Eric Krell stated “There exist a widening and puzzling gap between the status of indicators used to assess the country’s economic health and the severity of issues that Americans cite when describing the country’s – and their own – prosperity.” (2016). A recent article by Krell, “Goldilocks and the narrative driven economy”, is analyzed for economic principles and macroeconomic indices. The indices mentioned in the article will also be used to explain and define economic calculations. Lastly, conclusions that can be drawn from the article about the future economic changes are also discussed.
There are ten economic principles and of those ten, Krell points out four in this particular article. The first principle…show more content… The Dodd-Frank Act is financial reform that is to be implemented over several years with the intent of decreasing risk in the U.S. financial system (Dodd-Frank Wall Street, 2016). President-elect Trump has stated he would repeal this act but the full implications of this act have yet to be seen since its original intent was to be implanted over a period of time (Dodd-Frank Wall Street, 2016). The repeal could cause more damage to the economy than the actual act itself. Actions in this area should be monitored closely, in addition to other factors, to see the stability and/or instability in the U.S. economy.
The last principle mentioned; society faces a short run tradeoff between inflation and unemployment. As an issue pointed out in the article, household incomes continue to decline and a possible spike in U.S. inflation, in addition to other factors could cause changes to the U.S. economy for the worse (Krell, 2016). The article doesn’t speculate as to whether or not the possible spike in inflation would be a short or long period. If a spike in inflation was short then the tradeoff could be beneficial. If inflation last for an extended period of time, then the unemployment rate will rise since the value of the dollar declines with inflation and causes business spending to be less.
Economic indicators are sections