselves too much in spending the money. We have discussed earlier that savings are not good for but not savings at all can also be harmful to the economy as well. Without savings, the fact that we have to deal with living expenses and other problem like health issues or unexpected accidents can make the situations worse real fast. Therefore, it is important to keep ourselves happy by rewarding ourselves but also keep in mind for any unexpected problems.#9: The Chinese State-Driven Growth Model.I do not think that at the rate of growth of ~6\% is a good sign for the economy of China. Since it is the third biggest country in total are and the biggest country in population, I believe that that rate of growth can not fulfill the size of the country. The bigger the country, the more problems that leaders have to deal with. As much as I know, China has been struggling with lots of problem, aside from the reading, which are population booming, serious conditions of environment in big cities. Those problems are already been there for recent years but it does not seems to have any good sign. The article also shows some reasons that might be the cause of the slow rate of growth for China. Insufficient working age, international brands are hurting local brands since they are taking over the market, these problems the obstacles for the Chinese economy to overcome to be able to increase through the point of ~6\%.Read and answer the following: You should respond briefly through a single substantive paragraph to the questions based on the attached article. Thank you!#10: Brazils New Approach to Open the Economy.Do you believe that this tariff - reduction approach will actually stimulate Brazilian exports? (Please read the Brazil Opens Up an Economy... to answer this question.)#11: The Case for A New Gold Standard.How do you react to this new proposal to replace the historic gold argument? (Please read the Forget the Gold Standard and Make the Dollar Stable Again for this question.)#12: Opening the Chinese Economy.What is the primary conclusion that you draw from this article about Chinese ascension into the World Trade Organization? (Please read the attached file When the World Opened the Gates of China;...) proquestdocuments_2020_01_19_2.pdf proquestdocuments_2020_01_19.pdf proquestdocuments_2020_01_19_3.pdf Unformatted Attachment Preview Forget the Gold Standard and Make the Dollar Stable Again Cochrane, John H . Wall Street Journal , Eastern edition; New York, N.Y. [New York, N.Y]18 July 2019: A.15. ProQuest document link FULL TEXT Some of President Trumps potential nominees to the Federal Reserve Board have expressed sympathy for a return to the gold standard. Conventional monetary-policy experts deride the idea -- and not wholly without reason. The gold standard wont work for a 21st-century monetary and financial system. It is possible, however, to emulate its best features without actually restoring the gold standard. The idea behind the gold standard is simple: The government promises that if you bring in, say, $1,000 in cash, you can trade it for one ounce of gold, and vice versa. By pegging the dollar to something of independent value, it promises to solve the problem of inflation or deflation. And we dont need central-bank wizards to run things anymore. Yet the aim of monetary policy isnt to stabilize the dollar price of gold; it is, rather, to stabilize the prices of all goods and services. The price of gold has varied from $1,000 to $1,800 an ounce in the past 10 years. Had the Fed fixed that price, critics say the price of everything else would have had to vary this much. Now, it is likely that if the Fed pegged gold, its price relative to other goods likely wouldnt fluctuate as much. But the problem is real. Under the gold standard, the U.S. experienced much more volatile annual inflation and deflation than it does today. The gold standard didnt prevent deflation in the Great Depression and previous panics, a current central concern. The problem would be worse today. What determines the value of gold relative to all goods and services? In the 19th century, gold coins were used for many transactions. People and businesses had to keep an inventory of gold coins in proportion to their expenditures. If the value of gold rose relative to everything else (deflation), people gained an incentive to spend them, and thereby drive up the prices of everything else. If the value of gold fell (inflation), people needed more of it, so they spent less and drove down other prices. This crucial mechanism linked the price of gold to all other prices. That link is now completely gone. Other than jewelry and some minor industrial uses, there is nothing special about gold, and little linking the price of gold to all other prices. If the Fed pegged the price of gold today, the price of everything else would just wander away. The Fed might just as effectively peg the price of chewing gum. A monetary anchor is a good thing, but the anchor must be tied to the ship. Gold no longer is. Broader commodity standards face the same problem. Traded commodities are such a small part of the economy that the relative price of commodities can swing widely with little effect on inflation. Nor was gold as pure as advertised. Governments didnt back their money and debt fully with gold reserves. So how could they promise always to exchange money for gold? The gold standard was an art, much like fractional reserve banking. Central banks set interest rates as they do today, to manage