Question

Keynesian economists focus on the short run business cycle-are we going into another recession or not? If unemploymnet increases then federal unemployment benefits are paid out.

Classical economists focus on what the economic growth rate will be for the next 10 or 20 years. Are there enough incentives built into the economy to promote technological innovation and new business?

Environmentalists worry that the focus on growth-whether short term or long term increases environmental damage and climate change.

Which group would you most identify with and why?

Answer 1

The group that I must identify with is that of environmentalist. While for economic development, it is good to think of growth and how that can affect our macro economy, it is also essential to think of sustainability of growth. Market solutions often tend to ignore the externalities created by development int terms in environmnetal and climatic damage which might lead to growth in that sector for short run but that growth will not sustain in the long run until the social cost of environmental damage is taken into account. Hence, a slow route to growth but a sustainable one is more appropriate than a fast and unsustainable one