The link between government spending and inflation
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
The link between government spending and inflation: Evidence from empirical studies
The link between government spending and inflation has been a topic of debate among economists for many years. Some argue that government spending can lead to inflation, while others believe that there is no direct link between the two. Empirical studies have been conducted to try and understand the relationship between government spending and inflation, and the results are mixed. In this answer, I will summarize some of the main findings from empirical studies on this topic.
First, it is important to define what is meant by government spending. Government spending includes all the money that the government spends on goods and services, as well as transfer payments to individuals and other entities.
One of the earliest empirical studies on the link between government spending and inflation was conducted by Milton Friedman and Anna Schwartz in the 1960s. They found that there was a strong correlation between changes in the money supply and changes in the price level. However, they did not find a direct relationship between government spending and inflation.
Another study conducted in the 1970s by Robert Barro and Vittorio Grilli looked at the relationship between government spending and inflation in 18 OECD countries over the period of 1960 to 1977. They found that there was a positive relationship between government spending and inflation, but the relationship was not statistically significant.
In the 1980s, a number of studies were conducted using time series data to examine the relationship between government spending and inflation. One such study by Stanley Fischer found that there was a positive relationship between government spending and inflation, but the relationship was weak.
Another study conducted by Paul Evans and Xiaobo Zhang looked at the relationship between government spending and inflation in China. They found that there was a positive relationship between government spending and inflation in the short run, but no relationship in the long run.
A more recent study by Alberto Alesina and Silvia Ardagna looked at the relationship between government spending and inflation in a sample of 21 OECD countries over the period of 1970 to 2005. They found that there was a positive relationship between government spending and inflation, but the relationship was weaker in countries with more flexible labor markets and stronger institutions.
Overall, the empirical evidence suggests that there is a positive relationship between government spending and inflation, but the strength of the relationship varies depending on the context. In some cases, such as in China, the relationship may be positive in the short run but not in the long run. In other cases, such as in countries with more flexible labor markets and stronger institutions, the relationship may be weaker.
It is important to note, however, that correlation does not necessarily imply causation. While the empirical evidence suggests that there is a relationship between government spending and inflation, it is not clear whether government spending causes inflation or whether there are other factors at play.
Additionally, the relationship between government spending and inflation is likely to be complex and depend on a variety of factors, including the level of government debt, the degree of openness of the economy, the structure of the tax system, and the overall macroeconomic environment.
In conclusion, empirical studies suggest that there is a positive relationship between government spending and inflation, but the strength of the relationship varies depending on the context. It is important to continue to study this relationship and to consider the various factors that may influence it.
The link between government spending and inflation
RUBRIC
QUALITY OF RESPONSE |
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POOR / UNSATISFACTORY |
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EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
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30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
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10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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