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Effectiveness and Limitations of Economic Policies  Chapter 18 is excellent summary of Topic 3 and Topic 4.

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Presentation on theme: "Effectiveness and Limitations of Economic Policies  Chapter 18 is excellent summary of Topic 3 and Topic 4."— Presentation transcript:

1 Effectiveness and Limitations of Economic Policies  Chapter 18 is excellent summary of Topic 3 and Topic 4

2 Economic growth  Trends – June qtr 2012 = % annual = 3.6%  Policy response Microeconomic – long term Macroeconomic – short term  Effectiveness and Limitations

3 Unemployment  Trends – Aug 2012 = 5.2%  Policy response Labour market reform (microeconomics) Monetary Policy/Fiscal policy  Effectiveness and Limitations Structural problems

4 Inflation  Trends – June qtr = 0.5% annual = 1.2%  Policy response Competition policy Labour market Monetary Policy  Effectiveness and limitations

5 External Stability  Trends- June qtr CAD = -$13($ b) BoGS deficit $247m annual = -$ 40b Net foreign debt = $742b Net Foreign Liabilities = $880b  Policy response Micro reform Fiscal Policy  Effectiveness and Limitations

6 Distribution of Income and Wealth  Trends – increasing gini co-efficient  Policy responses Fiscal Policy Employment  Effectiveness Incentive vs poverty

7 Environment  Trends – Carbon Tax  Policies Regulation vs market based International agreements  Effectiveness ESD

8 Limitations of policies  Time lags Fiscal Policy- short term (months) Monetary Policy- medium term (6-18 months) Microeconomic Reform – Long Term (20 years)

9  Political factors Election economics Pressure from lobby groups Senate obstruction

10  Global factors Globalisation and resulting external stability- exchange rates/CAD/FD External Shocks- oil prices and international business cycle International organisations and trade agreements

11 The Final Summary  Pages 340-355


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