gold flows. Central bankers pronouncements rattled markets as they do today. There were occasional sovereign crises, featuring runs on governments gold promises. Governments couldnt issue more cash when needed. As a result, there were banking crises and cash was seasonally short around harvest time. In response, the Federal Reserve was founded to furnish an elastic currency, not primarily to set interest rates. PDF GENERATED BY SEARCH.PROQUEST.COM Page 1 of 3 The gold standard was really a fiscal commitment, not a monetary one. If people demanded more gold from the government than it had in reserve, the government had to raise taxes or cut spending to buy more gold. More often, the government would borrow to get gold, but governments must credibly promise to raise taxes or cut spending to borrow. This fiscal commitment ultimately gave money its value, not the sometimes-empty promise to exchange money for gold. Taxes ultimately back all government money. The gold standard made this fiscal commitment visible and testable. With this understanding, the U.S. could enact a policy today that emulates the good features of the gold standard. I call it the CPI standard. First, Congress and the Fed would agree that price stability in the Feds mandate means precisely that, not perpetual 2\% inflation. The Feds mandate would be to keep the consumer-price index (or a suitably improved index) as close as possible to a stated value. Second, the CPI target would bind fiscal policy (Congress and the Treasury) as well as monetary policy (the Fed). Inflation would require automatic fiscal tightening and deflation would trigger loosening, just as a gold-standard government trying to defend its currency must tighten fiscally to raise its gold reserves. Third, the government would emulate the promise to trade gold for notes in modern financial markets. There are many ways to do this, but the simplest is to commit to trade regular debt for inflation-indexed debt at the same price. Under this system, inflation would cost the government money and force a fiscal tightening in the same way gold once did. And vice versa -- the system would forestall deflation as well. Gold-standard advocates offer a cogent critique of current monetary policy, but a return to gold is unfeasible. A stable CPI, immune from both inflation and deflation, backed by the same fiscal commitments that underlay gold, is worth taking seriously. --Mr. Cochrane is a senior fellow at Stanford Universitys Hoover Institution. Credit: By John H. Cochrane DETAILS Subject: Consumer Price Index; Monetary policy; Central banks; Interest rates; American dollar Location: United States--US People: Trump, Donald J Cochrane, John H Company / organization: Name: Stanford University; NAICS: 611310; Name: Hoover Institution on War Revolution &Peace NAICS: 541720; Name: Federal Reserve Board; NAICS: 921130; Name: Congress; NAICS: 921120 Lexile score: 1250 L Publication title: Wall Street Journal, Eastern edition; New York, N.Y. First page: A.15 Publication year: 2019 Publication date: Jul 18, 2019 Publisher: Dow Jones &Company Inc PDF GENERATED BY SEARCH.PROQUEST.COM Page 2 of 3 Place of publication: New York, N.Y. Country of publication: United States, New York, N.Y. Publication subject: Business And Economics--Banking And Finance ISSN: 00999660 Source type: Newspapers Language of publication: English Document type: Opinions, Commentary ProQuest document ID: 2259201703 Document URL: http://edmonds.idm.oclc.org/login?url=https://search.proquest.com/docview/22592 01703?accountid=1626 Copyright: Copyright 2019 Dow Jones &Company, Inc. All Rights Reserved. Last updated: 2019-07-29 Database: eLibrary,US Newsstream Database copyright  2020 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest PDF GENERATED BY SEARCH.PROQUEST.COM Page 3 of 3 Brazil Opens Up an Economy Long Shielded From Competition; Wave of tariff cuts aimed at jump-starting one of the worlds largest closed economies Trevisani, Paulo . Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]23 Sep 2019. ProQuest document link FULL TEXT BRASÍLIA—President Jair Bolsonaros administration is opening up one of the worlds most closed big economies, slashing import tariffs on more than 2,300 products and exposing local industries long accustomed to protectionism to the challenges of free trade. With little fanfare, the conservative government has since taking office in January eased the entry of ultrasonic scalpels, cancer drugs, heavy machinery and more, in some cases with tariffs reduced to zero from as much as 20\%. The tariff cuts affect a relatively small number of imports and apply mostly to items Brazil doesnt make. But they reflect a significant shift in the worlds eighth-largest economy , where duties were twice as high as in Mexico, China and the European Union last year. The new opening is a central feature in Economy Minister Paulo Guedess plans to make the country of 210 million more competitive, part of an effort to rekindle a moribund economy historically shielded from foreign competition and bogged down by bureaucracy. Since 2014, the country has been mired by recession and low growth, with the jobless rate hovering at 12\% or more. Brazils model of protectionism has failed, Deputy Economy Minister for Trade Marcos Troyjo, one of Brazils chief trade negotiators, said in an interview. Its been 40 years without sustainable economic growth. Slashing tariffs is an essential step in the implementation of a trade deal with the EU that was clinched