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Macroeconomic Issues
Order Instructions:
I want you to write and upload your analysis of what are the key macroeconomic issues for 2018 in the US and in Europe. Discuss the 5 below in a paragraph for each.
Five critical issues for 2018 macroeconomics are said to be:
1. tax reform shake out (Will Federal Reform work, what happens to State taxes?)
2. Can reduction in international imports to the US, raise US Exports and reignite the US GDP (Will bilateral trade agreements work to lower the trade deficit? Should it?);
3. Will Brexit cause or create Europe to grow faster?
4. Will capital formation and growth continue to reduce return to wages and increase inequality? (Will there be an increase in the productivity of labor or will it help increase wages or jobs?)
5. Other- You decide. Explain why you include this. It may be a country, a region or an economic category As the above 4.)
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Macroeconomic Issues Essay
Tax reform shake out
The tax reform shake out refers to the congressional battle to sway votes to either support or reject the proposed reforms. The reforms constitute a number of proposals from a 2016 blueprint report from the US Congress as well as the one page plan revealed by the US President in April 2017. The reforms include a reduction in marginal tax rates, expanding support for childcare, rescinding alternative minimum tax, and eliminating various deductions (O’Brien, 2017; Speaker Paul Ryan, 2016).
The tax reform could work since it is a pertinent bill that affects the lives and incomes of the majority of low to medium income earners in the country. The impacts of the reform on state taxes include a broadening of the downward flow of revenue, expansion of the tax base, and uniformity in the conformity by different states (Griffith, 2017; Kaeding & Pomerleau, 2017).
International imports to the US and bilateral trade agreements
In the attempt to correct the trade deficit, reducing the level of international imports to the US would not be the most effective approach to solving the issue. As a rebate, the trade partners might reduce their purchases from the US and lead to increased deficits. As such, a worthwhile approach would be the use of bilateral trade agreements with important trade allies such as China and Germany.
Such agreements ensure there is continued trade and sets quotas of operation where each country has a given level of exports and imports it has to provide (McTeer, 2013; Baumohl, 2012). Therefore, the bilateral agreements can help to lower the trade deficit….
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