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ECON1012 Principles Of Economics I

tag 0 Download 2 Pages / 259 Words tag 21-12-2020

Question:

Discussion and the readings  you have completed, write an extended answer to the following question.

The Asian economies are in a rather curious position given their historical reliance on exports as a driver of economic growth. The Trump tax cuts and a growing economy are expected to increase US consumption, but much of our consumption is of goods made in Asia. Thus, the tax cuts are expected to help the Asian economies grow. At the same time, importing products from Asia increases our trade deficit. President Trump has clearly expressed a desire to shrink the US trade deficit and clearly placed a rather large target on China. China’s importation of inputs and raw materials from its neighbors, however, is a key component of Asian economic growth. Hence, US actions could simultaneous add fuel to Asian economic growth and stifle it.

Having studied a number of economies in the region through their growth story, their experiences during the Asian Financial Crisis, and their post-crisis developments, how do you think the East Asian economies will navigate these contradictory economic influences? Explain.

Does your prognostication for the region change as you move from the short run to the long run? How so? Why? Are there other specific factors to be brought into play? What and why

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