in June after years of negotiations spanning the administration of four of Mr. Bolsonaros predecessors. Although winning approval of the pact faces challenges , analysts who are tracking its implementation say legislators in the 32 countries covered are likely to approve the deal in about two years. It would create a $21 trillion trade bloc of 780 million people, the biggest in the world. But Brazil is also pursuing trade deals with South Korea, Canada, the U.S. and other countries. This administration is pushing for trade openings harder than its predecessors, said Filipe Carvalho, a Washington-based analyst who tracks Brazil for the Eurasia Group, a political-risk consulting firm. An increase in commerce can have a significant impact on the economy and also give Brazil a bigger role in global affairs, both key goals of the administration. Brazil has created a system where tariffs were sky high and the state inserted itself to jump start industries or protect them. Car makers are shielded with 35\% tariffs on imported autos. Deep in the Amazon, hundreds of factories in the Manaus Free Economic Zone enjoy tax cuts—and tariffs leveled on foreign competitors—as they churn out electronics, motorcycles and other products sold to Brazilians at hefty prices. Brazilian importers pay tariffs on everything from drugs to clothing, dairy products and more. The country is among the few in the digital age to charge foreign vessels a lighthouse-maintenance fee, a duty created two centuries ago, even though ships now use global positioning systems to navigate. The duty is set to die under the European agreement. PDF GENERATED BY SEARCH.PROQUEST.COM Page 1 of 3 The problems created by protectionism are evident throughout Brazils economy. When Mauá University outside São Paulo imported American equipment last year that it couldnt find in Brazil to upgrade its physics lab, for example, import tariffs doubled the price tag to $70,000, said Francisco Olivieri, a business professor and head of Mauás technology department. Protectionism hurts businesses that need to import supplies or parts and face high tariffs and bureaucracy to do so, which pushes them away from global supply chains. Red tape related to tariffs at Brazilian ports mean imported supplies can take weeks to reach buyers, causing production delays. Fifty-five percent of foreign products require the importing companies to obtain permits from as many as six different government agencies, according to a recent study by the National Confederation of Industry, or CNI, a trade group that represents Brazilian factories. Importers are subject to steep fines if they fail to request a permit, but it is often difficult to determine from which agencies they must seek approval. So many years of protective policies have made some Brazilian businesses too fragile to compete in a free market, some analysts and executives say. We have always had a protectionist model, said João Ebert, chief operating officer at Xalingo SA, a 600-employee toy maker in Brazils southern tip that would face challenges if Brazil keeps opening up to trade. He said competing with imports would be hard if conditions in Brazil for businesses, from the quality of infrastructure to red tape, dont improve before trade deals open the floodgates for cheaper, and often better, rivals. Make those improvements, Mr. Ebert said, and his companys productivity would increase. We need to be more productive and efficient to deal with the new competition, he said. Its a two-way street. It takes nearly 2,000 hours a year for a typical company to file corporate taxes in Brazil, the World Bank says, more than any of the 190 countries it tracks. In neighboring Argentina, also considered tough on companies, it takes 311.5 hours a year. Worn-out roads and a lack of railways make freight prices in the huge nation twice as expensive as in the U.S., according to Pro-Logistic Movement, a Brazilian farming trade group. Brazilian businesses have long said that a trade opening should come only after bureaucracy and taxes were cut and roads, ports and railways expanded and improved. Carlos Abijaodi, director of industrial development at CNI, the industry confederation, said that businesses now want both trade and reforms to take place at the same time. CNI, which supports trade deals, sees the two changes as central to improving Brazils business climate. Opening the economy brings great responsibilities upon the government, Mr. Abijaodi said. The government will have to remove costs stemming from bureaucracy, from our tax system, our logistics and infrastructure. Write to Paulo Trevisani at paulo.trevisani@wsj.com Credit: By Paulo Trevisani DETAILS Subject: International trade; Bureaucracy; Economic growth; Tariffs; Protectionism; Competition Location: Mexico United States--US Canada China Argentina Brazil Eurasia South Korea People: Bolsonaro, Jair Company / organization: Name: International Bank for Reconstruction &Development--World Bank; NAICS: 928120; Name: Eurasia Group; NAICS: 523930; Name: European Union; NAICS: 926110, 928120 PDF GENERATED BY SEARCH.PROQUEST.COM Page 2 of 3 Lexile score: 1620 L Publication title: Wall Street Journal (Online); New York, N.Y. Publication year: 2019 Publication date: Sep 23, 2019 column: Latin America News Section: World Publisher: Dow Jones &Company Inc Place of publication: New York, N.Y. Country of publication: United States, New York, N.Y. Publication subject: Business And Economics Source type: Newspapers Language of publication: English Document type: News ProQuest document ID: 2295451024 Document URL: http://edmonds.idm.oclc.org/login?url=https://search.proquest.com/docview/22954 51024?accountid=1626 Copyright: Copyright 2019 Dow Jones &Company, Inc. All Rights Reserved. Last updated: 2019-09-24 Database: eLibrary,US Newsstream Database copyright  2020 ProQuest LLC. All rights reserved. Terms and Conditions Contact ProQuest PDF GENERATED BY SEARCH.PROQUEST.COM Page 3 of 3 When the World Opened the Gates of China; Was it a mistake for the U.S. to allow China to join the World Trade Organization? Assessments of the 2001 deal often determine positions in todays bitter trade debate. Davis, Bob . Wall Street Journal (Online) ; New York, N.Y. [New York, N.Y]27 July 2018: n/a. ProQuest document link FULL TEXT With a congressional vote looming in the spring of 2000, President Bill Clinton mustered his best arguments for why lawmakers should approve his proposed deal for China to join the World Trade Organization. Adding China would link Beijing to Western economies and reduce the governments ability to control its vast population, he said in a speech that March at Johns Hopkinss School of Advanced International Studies. By joining the WTO, China is not simply agreeing to import more of our products, it is agreeing to import one of democracys most cherished values, economic freedom, Mr. Clinton said. When individuals have the power not just to dream, but to realize their dreams, they will demand a greater say. Mr. Clintons idealistic rhetoric played well among most of Washingtons elites, but a trade lawyer often dismissed as a protectionist, Robert Lighthizer, was skeptical. As he had warned in a New York Times op-ed a few years earlier, if admitted to the WTO, mercantilist China would become a dominant trading nation. Virtually no manufacturing job in [the U.S.] will be safe, he wrote. Mr. Lighthizer is now the U.S. Trade Representative, President Donald Trumps chief negotiator on global trade. In the administrations view, allowing China to enter the WTO in 2001 was a historic mistake that cost the U.S. millions of jobs and trillions of dollars in accumulated trade deficits. The U.S. is now bypassing WTO rules and threatening Beijing with tariffs on up to $500 billion of imported goods. The moves against China are part of Mr. Trumps wider effort to upend longstanding U.S. policy on trade and also the international institutions and agreements that govern trade. Whether the administrations shift is a muchneeded corrective or a disastrous reversal depends in large part on how one views the original decision to bring China into the international trade regime. Given Chinas enormous presence in the world economy today, its difficult to remember how economically backward the country was in the early 1990s. Inflation hit 24\% in 1994. Nearly 60\% of the population lived on less than $1.90 a day. Bicycles jammed the streets, not cars. Chinese reformers saw their countrys entry into the WTO as a way to modernize. To join, China would have to reduce sky-high trade barriers and allow a greater role for foreign firms. State-owned firms would finally face competition, and private enterprise, they hoped, would soar. WTO membership works like a wrecking ball, smashing whatever is left in the old edifice of the planned economy, said Jin Liqun, Chinas vice minister of finance at the time. The WTO is a membership organization. To get in, China had to cut deals with all the members but most importantly with the U.S., the worlds dominant economy. U.S. officials thought they were driving a hard bargain. The deal forced Beijing to slash tariffs, permit foreign investment in Chinese industries and give foreign banks more freedom to do business. For a dozen years, Beijing also agreed, the U.S. could block Chinese imports that PDF GENERATED BY SEARCH.PROQUEST.COM Page 1 of 5 threatened specific American industries. In exchange for the Chinese concessions, the U.S. just had to surrender its annual rite of deciding whether to grant China most favored nation status as a trading partner, ensuring full access to the American market. Chinas allies in Congress had succeeded each year in getting the measure through anyway, but by allowing China into the WTO, the annual reviews would end. Mr. Clinton also linked Chinas WTO accession to the democratic vision of President Woodrow Wilson, who dreamed, he said, of a world full of free markets, free elections and free peoples working together. The growth of the internet, in particular, would undermine Beijings control and make China more like the U.S., Mr. Clinton argued. (He declined to comment for this article.) Many shared this hopeful view, pointing to the examples of South Korea and Taiwan, which had shaken off dictatorships as they became more prosperous. Henry Rowen, chairman of the Reagan administrations National Intelligence Council, forecast in 1999 that China would join the club of nations well along the road to democracy in 2015, when he expected its per capita GDP to reach $7,000. As it turned out, China hit that mark two years sooner than he had predicted, but even now, it is far from being a democracy. A coalition of labor, environmental and human-rights groups opposed Chinas admission to the WTO. Robert Scott, an economist at the Economic Policy Institute, a labor-backed research group, cranked out alarming numbers. In 2000, he forecast that nearly a million U.S. manufacturing jobs would be ... Purchase answer to see full attachment