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– Nelson Mandela

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Unit 3 DQ2_Macroeocnomics

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Q 1. What are some causes of this Great Moderation (reflect on current economics in the past 10 years)? 2. Do you think this pattern can continue in the future (for the next 10 to 20 years)? (Support your answers with academic articles from the HCCC library website.) 3. Can you think of any potential drawbacks to this development, or alternative changes that will need to be made in the future to continue the stability within the economy? Explain if these issues are even possible or hypothetical within your answer, and why.

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The Great Moderation is considered to be the period of time which have started in the 1980s and is continuing even today. During this period, more or less there occur fluctuations in terms of GDP and also in case of the business cycle which was not viewed to be so smooth like before. On the other hand, when the market was being found to be not performing correctly then also it can be expected that there will be no such depression or recession being faced by the economy ("The Great Moderation", 2019). However this doesn’t indicate that the market is free from faults despite of facing some of the mild form of recessions.