In addition to the use of fiscal and monetary policies to restore the economy to reach its
Question:
In addition to the use of fiscal and monetary policies to restore the economy to reach its existing full productive capacity, your Policy Brief team is also responsible for developing policy recommendations that will expand Australia’s economic productivity capacity further. Informed by your economic studies, you know that innovation policy plays an important role for bolstering the country’s economic prosperity and living standards over the longer-term time horizon.
- Explain what factors can motivate innovation? What can a government do to foster more innovation in the economy? (2-3 sentences)
- All around the world right now, there are many pharmaceutical and biotech companies striving to invent a vaccine for COVID-19. Patents and other intellectual property rights are one possible way to incentivise innovation among private entrepreneurs.
What are the downsides to offering patents and intellectual property rights when we are hoping to find a vaccine for COVID-19? What do these downsides imply about the potential role for government in this innovation process? (2-3 sentences)
- What are some inequality and diversity issues that policymakers need to keep in mind when thinking about the role of innovation in the economy? (2-3 sentences)
- As one recommendation of a type of innovation that would permanently expand the productive capacity of the economy, your Policy Brief team has modelled the effects of investing in scientific research that would develop ways to more effectively use renewable energy sources in production methods. This new innovation could then be widely disseminated for uptake by businesses throughout the economy. This new innovation would bring down the production costs for businesses, and enable the economy to make even more productive use of our existing resources.
Illustrate the predicted effects of renewable energy innovation using an AD-AS diagram. Provide bullet points to explain what is happening in your diagram. As with all of your diagrams, be sure to indicate the original and new equilibrium points, and what happens to output and price level.
Use these bullet points to explain the impacts of this new innovation on the economy, with reference to your AD-AS diagram:
- …
- …
- …
- …
4) International collaboration and globalisation
When forming your policy recommendations, your Policy Brief needs to consider the ways that the Australian economy is part of the Asian-Pacific region and connected to the rest of the world. Your team is analysing the ways that all countries need to interact with each other for the purpose of elevating economic prosperity and overall wellbeing.
- Provide an explanation of what is meant by the term ‘globalisation’ and explain how does globalisation contribute to improving people’s wellbeing? (2-3 sentences)
- As the whole world looks for a road to recovery from the COVID-19 pandemic, give some examples of the ways that international collaboration and co-operation will be important for our recovery? In what ways might this international collaboration be under threat during the pandemic, and what policy arrangements and institutional settings can help to ensure that countries continue to co-operate with each other in the future? (2-3 sentences)
5) Principles of good policy design
- Managing economic challenges and coming up with policy solutions is a tricky task. When striving to optimise overall wellbeing, every policy decision involves some sort of trade-off. An essential element of good policy-making is to consider these trade-offs, by weighing up the costs and benefits, across the short-term and long-term, and identifying the winners and losers of a policy change.
What have you learnt in this course about trade-offs? Referring to any of the topics that we have covered in this course, give an example of a trade-off that policymakers need to consider. In your discussion, you should aim to make reference to the economic concept of ‘opportunity cost’. (2-5 sentences)
- To help inform your thinking about policy recommendations, what have you learnt in this course about the role of confidence in explaining and influencing what happens in the economy? In providing your answer, consider how the Australian Government announced in its Federal Budget that it planned to give income tax cuts to households, as a way to stimulate more spending and boost economic activity. In what way does this tax cut policy depend on people’s overall level of confidence, and what is your own assessment of the likely effectiveness of this policy given the current pandemic environment?
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr