Macroeconomics Debate

8/20/2019 Macroeconomics Debate

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MACROECONOMICS DEBATEVishnu Pras(159278100V!!r!ndrana(159278097

Welfare statesDisadvantages for the econom



DE#INITION $ P%RPOSE&Awelfare state is a )n !*" )+ ,)-!rn.!n" in /hi h "h! s"a"! * a s a

! r) ! in "h! *r)"! "i)n and *r).)"i)n )+ "h! ! )n).i and s) ia /! 34!in, )+ i"s i"i !ns6

Purpose:

i E ua i" )+ )**)r"uni"

ii E ui"a4 ! dis"ri4u"i)n )+ /!a "hiii *u4 i r!s*)nsi4i i" +)r "h)s! una4 ! ") a-ai "h!.s! -!s )+ "h!

.ini.a *r)-isi)ns

T6 6 Marsha d!s ri4!d "h! modern welfare s"a"! as a dis"in "i-!

).4ina"i)n )+ democracy, welfare, and capitalism.



PRINCIP:ES BE IND;E:#ARE STATE

The tax-transfer system• Th! 4u )+ *u4 i s! ")r r!-!nu!s is rais!d "hr)u,h dir! " and indir! " "a<!s )n a4)r

in ).!• Th!s! r!-!nu!s s!r-! ") =nan ! *u4 i s!r-i !s and -ari)us "rans+!r *r),ra.s

ai.!d a" r!dis"ri4u"in, in ).! ")/ards )/ a4i i" )r un u indi-idua s• B! aus! "a<!s and "rans+!rs "!nd ") dis )ura,! a4)r su** (.)r! ,!n!ra "h!

r!du ! "a<a4 ! in ).! > "h! r!a"! a "rad!3)? 4!"/!!n ! ui" and !@ i!n

Trade-o !etween e"uity and e#ciency• Trad!3)? has "!nd!d ") /)rs!n in r! !n" !ars as a r!su " )+ , )4a i a"i)n> a,in,> and

"! hn) ),i a han,! 4ias!d a,ains" )/3s i !d /)r !rs6• Th! d na.i /)r d ! )n). )n+r)n"s .an *!)* ! /i"h in r!asin, ! )n).i ris s

$lo!ali%ation• Th! a4i i" )+ "h! /! +ar! s"a"! ") )?!r s! uri" is /!a !n!d•

)4a i a"i)n in r!as!s "h! .)4i i" )+ "a< 4as!s• Th! han,in, na"ur! )+ hu.an3 a*i"a ris s rais!s "h! )s"s )+ insurin, "h!s! ris s



;EA:T REDISTRIB%TION• )-!rn.!n" !<*!ndi"ur!s r! ! "a<> ra"h!r "han r!a"in, a n!" .)-!.!n" )+ "a< d) ars+r). ri h indi-idua s ") *))r indi-idua s

• R!dis"ri4u"i)n is a r)ss ,!n!ra"i)ns ra"h!r "han ") "h! *))r (!ar i!r ,!n!ra"i)ns ,!" a ,))dd!a

• Man )+ "h! ar,!s" and .)s" !<*!nsi-! ,)-!rn.!n" *r),ra.s 4!n!=" "h! rich )r middle class, rather than the poor

&eal value of goods• Th! r!a -a u! )+ *u4 i ,))ds is ,r!a"!r in /!a "h )..uni"i!s> !-!n r! a"i-! ") ) a "a<!<*!ndi"ur!s

• Ta< s s"!. is )n /!a *r),r!ssi-!> a "hin,s )nsid!r!d> and .an inds )+ "a<!s>su h as sa !s "a<!s> ha-! a r!,r!ssi-! i.*a "6

• Risin, /! +ar! !<*!ndi"ur!s ha-! !d ") in r!asin, *)-!r" and /)rs!nin, s) ia )ndi"i)n



TA ES AND E##ECTS

'ndividual Taxes• i,h "a< ra"! .a indu ! indi-idua s ") /)r !ss> ") s!ar h !ss a "i-! +)r /)r• /hi ! un!.* ) !d> ") r!"ir! +r). "h! a4)r .ar !" !ar• %nd!rr!*)r" in ).! ") "h! "a< au"h)ri"i!s•

R! !i-! in ).! in "h! +)r. )+ un"a<!d +rin,! 4!n!="s ra"h!r "han "a<a4 ! /a,!in ).!

(orporate Taxes• In"!rna"i)na ! )n).i in"!,ra"i)n has si,ni= an" in r!as!d "h! .)4i i" )+ "h!

)r*)ra"! in ).! "a< 4as!• Th!r! is a ).*!"i"i)n a.)n, ,)-!rn.!n"s ") a""ra " )r*)ra"! a*i"a and

h!n ! )un"ri!s /i"h hi,h!r "a< 4ra !"s ))s! )u" in ).*!"i"i)n



C%RRENT ECONOM O#;E:#ARE STATES

• Th! ! )n).i!s i ! % and %SA ar! )*"in, )u" )+ "h! ;! +ar!S"a"! s h!.!s• Th! N)rdi s ha-! "h! /)r d s .)s" ,!n!r)us /! +ar!s"a"!s> 4u" a su !ssi)n )+ ris!s *u" an !nd ") "h! r!,i)n s"hin in, a4)u" /! +ar!• D!n.ar /!n" in") +r!!+a in "h! !ar 1980s6 #in andi.* )d!d in "h! !ar 1990s• S/!d!n and N)r/a +a !d s!ri)us =nan ia ris!sa" a4)u" "h! sa.! "i.!(onclusionTh! /! +ar! s"a"! d)!s i"" ! 4!n!=" "h! *))r and "h!disad-an"a,!d /h!n /! )nsid!r "h)s! a"!,)ri!s 4r)ad >") in ud! +u"ur! ,!n!ra"i)ns and +)r!i,n i"i !ns and h!n ! "h! in"!nd!d*ur*)s! )+ /! +ar! s"a"! disa**!ars



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