Olivia Barr, Chapter 9, Question 7

After reading this chapter I've learned that accurately calculating national economic progress, and avoiding recessions is much more complex that it might appear to be. It is easy to suggest that raising taxes, adding jobs, or cutting certain government programs are simple answers to fighting economic downturns, but in reality these things can accelerate a recession. Adding jobs is helpful in raising the GDP, but if everyone has work then there is more demand for goods and services which causes prices to go up, which intern acts as a deterrent for people who would otherwise be putting their income back into the economy. Additionally, adding jobs may look good for the GDP, but the fact of the matter is that the GDP can make notable gains, but the economic well being of the country could be no better off. There are many important factors of "economic progress" that are not factored into the GDP that allow for much discrepancy between what the numbers say and what the actual situation is from the top to the bottom categories of working people and families. It is also very difficult to predict when an economic downturn will start, or even what caused it, but one thing that has been identified is that it is within human logic that if we are unsure of something we will be less likely to do it, and this applies to the economy; unfortunately, this can act as a catalyst in the formation of recession during a time of economic instability. In short, combating recessions is much more complex than the general public might want to believe, but from what I have learned from this chapter, we might be able to make large steps in preventing them if we are able to calculate economic progress in a much more holistic manner capable of accounting for nuanced and underlying factors of progress, and fight intrinsic human logic in situations of uncertainty so as to prevent economic stability from being a self-fulfilling prophecy.